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Battling rising costs: advice for small restaurant owners in 2022

Since the wake of the Covid19 pandemic, inflation has battered restaurants through and through.

While the entire hospitality industry is struggling to recover from the mess triggered by the pandemic, the hospitality segment has probably suffered the worst hit. The average price of meat and oils continues to skyrocket, and business isn’t getting any better.

And that’s not just it! The cost of items like heaters, burners, and large containers has witnessed an equally sharp jump, and smaller restaurant businesses continue to struggle amid the mess.

To add to the high inflation, there’s a constant issue with the workforce shortage. The dining-in scene isn’t any better either. With the high fluctuation of lockdowns and the holiday season coming to a close, the need for in-dining hasn’t been at its highest.

According to multiple restaurant owners, the price of wholesale items has been significantly high over the last couple of months. Because of this, customers too faced some brunt because the cost of almost all medium to fine-dining restaurants has risen.

Unfortunately, such can’t be said for small businesses. With prices of some products increasing by 50% than usual, they are grappling to deal with the mess and generate revenue in the ongoing situation. Things are worse for niche restaurants that now need to deal with the additional barrage of short supplies.

For instance, UK vegan restaurants are struggling with the impact of the pandemic and the prices they are paying for their produce. Research has discovered that vegan products cost nearly twice as much as regular meat-based products due to supply and demand. Prices aren’t coming down any time soon. Therefore, restaurants are forced to find a new way to reduce the budget and increase revenue. Libeo – the invoice management software for restaurant owners, has found that many UK restaurant owners are now seeking new ways to save costs and time because of continued rising prices.

While there isn’t any bonafide blueprint for running a successful eatery amid recent times, here’s some advice small business owners could use while trying to battle the high costs of maintaining a restaurant.


Recently, the UK government announced a £683m scheme to give grants to struggling businesses, including restaurants. Small businesses can leverage such grants to invest in future-proofing technologies that will minimise their labour costs in the long run.

Labour-saving technologies

Many small businesses are currently grappling with labour crunches and massive staff shortages. Tech firms have already taken into the task of creating automated tools and software that will simplify your restaurant operations for the best.

Tools like invoice management software may not be the first thing on your mind, but in the wake of the constant labour shortage and rate fluctuation, this might be a feasible solution. It would become an essential, long-term investment where the returns will be higher, and all of your recurring monthly costs can be managed efficiently.

Introducing this to your restaurant’s management strategy can help relieve the stress of short staff and pressure by reducing manual processes and delivering payments on time. Libeo helps restaurants improve relationships with suppliers, increase productivity, and free up time for restaurant owners to focus on maintaining their business and staff effectively.

Simplified menu

While nothing looks better than a grand menu, things are quite complicated amid the rising produce price. According to a worldwide survey, by the third quarter of last year, a significant majority of small businesses had reduced 10% of their usual menu. And this seems to be the way forward at the current time.

If you have an extensive menu that involves exotic and inaccessible items, try to trim them out or create a certain workaround so that you don’t need to overspend on produce. With a smaller menu, small businesses can easily handle off-premises requests. Additionally, it will also help them manage the kitchen better and more efficiently.

Going by the trends, the simple menus will continue to rule for a while. The same has been asserted by Rick Camack, who currently serves as a Dean of a leading global Culinary institute. He further added that some restaurants could not recreate their old menus because of the constant labour issues, so this would be their eventual fate.

However, this is equally beneficial for smaller businesses because you get to make the most of your products and handle your kitchen more efficiently. If you run a cloud kitchen, even better, because you can come up with new and simple menus every day or every week.

Food halls are the future

Food halls were one of the biggest and most popular collaboration spots for the younger masses until the pandemic hit us. Multiple designers collaborated in these halls and came up with greater concepts to create a massive family of food projects. The majority of the food halls are popular for their food quality at the easy price level. What’s more, because other people are eating around, it offers a social experience to the diners.

So, if you have a small restaurant that you are struggling to pay the rent for, you might want to move into the Food hall. Even though Food halls haven’t been fully functional over the last two years, they are steadily growing and will likely last in the long run. The biggest highlight of these halls is that they can cater to any type of guest with any type of cuisine.

The real estate rates are going steady for food halls, and you will find large commercial spaces sold at the cheapest rates. These can be easily transformed into food halls, and in the coming years, their popularity will only skyrocket.

It is important to note that prior to the Covid19 pandemic, many real estate professionals were already working on projects that are currently unfinished. Some of those projects are going at an excellent rate, and with a little fixture, you can set it up as an extensive Food Hall. Moreover, because Food Hall also comes with the scope of renting, you can also rent the hall to other stall owners and collaborate in a social environment for foodies.

Food halls have also fared well during the pandemic, despite the otherwise dismal situation in the pandemic. According to the researchers of Cushman and Wakefield, more than 75% of these halls were operating during the pandemic after they adopted the cloud kitchen model.

Bottom line

While the small businesses in the hospitality segment are still grappling with the loss provoked by Covid19, all is not lost. With new technologies and smart methods of handling produce, there’s certainly a silver lining. Throughout this article, we covered some of the main pain points that small business owners can consider to develop a more well-planned solution. Given the current mess, we will probably never return to the Pre-Covid era. That is especially why you need to think smarter and invest in technologies and tools built for the future.