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Offset rising staff costs with menu, purchasing and inventory excellence

Posted By Fourth , 10 October 2019

Staff costs are often the biggest expense of any hospitality business – one that has risen and risen over the last few years. According to the UKHospitality Christie & Co Benchmarking Report at the end of last year, payroll costs stood at 29.4% of turnover, an increase of 1.5 percentage points from the year before.

Obviously businesses are looking at ways to help reduce these costs through things like better forecasting, smarter schedules and employee retention. But savvy operators are now also turning their attention to the product side of the business to help offset some of these costs – by optimising menus, purchasing processes and inventory management.

Maintaining menu profitability
  • Know your sales trends. Get visibility into what is selling and what isn’t. Combine this data with the profitability of your dishes and this will 
  • you decide which items to keep on your menu, which should be removed and where tweaks can be made. 
  • Develop a single set of master data. This should include supplier catalogues and pricing so you can keep on top of exactly what each recipe costs, and adjust accordingly. This information should also flow into your purchasing system so everything is accurate and up-to-date.
  • See the impact of changes. If one ingredient in a recipe is swapped for a cheaper alternative, how does that impact the popularity of the dish? With analytics you can see how these changes affect the performance of the menu item.
  •  Let technology help you manage the process. Trying to manage all of this information manually results in errors, out-of-date prices and large, unwieldy spreadsheets that make the whole process less effective.




Optimising purchasing
  • Trade electronically. Information from suppliers can be uploaded into the system to make sure everything is correct and in the right place. You can place orders electronically, and also get update messages from suppliers on the status of orders, so you know exactly what’s coming from where.
  • Enforce supplier lists and delivery schedules. Lock down supplier lists so sites can only purchase from approved suppliers. Establish routing delivery systems to reduce costly ad-hoc purchases.
  • Manage invoices by exception. With 3-way auto-matching of the invoice, the original order and the goods received note, you can focus only on those invoices that have an issue – reducing admin time
Managing inventory
  • Start tracking waste. By getting a good understanding of exactly what food is being wasted and why, you can identify the issues and see where savings can be made. If a dish on your menu is regularly unfinished by customers, maybe the portion size is too big. And if an ingredient is often thrown away because it’s going past its expiration date, then you’re probably ordering too much.
  • Eliminate paper. Use mobile technology to get rid of paper from the inventory management process. With manual systems, it’s easy for errors to creep in which take more time to resolve.







For more detail on how to offset rising staff costs with optimised menus, purchasing and inventory, download our complimentary white paper here.


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