Rising Food Prices Killing Your Margins?

As you know, the prices on key products like meat, produce and a host of other food items are up dramatically this year and could go even higher. This means that even with stable sales and customer counts, food and other cost increases are putting additional stress on already narrow restaurant profit margins.
Now might be a good time to step back and make sure you’re employing smart purchasing practices and doing everything possible to maximize the utilization of the products that come in your back door and minimize losses to shrinkage, waste, spoilage and over-portioning.
He’s is a short list of practices adhered to by many of our most successful and profitable members’ restaurants. If you’re aren’t following them, now may be the perfect time to rethink and improve your food cost control systems.

  1. Don’t over-purchase. Buy just what you think you’ll actually use. This will reduce waste and improve portioning, as employees won’t think they have an endless supply to use.

  2. Check your product specs. Are you using the most appropriate grade or quality of product for the task? If 99% of your customers won’t notice the difference, maybe it’s time to change the specs on some products.

  3. Check your portion sizes. This can be tricky because you don’t want to lower customers’ perception of value. But when faced with price increases or tweaking portion sizes, well, take your pick.

  4. Consolidate purchases. Could you get lower overall prices by buying more products from one supplier? Some restaurant have lowered their food cost overnight 4%-5% and more by doing this.

  5. Calculate your food cost every week, not just once a month. Weekly food costing will make your kitchen staff more aware and accountable for food cost fluctuations. You’ll be able to respond to problems quicker and it will change the culture in your kitchen with regard to food cost control.

When food costs go up, you’ve got three options to maintain your margins. 1) Work smarter to control your costs, 2) raise prices or 3) a combination of both. Make sure you’re doing all you can to make the most of the food you do get at the best prices possible.