Mitigating the Effects of Rising Beef Prices
According to an article recently published by the LA Times, Beef prices have reached an all-time high in the US and are not expected to come down soon. The rise in prices can be attributed to the extreme weather, which has impacted the nation’s beef cattle herds to fall to 87.7 million, the lowest since 1951 when there were 82.1 million according to the USDA, and when the population was about half of the current population. The article mentions how the retail value of “all-fresh” USDA choice-grade beef jumped to a record $5.28 per pound in February, up from $4.91 per pound at the same time last year.
To mitigate the effects of the rising beef prices, we recommend to consider selling cheaper beef cuts to your customers. Some of these cuts are: ground beef, flank steak and brisket. You should avoid at all cost a price increase on your Beef dishes. This might work initially to lessen the impacts of high beef prices, but eventually your customers might decide to leave if they see prices increasing continually.
Some restaurant owners might think that pushing customers into buying Chicken or Pork dishes would be the best strategy, however usually when a customer is set on having a Beef dish it is hard to push them into such a different direction. Promoting cheaper beef cuts could be much more effective and could provide a higher profit margin to compensate the low profit margin from higher priced beef cuts.
Marketingvitals.com offers a feature called MenuVitals that allows you to clearly see the impacts of your beef promotions. Using simple charts and graphs we can show you if your higher priced beef dishes were actually cannibalized by the lower priced beef items, or if they were cannibalized by the wrong menu items. To learn more about MenuVitals or schedule a demo, send us an email or contact us via Facebook or Twitter.
What is your restaurant doing to mitigate the effects of rising beef prices? Leave a comment and let us know.