Tag: gpo

Anonymous Objections to GPO’s

Not only is the purpose of a Group Purchasing Organization (GPO) to provide operators with access to pre-negotiated contracts designed to save them time and money, but also to streamline operations and optimize sourcing strategies.

Too good to be true? It’s true!

We hear objections and questions about GPOs all the time and love to dispel rumors about what it is that a GPO like Consolidated Concepts is really capable of. 

Let’s review some common objections about GPO’s and how we usually set them straight:

GPO Programs Rarely Return Increased Profitability

One objection to joining a GPO is that the program rarely returns increased profitability because it’s assumed a GPO only focuses on purchase based management of a restaurants cash flow. This couldn’t be further from the truth.

A Group Purchasing Organization, such as Consolidated Concepts, encourages restaurants to utilize programs throughout a suite of services that help them get a handle on areas such as food cost management, cost of goods sold, master distribution agreements, inventory management practices, sku rationalization, menu engineering, portioning, fixed cost reduction, and more.

The easiest place for most restaurants to start is with a cash back GPO program that helps reduce their spend and put some money back into their bottom line. From there, GPO’s can help their clients dig into their purchasing data and address some of the more nuanced factors that contribute to their profitability.

You Have to Sacrifice Quality for Price

Another objection about joining a GPO is that operators must sacrifice the quality of their menu items or products to decrease their spend. Just because something is less expensive, or you get a better deal on it doesn’t mean the quality is any less.

It’s never encouraged to sacrifice quality for the sake of price. Contracts through GPO’s like Consolidated Concepts cover over 165k items ranging from premium to value options. So many restaurants are rightly focused on driving sales and top line revenue; a GPO seeks to help them grow more successful by taking a closer look at the cost side of the equation. For example, joining a produce management program can help operators improve the quality, safety and traceability of their food programs.

Today’s consumer, when choosing to spend dollars on foodservice, will not sacrifice their expectations of high quality. And they shouldn’t have to.

GPO’s Only Care About Costs Not Operational Behaviors

True sustainable growth does not only come from how much you save. 

It doesn’t matter if you are paying less for your supplies. If you are not aware of over portioning and are poorly prepared you cannot run a successful operation. The right GPO helps you focus on all these areas of your operation including inventory, food waste, portioning, plate costing and above all, top line sales management.

All these areas can be more profitable behaviors along with staff training, guest management, menu flow and mix and projected food cost expectations for what is being sold.

Group Purchasing Organizations such as Consolidated Concepts, do just that. By becoming a Consolidated Concepts member, restaurant operators earn cash back for free on rebate line items their restaurant purchases every day and gets access to resources that streamline their operation.

Contact Consolidated Concepts today to start leveraging our buying power, category specialists and broadline/negotiation expertise. Utilize our contracts, partners, experts and technology to reduce costs, improve quality, streamline the supply chain and gain valuable business insights.

4 Ways Restaurants Can Reduce Costs in 2021

2020 will be known as the year restaurants lost unfathomable amounts of revenue. Even worse, many were forced to close permanently.

It may be argued that restaurants that closed were running rather inefficient operations and were not focused on utilizing best practices on both the revenue and cost side in order to drive profitability.

One of the most important lessons that restaurants did learn this year is they need to use all the resources that are available to them to drive their own success.

Much attention has been paid in the media, on webinars, and among the public audience, to the creative ways in which restaurants are attracting new customers and meeting the shift in customer demands. That same creativity needs to be applied to the cost side of the profitability equation.

Here are some impactful ways that restaurants can reduce costs in 2021.

Sku Rationalization Can Reduce Costs

Deciding whether a product should be kept or discontinued can reduce inventory costs and cut down the complexities in procurement, production and distribution.

Spend time looking at your menu item performance and food cost metrics. Walk through each menu item and the ingredients they use. Ensuring that ingredients are being cross utilized is paramount in driving profitability at your restaurant and is helpful to the front line operation.

By focusing on sku rationalization, you can help ensure that your restaurant chain is maximizing on profitability while also avoiding potential risk of spoilage. Finding high quality and cost-efficient solutions to replace ingredients you aren’t using or selling as much can minimize SKUs while maximizing taste and profit.

Assess Utilities and Fixed Costs

Every penny counts these days. Often, operators don’t realize how much utilities costs can play a huge factor in monthly operational costs. Try switching the type of light bulbs you are using, upgrading your HVAC system or adding window tint.

By making changes and improvements such as these to your operation, you can reduce recurring expenses, save money and increase your bottom line.

Monitoring Inventory and Costs of Goods Sold

Using technology to track your inventory and recipe costing can show an operation their true costs of goods sold. If you are taking inventory once a month or even once a quarter, you could be losing money and not even know it. By conducting stock management checks on a daily or weekly basis, you can keep up to date on the latest price changes and what’s selling and not selling (which can also assist you with your sku rationalization!).

Keeping track of your inventory can also help with maximizing promotions and menu innovation using the products that sell the most – and even products that are set to expire soon so you don’t waste them.

Partner with a GPO to Reduce Costs

Group Purchasing Organizations (GPO’s) can leverage the buying power and purchasing data from all their operators to offer the best pricing on contracts, data services, and expertise across all foodservice segments. Partnering with a GPO brings instant savings to your operation in areas like produce management, staff uniforms, sanitation and inventory costs.

All these are just a few ways in which restaurants can see significant savings to their operation and maximize the margins that they earn from the revenue they bring in. By choosing a GPO like Consolidated Concepts you get access to a fully customizable service that brings you instant savings on thousands of items. Contact us to learn how we can bring you buying power, category specialists and broadline/negotiation expertise to your multi-unit operation. Utilize our contracts, partners, experts and technology to reduce costs, improve quality, streamline the supply chain and gain valuable business insights.