The latest round of U.S. tariffs is more than just a policy headline—it’s a new cost reality for restaurants across the country.
For many owners and managers, this adds another layer of pressure to an already strained system. Ingredient prices are rising. Labor remains hard to find. And consumers, rattled by talk of recession and inflation fatigue, are tightening their wallets.
It’s a tough environment—but not an impossible one. As someone who’s worked closely with restaurants on pricing and revenue strategy, I want to share a few thoughts on how operators can adapt, not just react.
1. Understand the Customer Mindset—And Price With Purpose
Yes, prices are already high. Yes, customers are wary. But research shows that diners understand price increases when they’re tied to rising costs—especially those beyond your control, like tariffs.
Still, there’s a limit. Consumers might accept higher prices, but they may respond by ordering less or eating out less often. This makes it critical to balance increases with perceived value.
If you raise prices, be deliberate. Communicate subtly through signage or social media. A brief message like, “We’re doing our best to keep prices fair despite increased costs from tariffs” helps build understanding and goodwill.
2. Use Menu Engineering to Protect Margins—Without Sacrificing Quality
Now is the time to take a hard look at your menu.
- Feature items less affected by tariffs—highlight them through design, placement, and descriptions.
- Use bundling (e.g., “combo” meals) to guide guests toward items with better margins.
- Reformulate recipes only if you can do so without hurting the guest experience. Swapping out one or two imported ingredients for quality domestic alternatives may go unnoticed if the dish still delivers on flavor.
Smart menu design can shift demand without shouting about price.
3. Drive Demand Through Timing, Bundles, and Value-Based Promotions
Use revenue management tactics to build demand during slower periods.
- Offer time-based promotions—like late lunch specials or early dinner bundles.
- Create daypart-specific menus with price points and items tailored to traffic flow and price sensitivity.
- Try “mini-indulgences”—smaller versions of popular items at lower prices—to drive incremental spend without overloading your food costs.
These strategies can nudge guests toward slower times and increase check averages without feeling like deep discounts.
4. Focus on Long-Term Resilience
Short-term pain can lead to long-term improvements—if you’re strategic.
- Re-think sourcing: Local suppliers, flexible vendors, and seasonal menus can help buffer against global price shifts.
- Streamline operations: If labor is tight, simplify prep, rotate staff across roles, or use tech to free up capacity.
- Offer tiered pricing: Small upgrades—add-ons, drinks, premium sides—give customers a choice in how much they spend, while helping you lift margins.
Final Thought: You Have More Control Than You Think
You may not control global tariffs or economic sentiment, but you do control how you adapt.
You control your menu, your messaging, your timing, and your tone. In uncertain times, guests want places they trust—where they feel understood, not upsold.
With thoughtful pricing, smart menu moves, and a steady hand, you can stay resilient—and even thrive—through whatever comes next.
Sherri Kimes is an Emeritus Professor at Hotel School at Cornell and specializes in pricing and revenue management. She has actively involved with teaching, conducting research and consulting in pricing and restaurant revenue management for the past 25 years. She is passionate about helping restaurants increase profitability. She can be reached at [email protected]
