Rising Prices
With rising prices, and talk of the “credit cruch” wherever you
go, what advice can I give you with regard to maintaining your
profit margins without losing customers?
First, it is essential that you pass on the price rises to your
customers. Your suppliers are passing on their higher costs to
you; if they tried to absorb the increases and keep their
prices to you stable, they would go bankrupt. So, you have no
alternative but to pass on the increased costs to your
customers. You must not forget that your customers are already
aware of the rising cost of food, and any increases you make to
your beverages or snacks will come as no surprise to them.
Remember, also, that whilst restaurants may suffer as customers
give nights out a miss, a quick visit to the local coffee shop
will not seem so expensive in comparison.
Treat the current economic environment as a challenge, a chance
to beat your competition by focussing on great customer service
and introducing promotions, such as one coffee for the price of
two for a limited time, or by introducing new items.
Try and reduce wastage. This could simply be by reducing
electricity bills
staff areas when rooms are not in use, such as stock rooms.
Review settings for your air conditioning. See if you can
reduce the hours worked by your staff – there may be certain
times of the day or week when you do not need so many employees
on the shop floor.
Looking at your suppliers, you may need to bargain a little
more, and perhaps pay earlier in order to achieve further
discounts. Perhaps switch your orders to lower priced goods
with good margins.
You could also bring in a few cheaper lines that can be picked
up at the till. For any unhappy customers, offer a 10% discount
voucher to be used on their next visit. Offer discount vouchers
for purchases over a certain level, say £15. You might also
consider reducing slightly your top selling items in order to
increase volume of sales.
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