How to Cut Food Cost in a Restaurant

With the economy in the mess its in. Here is my way to cut food cost in a restaurant kitchen. It all boils down to numbers. The big numbers game.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• 2-3 months of Sales Report for the week and month.
• 2-3 months Inventory sheets for the week and month
• Calculator
• Pencil

1. Print out your inventory and sales reports and have them ready.
   Sit at your desk or table so you won't be distracted.

2. Now go through your sales reports. See the items that are not selling and circle them.

3. Now compare your inventory with the items you have circled.
   If you have an abundance of the item you may need to cut back on the inventory for the products.
   
   ex: Let say you have Fillet Mignon on your menu. You were selling 50-75 a week. Now the economy has turned sour and people are not eating them. Now you are selling 20-25 a week. But you are still buying for 50-75 a week. Cut back on the purchase of the product until times are better. On the inventory = 30-50 extra fillets on hand. That adds up to alot on the inventory.

4. So are you seeing the picture yet. This was an example of 1 product. What restaurant has 1 item on the menu. None that I know of.

5. Now compare the rest of your food items on hand with the sales report.
   Is there items that you have alot of product. Cut back on the on-hand inventory.

6. Ask your purveyor if you my purchase the products in smaller quantities. Some company's will allow partial boxes or by the piece.

7. I know we all have our loyal purveyors. Shop around. EX: Would you purchase food for your home at full cost if another store has lower prices at the same quality.

8. Now look at the total weekly/monthly food cost. What is it 45-55%,(that is $10,000 in product). If so, that is way to high for the time right now. Look at your sales and purchases.
   
   Lower the on-hand in the kitchen and follow the next step.

9. Now that you have lowered the inventory. Figure out your food cost % you desire.
   Ex.: Lets say you have $25,000 a week in food sales and you want a 30% food cost weekly. That is $7500. That is all your purchases and final inventory for the week.
   So $ 7500 - $2000 final inventory = $5500. If your inventory is down to 2000, that means you have 5500 in product you can use that week.That is not saying purchase $5500 worth of product. You have to consider how much of the inventory product you will use. So at the end of the week you only want to use $5500 worth of product and keep $2000 inventory.
   
   You have $750 extra product and $200 in misc. on-hand product you will use for the week. That brings the need to purchase to $6450.
   7500-2000=5500 +950 =6450

10. You have $6450 to spend for the week. If you now lower the on-hand product more, lets say $500. That will now lower your on hand product to 1500 = 5950
    
    So now budget your self on spending $5050 on purchases.
    before after
    purveyor1= $5000 wk. 2500
    purveyor2= $3000 wk. 1500
    purveyor3= $1600 wk. 800
    purveyor4= $400 wk. 200
    
    This will allow $1450 for spending over. If you can lower your on-hand inventory you can reduce your food cost even more. Remember it is all about the numbers. This will not happen over night so be patient. It may take a weeks or months to lower you on-hand inventory.

Tips & Warnings

• It all about the numbers. Lower your on-hand and purchase product and you will lower your food cost %.