Recession Proof Your Restaurant

Jan 19, 2023

As talk of a looming recession continues to dominate the daily headlines, restaurant owners should strongly consider the consequences of such an event and take a proactive approach to ensuring they are prepared to navigate through another challenge facing the industry. The good news is that there are some great strategies that can be employed to assist with mitigating the negative impact that a recession can bring to the restaurant industry and thus, the DHW Retail and Restaurant Team offers the following tips for owners to consider.

Don’t Compromise On Quality – Watch your quality no matter the cost. As if lower sales due to a recession is not enough, a lower quality product will also result in lower sales as well as dissatisfied customers which may magnify the impact. Owners should understand that customers in a recessionary environment are cost-conscious and expect value for their dollar.  As such, look at cutting costs in other areas such as packaging, supplies, and other non-food areas within the business.

Technology – Most operators would agree that online ordering is growing and is here to stay. Online ordering has many advantages, one of the biggest being that it uses less staff, which reduces labor costs.  Not only does it assist with reducing costs, but it can also be used as a tool to generate revenue as it allows for better opportunities to upsell and cross-promote menu items as opposed to staff who may be less inclined to promote or understand the impact these concepts can have on revenues. To promote and entice your customers to use technology, consider only offering certain deals if customers order online.

Prepare to Pivot – The pandemic required entities to pivot and think differently. When in-door dining got shut down, the best restaurants immediately built curbside pickup stations, expanded takeout options, and implemented contact-less procedures within their stores. The question that operators should continuously ask is “what is the next challenge that we’ll need to navigate through?” As such, consider conducting table-top exercises to run through various scenarios that could present challenges to operations and make a plan to address what would change, what would stay the same, and what would have to be performed differently. In addition, it is critical to save every dollar you can so when you need to pivot, you’ll have the resources to invest.

Staff Training – Even in non-recessionary times, staff training is a common denominator in determining the overall success of a restaurant. You “win with people” and how well your staff is trained will show in every aspect of the business. As such, develop a strong system for training and onboarding new staff.  Reinforce and monitor training every chance you get. Train staff to bring an “experience”, upsell, cross-sell, and make sure they are promoting your most profitable items are (not the most popular as this could have a material impact on your profitability).

Opportunity Timing – We generally find that opportunities come toward the end of a recession. As such, be on the lookout for opportunities to identify a better location or a lower rent. In addition, make a concerted effort to save dollars so you’re able to capitalize on these opportunities while other operators shut down or go out of business.

Differentiated Experiences and Signature Products – If your restaurant offers a signature dish or product, or provides a unique experience, it is critical that you make every effort to promote, advertise, and market this to the public. Possessing a differentiating factor will go a long way in making your entity the “restaurant of choice” that will keep customers coming back, recession or not.

Keep an Eye on Financials – Reviewing and understanding how every line item on your monthly profit and loss statement impacts the overall profitability of your restaurant is critical to success. Take the requisite time to review and scrutinize every item and consider implementing Key Performance Indicators (KPIs) that will help you identify positive and negative trends within your organization and allow you to take a proactive approach to address any unfavorable metrics.

Cut Costs and Increase Efficiency – When a predicted recession is on the horizon, it’s essential for operators to scrutinize costs and increase efficiency. Review purchasing practices and continuously seek discounts on food and supplies where possible. Closely monitor labor needs, by shift, and invest the requisite time in scheduling. Revisit your preparation processes to ensure staff are following the most efficient methods of preparation, such as portion control and inventory management practices, and continuously seek feedback on how to further streamline the process.

Review Your Menu and Pricing – The popularity and profitability of menu items are two key concepts that every restaurant operator should fully understand. In other words, your menu mix will drive your profitability, and understanding how each item contributes to profit and how you can impact it will truly dictate your success. For a deeper discussion on Menu Mix, click here. Share this information with your staff so they know how to cross-promote and upsell when interacting with customers. Also, continuously monitor your menu mix and be prepared to implement strategies in connection with pricing and offerings as examples.

Focus on Marketing and Promotions – Find creative ways to draw in customers such as offering discounts, hosting events, and using social media to get them interested in your food and the great experience you deliver. Consider reward and loyalty programs that incentivize repeat purchases and reward customers with private or exclusive events. If you have multiple locations, make sure these programs and branding are consistent with conveying the same messaging and offering the same benefits across all locations.


Time will only tell whether we enter into a recession or not, and the severity of it. While many of the aforementioned tips can be applied in non-recessionary times, a recession only magnifies their importance. As such, take the necessary steps and requisite time to consider how each can impact your restaurant organization. Whether it be preparing financial statements, developing KPIs, or reviewing your Menu Mix, our DHW Retail and Restaurant team is here to help! For more information or to schedule a consultation, please contact Tim Reynolds at or 828.322.2070.