The Subtle Art of Shrinkflation
One of the most common but least noticeable tactics is 'shrinkflation'—reducing the portion size while keeping the price the same. That biryani might have a little less chicken, or the serving of dal could be slightly smaller. Restaurants do this in clever
ways, like using narrower bowls or fluffier rice to give the illusion of abundance. Trimming a small amount of a key ingredient, like paneer or chicken, across hundreds of orders can significantly protect a restaurant's profit margin when ingredient prices for items like cooking oil, dairy, and meat are volatile. This practice has become widespread, from local street food vendors to established chains, as a first line of defence against rising costs.
Smarter Menus Through Engineering
Behind the scenes, many restaurants are re-evaluating their entire menu using a data-driven strategy called 'menu engineering'. This involves analysing the popularity and profitability of every single dish. Items are categorised into four types: Stars (high profit, high popularity), Plough Horses (low profit, high popularity), Puzzles (high profit, low popularity), and Dogs (low profit, low popularity). The goal is to highlight the 'Stars' and find ways to make 'Plough Horses' more profitable, perhaps by tweaking an ingredient or adjusting the portion size slightly. Dishes that are neither popular nor profitable—the 'Dogs'—are often removed from the menu entirely. This streamlines kitchen operations and cuts down on inventory waste for ingredients that aren't selling.
Getting Creative with Ingredients
To combat the rising prices of specific ingredients, chefs are becoming more innovative. This includes finding ways to use every part of a vegetable or animal, often called root-to-leaf or nose-to-tail cooking, which drastically reduces waste. Some restaurants are also reformulating recipes by substituting expensive ingredients with more affordable alternatives that don't compromise the dish's overall quality. This could mean using a different blend of spices or finding a local supplier for seasonal produce, which is often cheaper and fresher. By optimising their inventory and using the same ingredients across multiple menu items, restaurants can buy in larger quantities, negotiate better prices, and minimise spoilage.
Streamlining Operations and Reducing Waste
Beyond the food itself, restaurants are looking at every aspect of their operations to find savings. This includes investing in energy-efficient appliances, training staff to be more mindful of utility usage, and running dishwashers only when they are full. Reducing food waste is a major priority, as it can account for a significant portion of a restaurant's expenses. By accurately tracking what gets thrown away, managers can adjust their purchasing and prep levels to match actual demand, saving thousands of rupees each month. Some establishments are also simplifying their delivery menus, focusing on a smaller selection of high-profit, easy-to-prepare items to improve efficiency during peak hours.
Technology and the Unavoidable Price Hike
Technology is playing a larger role in cost management. Modern Point of Sale (POS) systems can track sales data in real-time, helping owners identify which menu items are most profitable and manage inventory more effectively. QR code menus reduce printing costs and can even increase the average order value by making it easier to feature high-margin items. However, despite all these measures, sometimes a price increase is unavoidable. Many restaurateurs absorb initial cost pressures to maintain customer flow, especially during busy seasons. But with sustained inflation across food, fuel, and labour, some of the burden eventually has to be passed on to the consumer to ensure the business remains viable.
