Operations

Pita Mediterranean getting creative to fight inflation

Provided

September 12, 2022

Pita Mediterranean Street Food, led by founder and CEO Nour Rabai, is succeeding despite inflation, a challenge facing nearly every restaurant in the market. Food-away-from-home prices, for example, were up about 7% over 2021 and will climb another 3 to 4% in 2023, according to the USDA.

"Inflation is the most recent hurdle that we have had to tackle in the restaurant industry," Rabai said in a company press release. "We have been talking with our vendors, renegotiating our contracts, and adjusting SKUs that we receive from certain vendors."

Rising costs are a concern in the industry, and Rabai has seen suppliers who have implemented the force majeure clause, which allows a party to leave a contract temporarily or permanently when catastrophes occur that were not foreseeable. Rabai and his team, however, have reduced the number of menu items to combat rising costs.

"We focused on simplifying the menu so our franchisees can still provide our quality Mediterranean cuisine," he said in the release. "When we do take away an item, it is something that is either not versatile enough to use for multiple applications or is too costly. We concentrate on keeping profitability margins while the cost of food and labor increases, and look to keep menu items that are easy to execute as staffing challenges persist."

Pita replaces removed menu items with products that it already has and looks for creative ways to offer new dishes. For example, French fries were always a high-volume seller, so the team created Greek Fries featuring fries topped with tahini, crumbled feta and garnish (all existing ingredients) to make it a top five producing item.

Menu pricing is a big concern for Rabai, which customers will directly see.

"When wages increased, we took a price menu increase to offset the cost, then we got hit with the food and distribution increase, so we had to take another menu price increase to absorb that," Rabai said. "It's a domino effect, when something happens, you have to combat it and still balance the customer experience."

So far, customers have been very receptive. Pit's Q2 sales, for example, are the best sales in the company's history.

"We are extremely grateful to our customers for this window of opportunity," he said. "We hope to continue to bring customers back into our stores to avoid the cost of third-party delivery platforms and costly to-go packaging. Plus, we want to see those smiling faces again."

Leaders of Atomic Wings, Famous Toastery and Beef O'Bradys, shared similar cost-cutting strategies and experiences with FastCasual. Click here to read the story.