The weather in many regions was tough in February but the economy showed an advance over last year. Grain prices have risen tremendously and many operators are wondering whether to pass the higher costs along to guests. This is a difficult call to make nationally since competition varies by region, city and even by neighborhood.
If you decide to pass along the higher costs by raising your menu prices, there are 3 ways to cover the increase:
1) Increase the price of major entrees by an amount which will cover just the additional cost.
2) Increase the price of all menu items across the board to cover just the additional cost.
3) Strategically increase prices over several quarters to cover costs and produce a profit large enough to cover the risk of further price volatility.
Many operators wonder whether they should lower the prices when the commodity markets retreat. I wouldn't let the commodity markets dictate pricing policy in the long term. As the economy heats up, energy consumption increases will produce additional volatility. Constantly changing menu prices up and then down with each shift is a mistake.
If you decide to establish a policy of steady and more gradual price increases over several quarters, your guests won't see you twisting in the wind. Competition will guide you in determining how much of an increase the market will allow.
Many restaurants have been offering reduced entree prices of $9.95 and below. Should you go over $10 if your menu fits this profile? I'd recommend a move now above $10. With the press reporting the big run up in grain prices, many people have been conditioned to expect price increases.
Minggu, 06 Maret 2011
10 Ways to Reduce Your Food Cost
I'd like to thank Ron and RoseAnne from ReedExpo for inviting me to speak at the International Restaurant Show in New York City this week. The show was well attended and there was excellent energy. This show is without question THE New York City restaurant show.
We had a great group attend the presentation "10 Ways to Reduce Your Food Cost Without Jeopardizing the Guest Experience" and I want to thank all the attendees.
In the New York tradition, the 10 slides are presented in reverse order, #10, #9, #8, #7, #6, #5, #4, #3, #2, and the Number 1 way to reduce your food cost:
It was tough to photograph the energetic crowd but the two photos below were taken in the middle of the floor. Every aisle had excellent traffic.
We had a great group attend the presentation "10 Ways to Reduce Your Food Cost Without Jeopardizing the Guest Experience" and I want to thank all the attendees.
In the New York tradition, the 10 slides are presented in reverse order, #10, #9, #8, #7, #6, #5, #4, #3, #2, and the Number 1 way to reduce your food cost:
It was tough to photograph the energetic crowd but the two photos below were taken in the middle of the floor. Every aisle had excellent traffic.
Selasa, 01 Februari 2011
Eliminate Fraud and Theft With Tight Food Cost Control
Thanks for your loyalty! This is the 300th post and I am happy to report annual readership has grown from 50,000 to over 70,000 readers. It takes a bad recession to get restaurateurs focused on cost control.
If you want to get down into the numbers, Paul Hewitt, CA has an excellent blog for Canadian Restaurant Owners. Paul's current post is the first in a series and the theme can help restaurateurs anywhere in the world. Check out Restaurant Fraud and Theft, Part I for a great look at ordering, purchasing, and my favorite, receiving issues. In my public speaking appearances, I frequently mention the missing truckload of eggs at the Syncrude operation in Northern Alberta. Locating this fraud was the key to my promotion at the time.
It is always possible for an individual to change from honest to dishonest if they stay too long in the same position. If you suspect a problem and you can't find a logical answer, you may have a thief or worse. I have argued over the years with owners who just could not be convinced a particular issue could only be explained by theft. Usually, there is a trusted employees with years of experience and a huge level of responsibility at the center of the theft ring.
Frequent unannounced inventories of specific items help isolate the problem. Check your POS data and invoices carefully. Look for major variations which can't be solved with minor portion control episodes and spoilage. Check the quality and sniff through protein stocks to eliminate the chance your operation is the garbage can for the delivery driver who has had a day of rejections on the way to your restaurant. This is a problem on long routes for the locations towards the end of the shift. It is a hidden form of fraud. You can be routinely sold food which has expired or will only last a day.
If you want to get down into the numbers, Paul Hewitt, CA has an excellent blog for Canadian Restaurant Owners. Paul's current post is the first in a series and the theme can help restaurateurs anywhere in the world. Check out Restaurant Fraud and Theft, Part I for a great look at ordering, purchasing, and my favorite, receiving issues. In my public speaking appearances, I frequently mention the missing truckload of eggs at the Syncrude operation in Northern Alberta. Locating this fraud was the key to my promotion at the time.
It is always possible for an individual to change from honest to dishonest if they stay too long in the same position. If you suspect a problem and you can't find a logical answer, you may have a thief or worse. I have argued over the years with owners who just could not be convinced a particular issue could only be explained by theft. Usually, there is a trusted employees with years of experience and a huge level of responsibility at the center of the theft ring.
Frequent unannounced inventories of specific items help isolate the problem. Check your POS data and invoices carefully. Look for major variations which can't be solved with minor portion control episodes and spoilage. Check the quality and sniff through protein stocks to eliminate the chance your operation is the garbage can for the delivery driver who has had a day of rejections on the way to your restaurant. This is a problem on long routes for the locations towards the end of the shift. It is a hidden form of fraud. You can be routinely sold food which has expired or will only last a day.
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