In the year to March 2026, food prices rose 3.4% according to Stats NZ, and consumers under cost-of-living pressures are cutting back on dining out. The hospitality industry still posted record annual sales of $16 billion in the year to June 2025, but the Restaurant Association reports the growth came at a cost. “Every dollar of the 1.4% sales growth has been earned against substantial cost increases that continue to pressure margins across the sector,” says CEO Marisa Bidois.

This article covers practical steps you can take in response, from reworking your menu and sourcing to tackling waste and rethinking how you price.

Make your menu work harder

The Restaurant Association reports that operators across the country are simplifying their menus to manage rising costs. Fewer items on the menu mean less inventory in your cool room, less waste, simpler prep and fewer things going wrong during a busy service.

Start by ranking every dish on two axes: food cost percentage and popularity. The framework is called menu engineering, and it sorts your menu into four categories:

  • Stars (high margin, high popularity): promote these, feature them prominently and make sure staff are recommending them
  • Plowhorses (low margin, high popularity): re-engineer the recipe, adjust the portion or nudge the price up
  • Puzzles (high margin, low popularity): reposition on your menu, rename the dish or have front-of-house talk them up
  • Dogs (low margin, low popularity): cut them, unless a recipe tweak or better positioning can turn them around

Melbourne-based training platform Typsy runs a practical course on the process if you want to go deeper.

A “two-speed menu” is emerging as the model for operators who want both efficiency and interest: a tight core built for margin and consistency, paired with rotating specials for seasonal dishes and premium pricing. The core keeps your kitchen fast and your costs predictable. The rotating side gives customers a reason to come back and lets you charge more for limited-availability items.

Before you raise prices on an underperforming dish, check whether adjusting the portion or swapping a component gets you there. A slightly smaller protein serve with a more generous side of seasonal vegetables can shift a dish from a Plowhorse to a Star without changing the price on the menu.

Shift toward seasonal and local sourcing

The gap between food inflation categories tells you where to look. Meat and poultry rose 8.6% over the past year while fruit and vegetables have been more volatile but generally more affordable. A menu that leans harder into seasonal vegetables, chicken, eggs and legumes reduces your exposure to the categories climbing fastest.

A shorter menu built around seasonal ingredients also makes your sourcing more predictable. When you build dishes around what’s abundant and in season, you avoid paying premium prices for out-of-season produce and reduce the risk of ordering ingredients you can’t use before they spoil.

Building direct relationships with local growers shortens your supply chain, reduces transport costs and gives you more flexibility when prices move. This works at every scale. A café can move from a fixed sandwich menu to a daily board built around what arrived that morning. A restaurant can anchor its core menu around cost-stable proteins like chicken and build seasonal interest through vegetable-forward specials. A bakery seeing sugar and chocolate prices climb can introduce savoury lines or fruit-based pastries using whatever is cheap and plentiful right now.

Track what you waste and recover the cost

Industry estimates suggest up to 10% of food purchased by restaurants is lost to waste or inefficiency. If your weekly food spend is $3,000, that’s $300 a week, and $15,600 a year.

A one-week waste audit is the fastest way to find where the money is going. Weigh and log what you throw out by category: prep trim, spoiled stock, uneaten portions, over-production. That baseline tells you what to fix first. From there:

  • Implement FIFO (first in, first out) stock rotation
  • Use off-cuts for stocks, sauces, staff meals and specials
  • Batch prep to match expected covers, not maximum capacity
  • Build flexibility into your recipes so you can use what’s on hand
  • Design your menu so ingredients can move between dishes rather than sit unused
  • Right-size portions on dishes that regularly come back unfinished

The Kai Keepers programme, a Restaurant Association initiative with Edge Impact supported by the Ministry for the Environment, found that 43% of food waste in cafés and restaurants comes from uneaten food on customer plates. On a $15,600 annual waste bill, that’s roughly $6,700 a year coming back to the kitchen on unfinished plates, much of which you could recover by adjusting portion sizes.

To help you turn waste into savings, we’ve put together a free one-page waste audit template you can print, stick near the bins and fill in over five days.


Download the kitchen waste audit template

There’s a customer-facing angle too. A café that says “we’d rather sell out than throw out” is making a values statement that lands with conscious diners. Some venues communicate this through menu notes explaining that dishes rotate based on what’s fresh, or by briefing front-of-house staff to frame limited availability as intentional.

For younger demographics especially, sustainability sells, and it costs nothing to talk about what you’re already doing. The Restaurant Association’s Kai Keepers programme offers further insights for operators looking to cut waste.

Get smarter about how you order

If you’re ordering from memory or a notepad, you’re probably losing margin without seeing it. Even a basic spreadsheet that logs what you receive, use and throw out each week is a step up.

Set par levels (the minimum stock you want on hand for each ingredient) for your highest-cost items based on actual usage, not habit or what your supplier’s rep suggests. Review whether your ordering frequency matches real turnover: smaller, more frequent orders can reduce spoilage even if per-unit cost is slightly higher.

Supplier pricing on the same product can vary 10-20% between wholesalers. If you haven’t compared prices recently, that’s one of the fastest wins at hand. Knowing the market rate for your staples gives you the conversation to have with your current supplier before your next order.

Our free supplier price comparison template gives you a simple one-page grid to compare your top 10 ingredients across three suppliers and work out where you could be paying less.


Download the supplier price comparison template

Long-term supplier relationships can unlock savings that go beyond price matching. If you’ve worked with the same wholesalers for years, that relationship is worth leveraging when costs shift. Committing to larger volumes, consolidating orders or agreeing to longer terms can all open the door to better pricing, and suppliers would rather negotiate than lose a reliable account.

Reduce your energy costs

With electricity up 12.5% in the past year, your energy bill deserves the same attention as your food spend, especially when your venue runs commercial ovens, fridges, dishwashers and HVAC all day.

The most effective fixes are often maintenance-based. Dirty condenser coils on commercial fridges and freezers increase energy consumption by 25% or more. Scheduling ovens and dishwashers outside peak tariff periods reduces costs without changing output. LED lighting, if you haven’t switched already, pays for itself within months. And getting competing quotes on your energy plan takes an afternoon.

If you’re looking at replacing an ageing fridge or upgrading to a more efficient oven, the low-value asset write-off lets you deduct the full cost of assets up to $1,000 immediately. For larger purchases, the 20% Investment Boost (available for new assets purchased from 22 May 2025) brings forward your depreciation claims. The small business tax deductions guide covers what you can claim and how.

If your business also runs deliveries or vehicles, whether you operate a food truck, a catering company or multiple sites, the guide to managing fuel costs covers strategies for that side of the expense sheet.

Price with precision

In hospitality, pricing adjustments work best when they’re targeted rather than across the board. Small, regular increases are less noticeable than one large jump. Two 4% adjustments spread across your menu over six months are easier for customers to absorb than a single 8% round.

Focus increases on premium items where customers already expect value: specialty coffee, signature dishes, anything with a story or perceived scarcity. For example, with coffee bean prices surging globally after poor harvests in Brazil and Vietnam, customers are already primed to accept that a good cup costs more. Stats NZ data shows the price of a takeaway coffee rose $0.32 over the past year, and is now $1.12 higher than five years ago.

Where you place your dishes on the menu matters as much as the prices themselves. A premium dish at $42 makes the $28 option feel like a reasonable choice. A $7.50 single-origin pour-over makes the $6 flat white feel like good value.

Customers notice price changes whether you flag them or not, so be upfront about it. A brief, honest explanation on a menu insert or from front-of-house staff builds more trust than hoping nobody will look too closely.

For more pricing strategies, read our guide on 9 strategies to protect your profit margins right now.

Line up funding before you need it

Hospitality cash flow is lumpy by nature, and the right funding can smooth it out.

A business line of credit can cover stock purchases ahead of a busy period, bridge a slow month or fund equipment that reduces ongoing costs. You draw what you need, when you need it, and only pay interest on what you use. A small business loan suits a larger one-off investment, like a kitchen fit-out or a piece of equipment that qualifies for the low-value asset write-off or the Investment Boost.

The operators who manage through stretches like this tend to be the ones who arranged their options before things got tight.