Specialist kitchen consultant Paul Rifkin discusses foodservice profitability in the current environment, and beyond.
Over the past six months I have consulted with many clubs and pubs – both regional and in the city. The one common theme is that they are all being challenged with foodservice profitability.
Profitability is such a flexible word, as it can mean different things to different operators. For some “break even” is the goal, whilst for others an ‘acceptable loss’ is ok. A growing number of venues are starting to only accept a positive result, with a set budgeted percentage; this must be seen as an achievable outcome for all, eventually.
Until you treat the catering business as a business, this focus will be harder to home in on.
There are so many variables that affect the ability to achieve profit, but all relate to a lack of effective control over costs across catering.
Labour is a constantly growing area, with a whole set of its own challenges regarding staff costs. Cost of Goods has been taken on a roller coaster over the past six months, with sharp rises followed by constantly fluctuating availability and pricing.
Effective costing of menu items is rarer than most managers believe! Simple things from pre-COVID, such as sticking to a certain brand, have become more fluid. Changing brands will often vary other things required, as ‘apples ain’t apples’ anymore.
For example, different brands of chips will cook at different rates and use more, or less, oil in the process. Coatings on some brands are thicker than others, affecting the customer experience and quality served.
Even the humble pork belly is priced from $12 to $22, depending on availability and suppliers, and the yield difference can be greater than the price differential. The one constant that I observe is that many menus are just too extensive. I’ll say that again, many menus are too large to be profitable. How is that so, I hear you ask?
In a nutshell, the larger the menu, the more prep is required. The more prep required; the more labour needed to stock the menu.
One thing I see often is the dreaded ’out of stock’ menu item. The cause is nearly always due to not enough time to prep all the menu items. More concerning is when this starts to happen within 30 minutes of the start of service, and many times service starts with items not available.
A review of all sales will quickly identify the items that sell – versus those that “have to be on the menu” because …
Tuning your menu to ensure items sell evenly will greatly reduce:
- waste from lack of sales, and
- labour to produce items that simply don’t sell
Remember, you can always add specials to boost the menu variety, at least this can be adjusted daily to match daily available labour.
Engaging the services of a professional consultant will provide a path to follow.
Paul Rifkin