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Costs are on the Upswing

Food costs are rising. Demand exceeds supply. The manufacturers are taking advantage of the situation. Fuel to transport the product is through the roof.

Labor costs are rising. More money per hour goes to staff members. Management salaries require annual increases. Labor taxes are not going down. And benefits provided are now seen as points of difference for better companies.

The question is posed: How do we combat these increases in a cost efficient manner? We have budgets and only so many resources to combat cost escalation.

So how about this for part of the answer? Increase sales by 3%-5%!! Approximately 40% of any sales increases fall to the bottom line. This definitely would assist in compensating for cost increases. And furthermore I am going to give you a proven vehicle to do this with no additional cost to you, the operator.

The plan is fairly simple: increase your guest check. Pay more attention to guest needs and desires. Offer them options. Suggest items that may enhance their experience. Over the years we have done hundreds of shoppers. I’d say in 80% of the cases the server did not offer beverages, starters/appetizers and/or desserts. Unimaginable, especially with all of the investment in training and management. I don’t get it. Do you?

If the guest check average is $20 which is about how much casual dining restaurants are averaging then a 3%-5% increase is $.60 to $1. Does this seem difficult to do? I think it is a matter of making it a priority and following through upon this initiative.

The steps:

• Determine the GCA for each staff member over the last 30 days.
• Have a service staff meeting to explain what you are trying to accomplish (raise the sales) and why you are doing this (to combat price increases).
• Ask for cooperation on their part. Explain what is in it for them: enhanced job security via higher sales and profits to the restaurant, more revenue to them in the form of increased tips and probably a higher incidence of repeat business because of the higher level of service. Service and repeat business seem to go hand in hand.
• Set/negotiate goals for each person with their buy-in.
• Training using method-role playing is very effective.
• Monitor results by the shift and period.
• Set new personal bests for the next period.
• Management's role:
• Keep the focus, energy and spirit going.
• Coach and encourage on a shift-by-shift basis.
• Track the results daily and discuss with each staff member daily.
• Make it fun.
• Discuss ways to enhance sales with staff.
  

I'm going to do this with several of my accounts to prove the point of the increase and will pass on the results.

If you need a hand on implementing this we are glad to help you. Please contact us.

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