Podcast Episode Summary
RESTAURANT STRATEGY with Chip Klose
Episode: Why Not Raise Prices Every Single Month?
Date: February 5, 2026
Episode Overview
In this episode, host Chip Klose challenges a longstanding restaurant industry belief: that profit margins must stay razor-thin. With a bold proposal, Chip advocates for a simple but transformative practice: raising menu prices every single month. He introduces the concept of "popcorning prices"—incrementally raising prices on a rotating portion of the menu on a monthly basis—as a method for independent restaurants to secure consistent, predictable, and sustainable profitability.
Key Discussion Points & Insights
The Razor Thin Margin Myth
- Chip describes his dislike for the phrase "razor thin profit margins" and the resignation many restaurateurs feel about barely making ends meet.
- Quote (13:16):
“This idea, the razor thin profit margins, right? The fact that we're barely slicing off enough for us at the end of the day is ridiculous. And so I want to get rid of it.”
- He reminds listeners of the ecosystem restaurants support: staff, vendors, farmers, and the local economy.
- Owners deserve to make money just as every stakeholder in the hospitality chain does.
The Importance of Prime Cost
- Prime cost = Cost of Goods Sold (COGS) + Labor; should be below 60% for meaningful profit.
- Both COGS and labor are controllable, and thus, owners have real opportunities to improve profitability.
- Emphasizes "control the controllables"—owners choose what to buy, who to hire, and how much to charge.
Why Raise Prices Monthly?
- Large chains have fixed costs and locked-in prices, so they're not the target audience; independents are much more vulnerable to fluctuating ingredient costs.
- Food distributors increase prices as the market shifts. Restaurants must respond in kind to protect margins.
- Chip’s core philosophy:
“You should be raising your prices every single month.” (17:45)
Consumer Psychology
- Most restaurant owners resist raising prices out of fear they'll lose customers.
- Chip counters that supermarkets and other industries have trained consumers to expect small, regular price increases.
- Training customers to expect gradual, rolling price hikes helps normalize the practice.
The Popcorning Prices Strategy
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Do not raise all prices or by a uniform percentage every month.
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Instead, increase prices on 5-10% of menu items each month.
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Menu price increases are targeted based on:
- Which items have the biggest cost increases.
- Which items are most popular.
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Over the course of a year, every item can be adjusted, but not all at once.
-
Quote (25:05):
“What you do is something I call popcorning prices. So every single month you are going to increase prices on your menu, but not your entire menu. This is really, really crucial.”
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Example: If the cost of printing a new menu is $1,000, raising top sellers by a modest amount ($1-2) can quickly recoup the investment and then some.
Data-Driven Decision-Making
- Use real-time data (e.g., from software like Margin Edge) to track food cost fluctuations and trigger targeted price increases.
- Evaluation every month:
- What have ingredient price spikes done to plate profitability?
- Which unpopular items should be cut?
- Which items remain profitable and need adjusting?
- If an item is underperforming or profit has slipped below the target, it’s either pruned or its price is increased.
Results of Popcorning Prices
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Spreads increases across the year so customers never feel “nickel and dimed.”
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Conditions guests to accept routine, reasonable price shifts—as they do at grocery stores.
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Preserves and elevates overall profitability.
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Quote (30:59):
“You are starting to groom your consumers to expect little price increases just like the supermarket does. ... So they come to expect it. And it doesn't ding their favorite item every single month. It only dings their favorite item once a year or twice a year. That's okay, because they see other things changing.”
Notable Quotes & Memorable Moments
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(00:24)
“You should be raising your prices every single month. Sound crazy? Cool. Let's get into it, let's talk about it.”
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(14:44)
"You shouldn't feel bad about wanting to make money from the thing you're already so good at."
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(18:30)
"When we say I don't want to raise prices, it gets us into a bad habit... the underlying assumption is 'I don't want to raise prices because if it's too expensive, people will stop coming.' That just means you haven't properly groomed your consumers."
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(25:45)
"Every month you sit down, you've got a lot that you sell in your restaurant. So just pick some items and raise the price little by little. And I promise you... the ROI on a new print should pay for itself when you do this."
Important Segment Timestamps
- 00:24 – Chip introduces the core thesis: monthly price increases
- 13:16 – Dismantling the razor thin margin mentality
- 15:35 – The ecosystem of restaurant economics
- 16:30 – Aiming for consistent, predictable profits (20%-30%)
- 17:45 – Why monthly increases only make sense for independents
- 18:30 – Avoiding the “bad habit” of resisting all price increases
- 25:05 – Introduction and explanation of "popcorning prices"
- 28:50 – How to decide which menu items get increased
- 30:59 – Grooming consumers and the supermarket analogy
Tone & Closing Thoughts
Throughout the episode, Chip's tone is candid, practical, and empowering. He directly addresses owners' fears, challenges conventional industry wisdom, and encourages listeners to adopt a more assertive, data-driven approach to menu pricing for the health and longevity of their businesses.
Chip concludes with an invitation to subscribe and to learn more about his P3 Mastermind program for independent operators looking to improve their profitability.
For independent restaurant owners: Adopting the 'popcorning prices' strategy—a data-informed, incremental, and regular approach to menu price increases—can be the difference between struggling for survival and achieving long-term, stable profitability.