Operations

Tariffs causing 4 strategy pivots for restaurants

Dilan Mehta, co-founder and CEO of Sizzle, an AI-powered food commerce platform, believes that restaurants considering the market's volatility as a moment to build digital muscle through forecasting tools, inventory intelligence and real-time sourcing will lead this next chapter of food commerce.

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May 14, 2025 by Dilan Mehta — CEO, Sizzle

Margins are always tight in fast casual dining, but with tariffs rising on key imports — eggs, produce, seafood, beer and beyond — those margins are now under direct attack. As someone building the rails between food content, inventory and consumer demand, I've been closely tracking how policy changes are disrupting the unit economics of everyday operators.

Tariffs aren't just taxes. They're triggers. They set off a chain reaction that affects sourcing, menu planning, inventory, marketing and customer experience. Below are five areas that may need a new strategy.

1. Rethinking procurement in real time
Operators have little choice but to reassess their cost structure. When egg prices surge 53%, avocados rise 25%, and salmon inches past $11 per pound, restaurants must either increase prices, shrink margins or innovate their menus. But too often, operators get stuck in short-term fixes — cutting portions, changing vendors, or pausing limited-time offers.
What to do: These are reactive moves. What we really need is infrastructure-level adaptability.
One of the most effective shifts I've seen: switching to regional suppliers and seasonal items, not just for freshness or brand story, but to avoid tariff exposure altogether. Ingredients like seed butters, local peppers or domestic seafood options can substitute for tariff-heavy items while creating an authentic narrative around sourcing.

2. Smart menus, digital signals
At Sizzle, we monitor how quickly consumer intent shifts when pricing, availability or sourcing changes. That insight can be used by operators to adapt menus on the fly. Whether it's building bowls around ingredients with stable domestic pricing or using digital systems to auto-flag rising ingredient costs, smart menus will drive smarter margin protection.
What to do:We're already seeing that brands that engineer for adaptability — building SKUs with variable components, simplifying inventory, leveraging bulk buys — are outperforming those who try to maintain fixed item lists.

3. Focus on consumer transparency
Your customers know prices are going up. What they want is honesty and value. That means reframing price increases as part of a commitment to sustainability or local sourcing. It also means investing in loyalty programs that create trust and retention.
What to do: Restaurant leaders should think of every tariff-triggered menu change as an opportunity to tell a story. A story about community sourcing, about resilience, and about giving customers something real. The brands that succeed won't just hide changes — they'll communicate them clearly and turn them into moments of connection.

4. Adaptation is the strategy
We're not returning to pre-2020 conditions. Tariffs, inflation and supply volatility are here for the long term. Operators who wait for stability will fall behind. Those who treat procurement as a static cost center will lose margin and flexibility, but those who see volatility as a moment to build digital muscle through forecasting tools, inventory intelligence and real-time sourcing will lead this next chapter of food commerce.
What to do: Food brands must close the gap between consumer demand and supply-side execution. Tariffs may be external, but adaptability is internal. Operators who modernize that mindset will not only protect margins —they'll position themselves as leaders in the most volatile food economy we've ever seen.

About Dilan Mehta

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