Blame it on shrinkflation: hospitality operators shrink menus and portions

by | Jan 9, 2023

If you’ve dined out recently, you may have noticed a recent trend – reduced menu items and/or smaller portion sizes. As businesses battle inflation, increased food costs, staffing shortages and soaring energy prices, operators are looking for ways to satisfy customers and remain profitable.

Raising prices may be necessary to keep up with inflation, however, this practice alone may be detrimental as consumers are forced to cut back on non-essential spending that includes dining out at restaurants. To keep prices from breaking the bank, operators are combating higher prices by simplifying menus and offering smaller portion sizes. Thus, the term ‘shrinkflaton’ – the process of reducing the size or quantity of product while the price of product remains the same or increases slightly.

Streamline menus

More than one third of hospitality operators plan to tighten up their menus with fewer dishes and less complex options. A leaner menu helps stock control and supply issues with certain products.  It will also reduce stress for kitchen teams who are already struggling to keep up due to labour shortages.

Consumers don’t seem to mind this trend. Research shows that 77% of consumers are happy to visit a restaurant offering a limited menu. The size of a menu isn’t as important as the quality of food you serve. In fact, condensing your menu with easy to execute items allows you to focus on quality and presentation of dishes that deliver memorable experiences and drive repeat business.

Serve smaller portions

Along with simpler menus, cutting back on portion sizes is low-hanging fruit for addressing increasing food costs. Shrinking portions can be a good strategy because it enables restaurants to keep pricing the same or slightly higher. This is important since consumers don’t seem to notice portion sizes as much as they do price increases. Research has shown that consumers typically won’t mind a few less fries, or not as much filling in their sandwiches, as much as they would complain about paying more.

Offering smaller portions is also a way to give your customers more choice and personalisation. Case in point – Wetherspoon’s new burger options. Previously, Wetherspoon served one 6oz beef patty. Their new menu gives the customer the choice of a ‘lighter’ 3oz beef burger, the usual 6oz burger (two 3oz patties) and a large 9oz portion (three 3oz patties) for an extra charge. Customers can now choose the size of burger based on their hunger whilst their perception of price will likely be unchanged.

Are you ready for shrinkflation?

Hospitality operators need to find creative ways to cut expenses and improve their bottom line. Raising prices will be necessary for some products, but consumers are tightening the purse strings as inflation impacts everyday life. Quality and value will both play a crucial role in attracting customers throughout 2023. Streamlining menus with simple, cost-effective items and serving smaller portions will help your cost-cutting measures in the months ahead.

The Enhance team can help you with both! schedule a free, no obligation meeting.