{"id":3505,"date":"2017-12-22T10:08:02","date_gmt":"2017-12-22T18:08:02","guid":{"rendered":"http:\/\/sintelsystemspos.com\/?p=3505"},"modified":"2017-12-22T10:08:02","modified_gmt":"2017-12-22T18:08:02","slug":"cost-cutting-in-restaurants","status":"publish","type":"post","link":"https:\/\/sintelsystemspos.com\/ru\/cost-cutting-in-restaurants\/","title":{"rendered":"Cost Cutting in Restaurants"},"content":{"rendered":"

\u0418\u0437\u0432\u0438\u043d\u0438\u0442\u0435, \u044d\u0442\u043e\u0442 \u0442\u0435\u0445\u0442 \u0434\u043e\u0441\u0442\u0443\u043f\u0435\u043d \u0442\u043e\u043b\u044c\u043a\u043e \u0432 “English<\/a>”. For the sake of viewer convenience, the content is shown below in the alternative language. You may click the link to switch the active language.<\/p>

<\/p>\n

To learn how Sintel Systems can help your full service restaurant<\/a> or QSR \/ fast food<\/a> outfit streamline operations, contact us<\/a> today to speak with a specialist or arrange a live online demo.<\/p>\n

How to Cut Costs<\/strong><\/p>\n

Restaurants are known for their razor-thin profit margins. That notion holds particularly true among affordable fast-casual and quick-service concepts. Add on pressures like rising real estate costs, unpredictable food prices, and minimum-wage hikes across the country, and operators are left with even less of a financial safety net.<\/p>\n

In this climate, every penny counts. And restaurateurs are continually re-examining every part of the business, including their ingredients, labor schedules, and food packaging in order to maximize return. As reported on QSRMagazine.com:<\/p>\n

Rethink ingredients<\/strong><\/p>\n

Consumers are more health-conscious than ever. They want to know where their food comes from, and they\u2019re flocking to scratch-cooked, health-forward, and farm-to-table offerings.<\/p>\n

Those trends can add new layers of complexity to a restaurant\u2019s bottom line, says Wade Winters, vice president of supply chain at purchasing partner Consolidated Concepts.<\/p>\n

Scratch ingredients may come with a lower upfront price tag, but the manpower required to break them down in-house can add up quickly. For that reason, Winters is a proponent of pre-portioned, processed foods, which he says can cut down costly staff time while still maintaining high-quality standards.<\/p>\n

Take the chicken breast, for example. An operator might want to tout that its birds are broken down in-house. But a prepared chicken breast from a processor cuts down trimming waste, frees up staff time, and can ensure product consistency that is otherwise difficult to replicate across multiple units.<\/p>\n

\u201cAre you getting credit for trimming a random chicken breast?\u201d Winters says. \u201cDoes the customer really know, and do they care?\u201d<\/p>\n

The same logic holds true for produce options like pre-diced onions or shredded carrots, he says. In some cases, it may even be advantageous to add multiple SKUs of similar products\u2014a pre-sliced chicken breast for salads and a whole breast for sandwiches, for instance. Such options may cost a few pennies more on invoices but could save labor dollars by eliminating on-the-clock work.<\/p>\n

Winters says technological advancements have improved the quality of frozen and pro-<\/p>\n

cessed ingredients in recent years. A processed chicken breast, for instance, might come marinated in an all-natural solution of water and sea salt that tastes just as good or better than a raw piece of meat prepared on site.<\/p>\n

\u201cThat provides very low waste and significantly reduces labor,\u201d he says. \u201cIt provides a consistent product, too.\u201d<\/p>\n

Winters says the key is understanding the relationship between supplies coming in and the associated labor costs needed to transform them into meals for customers. Many restaurants aren\u2019t there yet, but Winters believes it\u2019s an easy sell once operators realize the potential labor savings.<\/p>\n

\u201cIf you can reduce enough of the processes\u2014the actual back-of-house processes, where you can eliminate one person\u2014that gets their attention,\u201d he says. \u201cBut there are so many other benefits of getting something that\u2019s produced to some extent from a third-party manufacturer: that consistency of product, better yield, the fact that there\u2019s probably more cost stability associated with it.\u201d<\/p>\n

Watch every penny\u2014constantly<\/strong><\/p>\n

Sometimes you\u2019ve got to spend money to save money.<\/p>\n

That\u2019s what 105-unit Capriotti\u2019s did with a system-wide upgrade of its POS system. The addition of NCR Back Office has integrated inventory management, recipes, and sales data with store schedules and labor costs.<\/p>\n

Capriotti\u2019s chief development officer David Bloom says everything about the restaurant business has grown more complicated in recent years. Complex labor regulations and innovations like third-party delivery require deep financial analysis. An old-school reliance on instinct won\u2019t cut it, Bloom says.<\/p>\n

\u201cI\u2019d say a lot of restaurateurs actually don\u2019t take the time and energy to keep updated financial reports,\u201d he says. \u201cYou\u2019d be amazed at how many restaurateurs just look at their bank account versus actually running a financial statement and diving into it. That used to work. But, unfortunately, it just doesn\u2019t work anymore.\u201d<\/p>\n

Capriotti\u2019s software creates an ideal labor schedule using manager parameters and provides regular updates of overages and actual time clocked. It also keeps watch on overtime issues and tracks part-time employees who approach 30 hours per week\u2014the federal threshold for requiring employee health insurance. The system is also vigilant about tracking food costs, overages, and waste for the sandwich concept.<\/p>\n

\u201cI can tell you not just your food cost is high, but specifically I can say which meats or cheeses are high,\u201d Bloom says. \u201cI can say my turkey sandwiches are high, I must be putting too much meat on the turkey sandwich. So you can be very, very specific in finding problems.\u201d<\/p>\n

Combined across the system, the store-level data can pinpoint problems with individual operations. Sometimes, fixes are as simple as ensuring franchisees leverage the chain\u2019s existing national contracts with suppliers, rather than purchasing product from local, more expensive providers.<\/p>\n

Bloom says franchisees often lack the time or expertise to analyze their financial data in-house. That\u2019s why corporate invested in the system itself and performs regular, in-depth financial reviews of franchisee operations. Bloom says the franchisor performs this service at no cost to operators.<\/p>\n

\u201cWe don\u2019t make any extra money doing that. Our royalty is completely based on the topline,\u201d he says. \u201cThey certainly understand the time we\u2019re investing with them to improve their bottom line is strictly for them. Now, the argument could be made that in the long run it helps us because healthy franchisees are growing franchisees.\u201d<\/p>\n

Focus on saving, not just cutting<\/strong><\/p>\n

Mike Charvat, senior vice president of operations at Grill Concepts Inc., says the third-party operator of hotel restaurants has labored to think more holistically about its store budgets.<\/p>\n

\u201cInstead of cost cutting, we\u2019re looking at cost savings generally and better spending,\u201d he says. \u201cIt\u2019s really getting ahead with a plan. At the end of the month, it\u2019s really too late to do anything about it.\u201d<\/p>\n

Grill Concepts operates full-service restaurants and the quick serve In Short Order Daily Grill in the lobby of the Sheraton Seattle Hotel. Charvat says the company\u2019s fiscal approach doesn\u2019t differ between its full-service and quick-service concepts. Both segments of the industry require disciplined inventory management and long-term planning.<\/p>\n

\u201cThe margins are generally the same,\u201d he says, \u201cbut it\u2019s different food price and check averages.\u201d<\/p>\n

With its unique operation inside hotels, the company\u2019s restaurants receive one key forecasting tool that most other operators don\u2019t have the luxury of using: hotel occupancy numbers that can help predict traffic. That makes scheduling and inventory management much more precise.<\/p>\n

Much of the cost-control strategy for Grill Concepts relies on separating short-term expenses from the long-term financial health of operations. For example, the company is heavily focusing on manager recruitment and retention with hopes that more emphasis there will pay off in the long run.<\/p>\n

\u201cIf we can reduce turnover by 25 percent, that\u2019s a huge savings,\u201d Charvat says. \u201cWe cut down on recruiting expenses and ads.\u201d<\/p>\n

Some brands might choose to trim training programs to save cash. But Charvat views such moves as shortsighted. Grill Concepts is re-examining perks and benefits packages in an effort to create long-term stability in its management ranks.<\/p>\n

\u201cPeople are always fighting over people in this business. It\u2019s really wanting to retain them and wanting them to not talk to other [employers],\u201d he says. \u201cWe think it\u2019s going to lead to better retention and higher morale. We want to be the employer of choice in the restaurant business. There\u2019s so much competition out there.\u201d<\/p>\n

Design on a budget<\/strong><\/p>\n

Restaurants have many tools at their disposal to trim costs and adjust budgets. But when it comes to real estate, operators have limited flexibility.<\/p>\n

Miguel Vicens, a creative director at Coev\u00e1l Studio, a Dallas branding and design firm specializing in restaurants, says the strength of today\u2019s real estate market means restaurateurs have to pony up for the space and locations they desire.<\/p>\n

\u201cLandlords and property owners these days don\u2019t have to settle for anything,\u201d he says. \u201cSo I don\u2019t think there\u2019s a ton of negotiation.\u201d<\/p>\n

But operators do have budgetary leeway when it comes to all the finishes that go into transforming an empty box into a restaurant. Vicens says there are many ways to achieve a high-design look without spending a fortune.<\/p>\n

For example, instead of using reclaimed wood for a counter or bar top, the company has found that hardwood floors can achieve a similar effe ct at a fraction of the cost.<\/p>\n

Some restaurateurs may be drawn to the modern, institutional aesthetic of shiny metals and subway tiles that have grown to dominate the fast-casual space. But Vicens says that look is tired. And even operators on tight budgets can create a distinct space.<\/p>\n

\u201cYou do save some money leaving spaces as bare as possible,\u201d he says. \u201cBut the problem is you fall into that trend. Does it look like a trendy coffee shop or does it look like an actual restaurant?\u201d<\/p>\n

When budgets get lean, operators should cut from the restrooms first, Vicens says. Tile costs vary widely and are an easy downgrade to realize savings. And when shopping for locations, it\u2019s always cheaper to find a space that previously housed a restaurant because of the existing kitchen equipment and electrical and plumbing fixtures.<\/p>\n

For multiunit operators, Vicens recommends maintaining consistency of finishes. But he says operators should seek to define each location with one unique piece of artwork. Coev\u00e1l Studio likes using vinyl or mosaic to build a signature piece that will prove Instagram-worthy to diners.<\/p>\n

\u201cYou can have 20 units and they all have a different Instagram moment or Instagram wall,\u201d he says. \u201cThey describe where you are.\u201d<\/p>\n

Watch what goes in the dumpster<\/strong><\/p>\n

One of the easiest ways to identify fiscal waste is to examine the physical waste.<\/p>\n

Dumpsters offer a glimpse into a restaurant\u2019s spending patterns. And they\u2019re frequent culprits in overspending.<\/p>\n

\u201cYou normally wouldn\u2019t think about it,\u201d says Geoff Aardsma, vice president of client service for Enevo, which provides waste, recycling, and analytics services. \u201cAll you\u2019re seeing is that small bill, but it really touches almost every part of a restaurant\u2019s operation.\u201d<\/p>\n

Aardsma points out that trash trucks cause parking lot wear and tear and can interrupt drivers looking to get in and out during a lunch rush. Scheduling too many pickups is akin to over-ordering produce. And scheduling too few means on-the-clock workers have to go out back and deal with the headache of overflowing garbage.<\/p>\n

Enevo deploys dumpster sensors to monitor waste generation and pickup schedules. The company says it can save restaurants as much as 15 percent by managing waste pickup. Aside from outsourcing waste removal services, Aardsma says, restaurants should explore recycling opportunities to reduce the cost of cardboard and other materials going to landfills. Enovo has also worked with some suppliers to switch to reusable crates that cut back staff time and keep empty boxes out of the dumpster.<\/p>\n

\u201cIn the quick-service space, it\u2019s really about supply chain management and the packaging of materials being delivered to the restaurant,\u201d he says. \u201cThere\u2019s kind of a hidden cost of supply chain, and that\u2019s the waste that occurs from packaging of supplies sent to you.\u201d<\/p>\n

Don\u2019t go overboard<\/strong><\/p>\n

Andrew Gruel likes to call himself \u201cthe garbage man.\u201d<\/p>\n

\u201cI go into the garbage cans,\u201d says the founder and CEO of Slapfish. \u201cAnd I\u2019m serious. It\u2019s really that simple. You find patterns.\u201d<\/p>\n

Scouring through the garbage of his fast-casual seafood concept, Gruel has found tangible savings. When he finds too many french fries in the trash, he knows the kitchen is over-preparing. Finding 3-inch-long scraps of carrot, he knows the prep cooks are wasting valuable produce.<\/p>\n

While he sweats the details, Gruel says his fanaticism goes only so far; he is careful not to make cost-cutting changes that affect quality.<\/p>\n

For instance, he\u2019s worried about the skyrocketing price of avocados. Slapfish serves a house-made guacamole on some of its sandwiches. A cheaper, pressed avocado product is available, but Gruel says customers would notice an obvious departure like that.<\/p>\n

\u201cI look at what effect that has overall on the brand,\u201d he says. \u201cLet\u2019s say we do it, serve 1,000 a week, and save a nickel on each one; it\u2019s just not worth it.\u201d<\/p>\n

Instead, he\u2019s made other changes that customers hardly notice. Some even add to the charm.<\/p>\n

Packaging is intentionally barebones. Fish and chips are wrapped in newspaper, and to-go orders are packaged in brown paper bags, an aesthetic that Gruel calls an homage to the simple packaging served at Five Guys.<\/p>\n

The same goes for the design, which is dominated by inexpensive choices like simple concrete floors and timeless subway tile. Menus are written on chalkboards and butcher paper, rather than pricey digital menuboards.<\/p>\n

\u201cI don\u2019t need an interior designer to come in and tell me about some centerpiece,\u201d Gruel says. \u201cWe want people to come in and not expect much from the design and think, \u2018Wow, I\u2019m impressed by the food. I wasn\u2019t expecting that.\u2019\u201d<\/p>\n

With marketing, the company relies mainly on free or cheap social media marketing to lure diners in. And Gruel has built a menu that is intentionally malleable. Instead of Mahi tacos, the menu calls for fish tacos, allowing the restaurant to swap out different types of fish as market prices fluctuate.<\/p>\n

\u201cIt has to be built into the design of the food menu,\u201d Gruel says. \u201cWe call it \u2018Choose the dish, not the fish.\u2019 People come to us for our over-the-top fish sandwich, not our Mahi sandwich.\u201d<\/p>\n

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