Restaurant entrepreneur leaders disclose their most effective strategies to restaurant owners amid cost increases, evolving customer behavior, and pandemic aftermath, also unveiling the optimal price hike level to prevent customer loss.
In the heart of Chicago, Soul & Smoke, a family-owned and operated restaurant, stands as a beacon of resilience in the face of inflation and rising costs. This establishment, with three brick-and-mortar locations and two food trucks, has built a strong connection with its community, a key factor in its survival.
D'Andre Carter, the owner of Soul & Smoke, emphasizes the importance of being 100% connected to customers and the local community. This connection is at the core of their mission, with the restaurant sourcing locally and reinvesting revenue back into the community to build sustained loyalty.
The resilience of independent restaurants like Soul & Smoke can be attributed to several strategic priorities:
Customer Connection and Transparency
Clear communication about pricing changes, menu adjustments, and sourcing helps diners understand the reasons behind price hikes, stemming from rising labor and ingredient costs. This transparency maintains customer trust, even with 5-15% price increases implemented by 91% of independents in 2024.
Data Utilization
Soul & Smoke leverages technology and data analytics to optimize staffing, inventory, and hours based on real-time demand. This approach minimizes waste and labor cost overages, crucial in tight-margin environments.
Menu Management
Streamlining menus to focus on high-margin items and sustainable, locally sourced ingredients reduces complexity and waste while appealing to customer values around health and sustainability.
Feedback Management
Staying highly attuned to customer feedback enables restaurants to adapt quickly, whether by adjusting portion sizes, introducing prix-fixe menus, or creating new dining experiences that appeal to shifting habits.
These strategies reflect a holistic approach where culture and community commitment combine with data-driven operational tweaks and transparent customer communication, all helping independent restaurants like Soul & Smoke navigate inflation and rising costs post-pandemic.
The James Beard Foundation's annual report provides valuable information that owners can use when looking at their menus. For example, the 2025 Independent Restaurant Industry Report reveals a drop-off in profits after a 15% price increase.
Carter advises business owners to be flexible and listen to their customers and staff. He also encourages leaders to choose the best tools, stay rooted in authenticity, listen and adapt, and build something bigger than the product.
This article is part of an ongoing series highlighting family-owned and operated businesses and edited by Jiah Choe and Kristi Lindahl. It also promotes a conference for ambitious business leaders to unlock new growth opportunities. Critical reviews can offer opportunities for growth, such as adding a less fatty option for brisket. Independent restaurants make an average of 3-5% profit margins.
Soul & Smoke's community engagement, such as the community fridge, contributes to a lasting brand identity. The restaurant industry's resilience during inflation and rising costs is attributed to a shared commitment to hospitality, culture, and community.
