The price of putting a meal on the table keeps going up, and that includes the tables at your restaurant, too. In fact, food prices are expected to rise beyond inflation for the next few years, according to the U.S. Agriculture Department. Add to that increased wages, equipment costs and other expenses, and small pizzeria chains, restaurants and commercial kitchens have a hard time making ends meet.
Combatting Increasing Food Costs
There are only two ways to combat declining margins: increase prices or reduce expenses. The better option is to control costs to minimize the impact on your customers so they’ll keep coming back. Some costs are more fixed, such as payroll, rent and utilities. But there are ways to reduce the amount you spend on wholesale pizza ingredients and other food items to improve your bottom line.
It’s good to first determine how much of your budget should be spent on the actual cost of your food inventory. As an industry standard, it should not exceed 28–30 percent of your gross food sales, add on an additional 2-3% for packaging costs(for items like boxes, sandwhich bags, and food containers). Trimming that number by even a few percentage points can make a significant impact in your business’ financial success. We’ve compiled some practical advice on how you can do just that:
Track Your Inventory
Tracking your food costs and inventory is the only way you’ll be able to realistically assess where you’re at. Daily tracking, especially of perishable items, can be a great way to determine why you may have had a soft month and allows you to see what has, or hasn’t, been selling like hotcakes. Weekly or monthly tracking can also help you see where to adjust the volume you order or tweak your menu. As part of doing inventory, be sure your stock is labeled so you can keep it rotated.
Some owner/operators select a food distributor when they open their restaurant and never give it another thought. Meanwhile, prices continue to climb unchecked. Consider bidding out your items to at least three distributors on an annual basis. Keeping a pulse on pricing changes helps put your mind at ease, knowing you’re still getting a good value.
Monitor Waste and Portion Control
That extra ounce of pizza sauce or that overly large handful of toppings adds up. Insist on precise measuring of ingredients to reduce the amount of ingredients you go through and ensure your customers get a consistent product every time. For example using a scale or cup to measure cheese, counting pepperoni slices and using specific sized scoops or ladels to easily dispense ingredients like sauce,onions, peppers, mushrooms and sausage. Consider monitoring wasteful practices like returned food, burned crusts, spilled sauces, etc. Put guidelines in place and educate your kitchen staff on how to avoid these types of expensive mistakes — perhaps even consider an incentive for a week with lower waste amounts.
Review Your Menu
Bigger is not always better when it comes to a restaurant menu. Don’t be afraid to remove items that aren’t selling well or to run specials featuring overstocked items. Involve your front-of-house staff. What are they hearing from patrons? They can help you monitor what items are hot and which ones might need to be retired. Also talk with them about what dishes they should recommend, especially those containing ingredients that may be close to expiration. Consider seasonal menus, too. Are customers ordering a specific item more during the summer months? If so, why not offer a “limited time only” section on your menu?
You are not alone. In fact, there are likely many other restaurants in the area that are trying to reduce food costs, too. It might make sense to join a purchasing group and reap the benefits of purchasing in greater volume. If you’ve got the space to accommodate more nonperishable inventory, ask your food distributor if there are volume discounts. Or maybe you can get by with one less delivery a week so your rep can offer better pricing as a result.
Small improvements can make a big impact when it comes to controlling food costs — and there are plenty of things to try before raising menu prices. Follow these practices to continue offering your patrons the great food they expect at a price they can afford.
Need help tracking ingredients, costs and margins? We’ve designed an easy-to-use, interactive Pizza Ingredients & Costs Calculator to do just that. Get your free copy by clicking the button below.