Tag: restaurant operators

Reduce Restaurant Costs

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.

 

coffee shop or cafe

As the Coronavirus Spreads, Restaurants Fight Scare with Super Hygiene Tactics

On December 31, 2019, China reported several cases of pneumonia caused by an unknown virus in the port city of Wuhan. One week later, the World Health Organization (WHO) announced that they had identified the causative virus as belonging to the coronavirus family.

How the Coronavirus Began

There are several speculations as to how the virus first affected humans. Whether the Wuhan coronavirus found its way via workers at the Huanan Seafood Wholesale Market, leapt from bats to humans, or, as conspiracy theorists are prone to believe, is associated with weapons research at the Wuhan Institute of Virology, it’s clear that it has changed the face of China and possibly the world…at least for now.

And restaurants are not immune.

McDonald’s recently shut down approximately 300 restaurants in China and set up an epidemic task force in response to the virus. A Chinese restaurant in San Gabriel that specializes in dry hot pot from Wuhan has seen their orders cut in half. Diners are changing their destinations, leaning away from big city Chinatowns. When a Philadelphian took a random Facebook poll, 40 out of 100 respondents said that, for now, they would avoid Philadelphia’s Chinatown.

Dr. Allen Chan, owner of Jasmine Seafood Restaurant in San Diego, reported to 10News that, after the WHO declared an international public health emergency due to the Wuhan coronavirus, customers dwindled. As a doctor, he decided to take things into his own hands and “fight the fear with hyper hygiene.”

He installed sanitation pumps at the entrance, and reminded customers to avoid double-dipping or shared cups. Remarkably, he even played the CDCs notes on the virus on a giant projector. He’s also ordered masks for servers which, due to high demand, are on back order. While some restaurant operators may see these actions as a little over-the-top, Chan’s customers seem to appreciate his actions and concern.

Steps to Help Keep Guests and Employees Safe  

For those in the restaurant industry, there are simple steps you can take to minimize the chance of a virus, be it the now infamous Wuhan coronavirus or the common influenza, from gaining hold in your establishment and taking down staff and customers alike.

Laurie Garret, a reporter who traveled throughout China and Hong Kong during the SARS epidemic of 2003, shared in Foreign Policy the several important steps she learned to help her keep virus-free despite being in both cities and rooms with those who were infected. Here are a few or her tips as well as other important preventative strategies that restaurants can incorporate.

  • Take a close look at public areas where people commonly put their hands. This includes doorknobs, menus, and the back of chairs. Be sure to wash these areas regularly, as well as handheld devices that your staff commonly uses such as phones, keyboards, stairway banisters, and POS systems.
  • Frequently used items such as towels in the kitchen and pens in the front of the house should be given out with the names of staff members written on them. Viruses thrive in damp towels, so make sure that the staff is aware of this and that they trade in their towels for new dry ones on a regular basis.
  • If you offer family meal style food or group appetizers, nudge your guests to avoid double-dipping by supplying an abundance of utensils and small plates. Consider creating individual serving size portions.
  • Put a sign up for both guests and staff reminding them to avoid touching their face, including rubbing their eyes, and washing their hands frequently, particularly after touching surfaces that are commonly handled. Single-use gloves in the kitchen are always a good idea as well as a reminder to follow established hygiene practices by washing their hands before handling food, after using a tissue, coughing or sneezing, and after eating or drinking.
  • Retrain staff on the basics of good hand washing practices which includes scrubbing in between fingers, under nails, and washing for a minimum of 20 seconds.
  • Masks, on the other hand, may not be very helpful, and are a visual reminder of the reason that many people have opted to forego dining out for now. If one of your staff comes to work with signs or symptoms of an illness, it’s best to send them home. In this day and age of labor shortages, it can be tempting to ignore the signs that an employee is sick, but your guests and other employees will appreciate your consideration regarding their health and well-being.
  • With the current estimated incubation period (time of exposure to the development of symptoms) of the coronavirus ranging anywhere from 2 to 14 days, people may be contagious before they even know that they are sick. Because of this, those in the hotspots, such as McDonald’s, have gone so far as to measure the body temperatures of all employees when they get to work.

Keep in mind that, while some people are putting in their online orders for masks, meals, and services, and avoiding human contact as much as possible, others are wondering why mass hysteria seems to be setting in.

Just to put things into perspective, last year’s flu season resulted in approximately 34,200 deaths in the U.S alone. While this may do little to ease your fears regarding an unknown virus and its potential mortality rate, numbers like this remind us that we live in a world inundated with viruses, bacteria, mold, fungi, and tiny insects that we cannot see, but can kill us. Feel better?

While it’s important to take necessary precautions, it’s also wise to maintain calm amidst a storm of unending end-of-the-world diatribes. The unknown has always had the ability to take our minds and run with the worst-case scenarios. While we don’t know when the virus will die off or the final toll it will take, we do know that, as with any virus, by taking necessary precautions, we can minimize the risk to both our customers and employees.

Inclement Weather - Restaurant Operators

Supply Chain Challenges During Inclement Weather

Inclement Weather - Restaurant Operators

This article was originally published on Modern Restaurant Management.

“Mother Nature is not sweet.”

–John Shelby Spong

Mother Nature is often the X-Factor in the world of food.  All the commodity experts have their projections on what will happen with every crop, but leave it up to a drought, flood, freeze, or any other natural disaster you can think of to ruin all theories.

Weather clearly plays a vital role in determining food costs for restaurant operators.  So, when it comes to risk management, having contingency plans for weather-related challenges should be at the top of the list.

Operators can pass through these unavoidable implications brought on by Mother Nature if they take the correct and necessary steps to protect themselves and their supplies. Here are some ways to prepare and minimize the impact:

  1. Create an acceptable list of substitutions for key / high volume ingredients that are critical to your menu. Examples of this include using iceberg lettuce in place of romaine, blueberries in place of strawberries, and plum tomatoes in place of layered tomatoes.
  2. Identify an alternative / limited menu option in advance in anticipation of certain products being unavailable. These can be used as limited-time offers until your original ingredients become available.
  3. Pre-determine alternative sourcing for your top 20 critical items.
  4. Adjust par levels and confirm the right pack size being used to minimize waste.
  5. Utilize every and all local produce programs at your disposal. The window of opportunity may be limited so work with your produce supplier to determine best opportunities.
  6. Switch to smaller sizes where you can, as larger sizes become less available in drought situations.
  7. If you can, use a frozen product in recipes that can easily accept them.
  8. If you have room, plant a garden near your restaurant and capture the “grown here” flavor.
  9. Look to use greenhouse type products in your menu.
  10. Check your trashcans!! Yield becomes even more critical when the raw product cost goes up.
  11. Maintain flexibility whenever possible on menus. Avoid specifying particular vegetables or fruits whenever possible.
  12. Look at blending products where you can continue to work with your high-cost staple, but combine it with a lower cost vegetable or fruit.
  13. Look at alternate pack sizes that may be more cost friendly.

Nobody can truly predict what Mother Nature has up her sleeve.  By having a plan before the next natural disaster occurs you can better protect your ingredients, menu items and customer expectations.

 

By Wade Winters