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Rapidly rising prices have become a new challenge for the restaurant business in Ukraine. After the currency fluctuations and supply disruptions of 2022-2023, the industry entered 2024 with some relief. However, in 2025, economic pressure is growing again, and food establishments are the first to feel it. Let’s examine the impact of inflation on major cost items and share practical tips to help stay profitable even under price pressure.
Inflation 2025: What Restaurateurs Should Expect
The beginning of 2025 was marked by another price jump. Adjustments in the currency exchange rate, tariff increases, and energy challenges had their effect: in March, inflation reached 14.6% year-on-year. The largest cost increases were in restaurant and hotel services, transport, and utilities.
According to the NBU forecast, inflation is expected to slow to a level of 8.4-8.7% by the end of the year. But it’s important to understand that even such “moderate” inflation does not mean stability. On the contrary, it will lead to a gradual increase in the cost of key elements of the restaurant business.
It’s important for restaurateurs to monitor not only the general consumer price index but also specialized metrics:
- Food inflation — the rise in food prices;
- Services inflation — this category includes restaurants;
- Exchange rate fluctuations — as imported goods depend on the hryvnia’s exchange rate.
In 2024, food prices rose moderately, but the cost of dishes in restaurants increased faster. Moreover, some categories are growing faster than others.
Rising Costs of Food and Beverages
Procurement prices for food have risen due to both general inflation and specific factors of the war. According to 2024 results, almost 45% of restaurateurs reported a 10-20% increase in procurement costs. Statistics clearly show that food cost has significantly increased as a percentage of revenue, which puts pressure on profitability.
The reasons are clear. Imported products have become more expensive due to the unstable hryvnia exchange rate and complex logistics. But local suppliers have also raised prices: sowing campaigns in the south and east of Ukraine are complicated, and producers are forced to pass on costs to the consumer.
In 2023-2024, many began to revise their menus specifically to control food costs. According to Dmytro Pohrebytskyi, co-owner of the Pesto Cafe chain, their company uses three approaches at once:
- Selective price increases.
- Margin optimization.
- Menu updates.
Among the typical solutions implemented by Ukrainian restaurateurs are:
- Maximizing the use of local and seasonal products instead of imported delicacies;
- Simplifying the menu, reducing SKUs (stock keeping units), which allows for a smaller range of purchases and more favorable wholesale contracts;
- Searching for alternative suppliers.
It’s also necessary to actively manage inventory, as every kilogram of tomatoes, meat, or fish spoiled during downtime due to air raids or a lack of customers is lost money.
Rising Staff Costs
The staffing issue for restaurants is now more acute than ever. On one hand, there is a shortage of workers due to mobilization and emigration abroad; on the other, there is an increase in labor costs. In 2024, an increase in the military levy rate added further pressure on the payroll fund.
Many qualified chefs, baristas, and waiters have found work abroad and are in no hurry to return, while those who remain often change fields or demand higher salaries.
Global surveys show that 79% of restaurants expect further increases in staff costs in 2025, so they are looking for solutions: implementing automated scheduling, performance bonus schemes, and cross-training employees for greater flexibility.
Energy and Utility Services
In 2022–2023, energy prices skyrocketed worldwide, partly due to the war. Gas prices in Europe hit records, and petroleum products also became more expensive. In Ukraine, an energy crisis arose due to shelling.
In 2024, the situation somewhat stabilized. Ukraine’s energy system withstood the winter, and much of the damage was repaired. However, electricity tariffs for businesses have increased.
Restaurateurs name electricity and fuel costs among their key challenges. During last year’s rolling blackouts, those without backup power had to stop work, risking food spoilage in refrigerators. Therefore, almost everyone invested in an uninterruptible power supply.
While pre-war establishments could almost ignore these costs in their overall budget (for example, electricity and water were 3-5% of turnover), this figure now sometimes reaches 10% or more.
Logistics and Supply
Suppliers include costs for fuel, vehicle fleet maintenance, and the dangers of delivery under shelling. If an establishment handles its own food delivery to customers, the margin could also be “eaten up” by the cost of fuel for couriers and vehicle depreciation.
Rent can also be included in this cost category, as it is often tied to the dollar or indexed to inflation. In 2022, many landlords were accommodating to businesses, reducing rates or switching them to hryvnia. But in 2024-2025, property owners are increasingly demanding a return to pre-war payment terms.
How Restaurateurs Can Respond to Inflation
Let’s consider the key strategies Ukrainian restaurateurs are using to adapt to inflation.
Menu Optimization
Practice shows it’s better to have a shorter menu with controlled costs than a long list of items where half the ingredients are imported delicacies. Using seasonal and local products is the foundation of optimization: it’s not only cheaper but also attractive to guests in terms of freshness and support for local producers.
Menu Engineering
Food cost engineering is now more relevant than ever: analyzing the sales and profitability of each dish allows for the removal or replacement of items that are “heavy” on the margin.
Automation and Digital Solutions
Firstly, automation helps compensate for staff shortages and rising costs. For example, switching to QR menus and self-service reduces the need for waiters; self-order kiosks are successfully used in fast-food and are gradually entering casual dining. Secondly, accounting software (POS systems, inventory modules) allows for tight control over expenses, detection of theft or overspending, and optimization of procurement. Thirdly, automating business processes saves management time that can be directed towards development.
Collaboration with Local Suppliers
The trend for local cuisine is only growing stronger: customers appreciate authentic tastes and transparent product origins. This is not only economically justified but also adds uniqueness to your menu.
Cost Control and Efficiency Improvement
Restaurants are reviewing their operating hours: perhaps the morning hours are unprofitable, and it’s better to open later. Many have also cut back on unnecessary marketing activities. Switching from old lamps to LED lighting, installing motion sensors, energy-efficient ovens, and water-saving nozzles — all these small things reduce utility bills.
To Sum Up
Of course, raising prices remains a last, but inevitable, tool. Most restaurants have been forced to increase their menu prices due to rising costs. In 2025, it’s wise to do this cautiously: it’s better to make small, frequent increases than a single, sharp one.
In the current conditions, the BRG consulting company helps restaurants find optimal solutions. Our experts analyze costs, develop strategies for procurement optimization, menu engineering, and process automation. This will allow you to maintain service quality, control costs, and remain profitable even with rising inflation.
Look to the future with confidence with BRG!
Our experts analyze costs, develop strategies for optimizing procurement, menu engineering, and process automation.