EHS Newsletter No. 5 June 24, 2026

FRONT PAGE NEWS

Summer Starts with a Mixed May

May brought warmer temperatures and longer days, but the numbers told a more complicated story.

Across the EHS client base, sales were up slightly year-over-year, but just slightly. Gains were modest and varied widely by operator. Some restaurants posted strong performances and kept the momentum from April's encouraging results going, but many others saw sales come in flat or down compared to May 2025.

Profitability proved even more challenging. Most operators earned roughly the same as, or slightly less than, last year, despite relatively stable consumer demand. Margins remain under pressure, and with inflation back in the headlines, there's little room for costs to drift.

The good news: summer is here, and with it come real opportunities. Patio season, festivals, Father's Day and the general lift in foot traffic that warmer months bring are all reasons for cautious optimism. But capturing that upside will require staying disciplined on the cost side. As we've said before, control the controllables. Keep a close eye on food and labor, watch those delivery fees, and know your numbers heading into the busiest stretch of the year.

When Is It Time to Raise Prices? 

 Raising prices is one of the most powerful moves you can make for your bottom line, and also the one operators tend to put off the longest. Sound familiar?

Here's the thing: pricing doesn't have to be a gut-wrenching decision made in a panic when costs spike. There are real, practical ways to know when it's time.

• Do a little menu engineering. Pull up your best-sellers and look at what they're actually contributing to the bottom line. Some of your most popular dishes might be working harder for your guests than they are for your margins. A small price bump on a high-volume item? That math adds up fast.

• Peek at what your neighbors are charging. Take a look at comparable spots in your market. If similar concepts are getting more for equivalent offerings, your pricing may have quietly fallen behind. This doesn't have to be a big research project, even a quick scan of a few menus can be eye-opening. 

• Cost out your cocktails. Seriously. Liquor, mixers, garnishes, costs have shifted a lot over the last few years. If you haven't run the numbers recently, your margins on that signature cocktail might not be what you think they are.

The operators who review pricing regularly, not just when things feel painful, are the ones who avoid the big, uncomfortable jumps. Small, intentional tweaks over time beat one giant menu overhaul every time. Need some direction? An EHS Advisor would be happy to help!

Set up a meeting with us!

Accounting Explained: Identifying Your Profitability Targets 

Not all numbers are created equal. Knowing which ones to watch is half the battle, and these three benchmarks are a great place to start.

Your rent is trying to tell you something. A good rule of thumb is that total occupancy costs (rent, real estate taxes, utilities, and repairs and maintenance) should land at 8-10% of net sales. Consistently over that? Hitting your profitability goals gets a lot harder without a serious sales lift to compensate.

Prime cost is your north star. Prime cost combines your Cost of Goods Sold and Total Labor, and it's one of the most important numbers in your business because it's also one you can actually control. Shoot for 65% or below. Once you creep toward 70%, you're likely hovering right around break-even, and there's not much cushion left for anything else.

Operating profit is the report card. If your sales and prime costs are in good shape, a healthy restaurant should be landing somewhere in the 8-12% operating profit margin range, before debt service and owner distributions. Falling short consistently is a signal worth paying attention to, whether that means pushing for higher sales or tightening up costs.

Benchmarks won't run your restaurant for you, but they'll tell you where to look. Not sure how your numbers stack up? That's exactly what we're here for.

Know your numbers. Run your business better. Press here and we’ll show you how.

What are we excited about? Our client Mike at Akahoshi Ramen is out there showing us all how it's done! We already knew he and his team are one of the best in town but it's pretty awesome when others notice, too. Congrats on being named on of Chicago's best in Chicago Magazine!

What are we reading?  Food journalism ain't what it used to be: So many layoffs and so many news outlets owned by private equity. But sometimes the darkest times bring about the most innovative things. Gourmet (no, not that one, but original Gourmet publisher let the trademark lapse and here we are) and Ravenous are just two of many worker-owned organizations putting out creative and thoughtful food and culture journalism written by some of the best in the business. We love the next level recipes in Gourmet like this Strawberry Cream Cake  and Ravenous' on-the-ground-coverage of James beard Weekend was an absolute delight.

Read the article here!