Soaring costs and endlessly grim challenges posed by the cost of living crisis have left operators in a critical position. Pubs, restaurants and cafés have needed to balance increasing menu prices with not wanting to alienate already financially stretched customers.

In these challenging times, operators have been taking action and making clever changes on their menus, all of which are being noticed by Lumina Intelligence. Lumina uses its Menu Tracker tool to monitor menu items and pricing across 80 different operators in four key channels. Using this key source of insight, we have identified three key ways operators are adapting their menus.

1. Operators streamlined menus in Covid, but dishes are creeping up again

Last year, and during 2020, menu sizes were reduced as a result of covid restrictions and issues with product availability. Now, comparing summer menus in June to spring menus in March, we can see the average number of items on menus including food and drink is up +3.3%.

Restaurants have been leading the way, up +5.1% over the last quarter, followed by pubs and bars who have the largest number of items on menus. This now means that dish counts in restaurants have risen to just -12% smaller than pre-pandemic.

Average dish count now stands at 72, as operators have expanded menus considerably as restrictions have been lifted and outlets are able to operate at full capacity again. It’s great to see this return to normality but its unlikely dish counts will continue to rise. The advantages of shorter menus include less staff training, more consistency and higher quality.

2. Price increases are minimal (for now), largely due to menu restructures

The second change is that – despite high levels of inflation – average price increases on menus are minimal, due to some clever re-structuring on menus to mask the price rises. Operators across the market are minimising the impacts of inflation across menus through introducing cost friendly items to menus and therefore bringing down the average price.

QSR has seen the largest increase recently, driven by the addition of more premium sides and mains, as well as inflation around chicken dishes following price surges. Restaurants and pubs have seen total average prices on menus change by just -1.0% and +1.5%, respectively, from March to June 2022.

Additionally, we have seen some cheaper items removed and the introduction of slightly more expensive items. However, these new items tend to have a lower production cost per dish. We are seeing a lot of chicken breast swapped for thigh, and sirloin swapped for rump steak and we are expecting more kitchens to be turning to frozen solutions.

3. Customisation used as an effective tool to mask price increases and increase customer satisfaction

Large proportions dishes on menus are now customisable, with customisation being possible for 29% of total dishes and 39% of mains on restaurant food items. By enabling add-ons or swaps, dishes appear cheaper due to a lower base price, yet also offer a trade up or premiumisation opportunity which generates higher spend for the operator. Consequently, additional upsell is the most popular choice for restaurants on menus.

The Brewers Fayre menu features a number of dishes designed to be cost effective, reduce labour and give consumers that flexibility to customise and trade up. Customisable items including build your own burgers and DIY cobb salads are great examples of allowing for this personalisation, with additional ‘upgrade’ options to boost spend.

As days are getting shorter, operators have already started to introduce autumn and winter menus. Battling the cost of living crisis will be front of mind for pubs and restaurants in particular as January looms. Savvy operators will be taking action on their menus and keeping dish counts low, cost-per-dish minimal and masking price increases through customisations that allow for better quality and more trade up opportunity.