Restaurant Food Costs: How To Lower Your Food Costs

Foodservice worker adjusting food dishes on a table

Restaurant food costs are rising and grocery shoppers aren’t the only ones feeling the sting of a 10.4% increase over the last year. The average restaurant profit margin is 3-5%, and high prices force restaurant owners to make tough decisions or risk raising prices themselves. It’s never been more important to cut costs while you can, but how can you without affecting the price or quality of your dishes?

Track your assets

The first step toward savings is to track your inventory. Knowing your in-stock amounts can save you from overbuying one item or underbuying another. If spreadsheets and ledgers are a headache for you, there are various apps and software systems to help you do this in a quick and efficient manner. Even simple inventory scales are a good start to helping you track how much of what you have left.

The second step to asset tracking is noting cost variance. Restaurant food costs fluctuate, and knowing when something as simple as lentils dips below or above their average price can help you shop smarter and save more over a year of purchases.

Minimize waste

Half eaten steak left on dishes

When food goes bad or gets thrown away, you’re tossing your profits away with it. When you focus on minimizing food waste, what you’re really doing is maximizing your investment.

You can achieve this by tracking both portion sizes and incorrect orders made by your kitchen. Portions that go uneaten could have been better served in other orders, and knowing how much food you lose through overserving or incorrect cooking is essential to knowing how you can address the issue.

But good food isn’t the only kind that ends up in the garbage. Spoiled food from improper storage or bulk purchasing can put a hole in your pocket as well. To avoid spoilage and extend the shelf-life of your produce, use proper storage containers and track purchase dates with accurate labels on your units.

Let your money talk

Do you know your profit margins for each dish? You should! Knowing how much an order costs is critical to determining not just how much you should charge, but if it should remain on your menu at all.

Instead of offering pages worth of dishes to choose from, try limiting your menu to tasty favorites that simultaneously boost your profit margins whenever they’re ordered. You can then use the popularity of your dishes to forecast sales and plan for the future.

To further your purchasing, consider joining a purchasing group. Due to the volume of purchases made via purchasing groups, food suppliers offer significantly lower prices. When you buy together, everyone wins! 
By saving money today, you can ensure your doors will open tomorrow. Running a business is hard, but by tracking your assets, wasting less food, and knowing your profit margins, you can breathe easier and increase your profits.

Be sure to save on your equipment, smallwares, and parts as well by shopping at www.etundra.com today.

About Nik Heimach

Nik is the sr. copywriter at TundraFMP. He specializes in narrative branding and creating the meaning behind a message. Between writing and delightfully raging against the dying of the light, Nik loves obscure movie quotes, Shrek, piña coladas and getting caught in the rain.

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