As we approach fall and there is a chill in the air, many restaurants shift from the lighter fare of fresh salads, fruits and vegetables of summer to fall comfort foods of hearty soups, heavier dishes and chili. From Oktoberfest to “ Our New Fall Menu”
, restaurants switch it up to keep clients coming back for more. But can the change in season also impact your bottom line?
Since we work with so many restaurants, we’ve invited Restaurant Consultants, Sofranko Advisory Group as our guest blogger to share tips on how to control food costs when menus change. Sofranko advises restaurants to evaluate menu costs on a regular basis. Restaurants typically will lose money if they fail to do this every three months. Knowing what the product costs are will help price the product accordingly.
Food costs are the largest expense item on your profit and loss statement. When creating new menus portion control and developing a standard cost per ingredient will help restaurants maintain a solid profit margin.
Here are some things to consider as your supply costs increase:
Profitability. You must know what your costs are to price your product to maintain a profit margin. Over time supply costs can fluctuate so it’s important to fluctuate your menu prices with them, if necessary.
Competition. Your profit margin is consumed as costs increase forcing you to possibly raise your prices. While raising your prices is an option, customers will only tolerate so much before deciding to go elsewhere. Knowing where your competition is positioned can help you make better decisions on what adjustments you need to make.
Recipe changes:Instead of increasing prices or reducing portions perhaps a recipe change can help you control costs while still delivering a high quality product. Ask yourself can you replace a higher cost ingredient with a lower cost ingredient as an alternative.
Product sourcing:Where you choose to source your ingredients is another important factor in product costs. Avoid putting all of your eggs in one basket and seek out various purveyors so you can compare costs and possibly negotiate discounts.
Regular and thorough inventory counts will help you stay in control of your usage and the costs associated with particular dishes.
The bottom line for restaurant owners is this….check menus and costs every three months, understand the unit cost for each ingredient in a recipe, use measurements to ensure portion control and have an inventory system in place to prevent loss or theft. Controlling food costs can make or break your business.
Guest Blog by Restaurant Consultants, Sofranko Advisory Group: