Every owner hears this eventually: “Prices are too high now.” The hard part is deciding what to do next without destroying margin.
Quick Summary
- In the January 2026 CPI release, U.S. food-away-from-home inflation stayed elevated.
- Full-service and limited-service categories are not moving at the same speed.
- Small-business owners report both cost pressure and weak sales in the same quarter.
- The fix is a 3-bucket menu strategy: protect traffic, recover margin, and simplify value communication.
What Changed in 2026
From BLS January 2026 data (released February 13, 2026):
- Food away from home: +4.0% YoY
- Full-service meals: +4.7% YoY
- Limited-service meals: +3.2% YoY
At the same time, the Fed Small Business Credit Survey reported:
- 56% of employer firms cited rising goods/services costs as a challenge
- 34% cited weaker sales
This is the squeeze: costs are up, but demand is price-sensitive.
What Owners Are Saying in the Field
Community threads from U.S. owners describe the same pattern:
- “After raising prices, regular traffic fell.”
- “Neighborhood customers are trading down, not necessarily disappearing.”
- “Costs forced price changes, but the check-average gain did not fully offset volume loss.”
Treat this as a pricing-structure problem, not only a marketing problem.
Use a 3-Bucket Menu Strategy (Not a Blanket % Increase)
Bucket 1: Traffic Anchors
Keep 1-2 visible entry items stable or near-stable. These protect price perception and foot traffic.
Bucket 2: Margin Drivers
Raise items with stronger willingness to pay or low direct comparability. Recover dollars here.
Bucket 3: Premium Add-Ons
Move high-optionality add-ons first (extra protein, premium sides, specialty drinks). This often recovers margin with lower pushback.
The One Formula to Watch
contributionPerItem = menuPrice - (food + labor + packaging + channel fees)If contribution is weak, volume can increase and you still lose cash.
Example: Selective Repricing vs Blanket Repricing
| Item | Old price | New price | Unit cost stack | Contribution before | Contribution after |
|---|---|---|---|---|---|
| Value burger (traffic anchor) | $8.99 | $9.19 | $4.05 | $4.94 | $5.14 |
| Chicken wrap (margin driver) | $11.49 | $12.19 | $4.78 | $6.71 | $7.41 |
| Signature bowl (premium) | $13.99 | $14.99 | $5.42 | $8.57 | $9.57 |
If weekly unit sales are 220 / 180 / 130 respectively:
- Added weekly contribution from this mix = $334
- Customer-facing entry point still starts near prior level
That is usually safer than a flat +8% on every item.
72-Hour Recovery Test After Repricing
- Track daily traffic, average check, and top-10 item mix.
- Compare lunch and dinner separately.
- Check attach rate on add-ons and combos.
- If traffic drops but mix improves, wait one full week before reversing.
- If both traffic and contribution drop, adjust Bucket 1 first.
Fast, small corrections beat one big rollback.
Customer Messaging That Works Better
Use short, concrete language:
We made small updates on selected items to keep quality and portions consistent.
We still have value combos if you'd like a lower total.This keeps trust without overexplaining.
Related Guides
- US Value Menu Pricing Guide
- US Menu Pricing Calculator
- US Menu Price Increase Notice Template (2026)
- US Restaurant Prime Cost Calculator
Sources (checked on 2026-02-14)
- BLS CPI News Release (January 2026)
- BLS CPI category chart (food away from home, full service, limited service)
- Federal Reserve: 2025 Report on Employer Firms
- Reddit - r/restaurateur: “Menu prices too high. Sales way down”
- Reddit - r/restaurantowners: “How do you handle raising menu prices in working class neighborhoods?”
KitchenCost helps you model selective repricing by item and channel so you can protect traffic and still recover margin.