Navneet Kalra discusses the importance of the right pricing for a restaurant business
As simple as it might sound, running a restaurant business is no child’s play. The recent crisis that emerged with the outbreak of the pandemic has only added to the difficulties that the hospitality sector faces at large. At a time when several businesses are struggling to stay afloat, some have come up with increasing menu prices as a way to cope up with the losses.
However, prominent restauranteur Navneet Kalra begs to differ. According to him, the right pricing is a very important aspect of running a restaurant business, and should not be meddled with until absolutely necessary. In his opinion, the prices must be adjusted keeping the customer expectations in mind, not just as a quick fix to cover the losses.
Navneet Kalra has been running several restaurants at prime locations across Delhi NCR for decades, the most prominent ones being Khan Chacha, Townhall, Public Affair and Mr Choy in Khan Market. In his experience, menu pricing is an extremely delicate process since it needs to take into account the location, food cost and target audience.
“Understanding your customers is of utmost importance if you are running a restaurant. You can’t appeal to college students with the prices that resemble to those of a premium fine dining restaurant. Similarly, if you are running a fine diner, you need to offer your customers an experience that oozes with finesse,” says Navneet Kalra.
The Khan Chacha owner adds, “Desperate times need not call for desperate measures. Before adjusting menu prices, restaurant owners must research their surroundings. Yes, increased prices can lead to increased net sales, but if your competitors are selling similar items at lower prices, your sales are bound to take a blow.”
However, if you must hike the prices in order to meet the operational costs of the restaurant, Navneet Kalra suggests doing so in a phased manner. “No one likes to see a sudden, considerable hike. However, increasing the prices in a phased manner can help mitigate the sudden shock the diners might experience, thus retaining your customer base,” he says.