While now things have started picking up after Covid 19 there is still some uncertainty that restaurants are still facing. Low profits have led to restaurants having to shut down operations entirely. Growing costs are often among the main reasons for this. There is one way to ensure that your business does well to keep all your costs in check. Food cost is one of the biggest operating expenses in running a restaurant. The food ingredients are often perishable, and wholesale food prices have increased more than 25% in the past five years, according to the National Restaurant Association’s Industry Report.
#1 Modify Menu Regularly
Eliminate the menu items that are costly to prepare and unpopular. It’s good to be aware of what comes in and goes out of your inventory regularly. If it’s summer, there is more demand for cold beverages, you could then launch new drinks. You could also have seasonal items included in your menu, depending on the demand. This helps in cutting down costs because of the wide availability of ingredients. Ideas like these will have a lasting impact on customers, leading to higher profits.
#2 Inventory Management
Restaurants keep a lot more stock in their inventories than they require. Sometimes they lead to wastage. Manage your inventory in a better way by analyzing everything at hand. Restaurant managers may not reconcile inventory as often as they should, and mismanaging inventory can have a big impact on your food cost. Implement the following inventory practices to improve your cost of goods sold and sustain it over time. Make changes for your next set of purchases accordingly.
#3 Watch Out for Theft
Dealing with theft is a crucial piece of keeping your food cost in check. Employee discounts can also contribute to problems with theft, and it’s not just cooking or servers, studies show that four out of 10 manager discount codes are used fraudulently.
#4 Set Goals and Track Progress
One way to manage food cost is through the establishment of thresholds and ideal food cost variances for your restaurant. By monitoring the variances in ideal food cost versus actual food cost, you can pinpoint operational weaknesses, identify loss and theft, and combat rising commodity costs. You can aim for your ideal food cost and keep track of what is and isn’t working to push your restaurant’s food cost closer to your goal.
#5 Forecast Annual Sales
Looking at your past sales and using that data to predict your sales in the upcoming weeks is very important. Not only does this help managers control food waste, but it also results in better management of employee scheduling, ordering, and food prep. However, getting the forecast right requires more than a quick glance at your four-to-six-week sales average.