Tips & Tricks

The Economics of Foodservice Face Severe Pressures

The Economics of Foodservice Face Severe Pressures

As the debate about increasing the minimum wage rages on, foodservice operators are dealing with the realities of cutting costs. While the need to maintain a successful business is still the first priority, addressing minimum wage changes is just one more issue business owners face to keep labor costs under control.

Aside from raising the minimum wage, there are other factors that could cause an increase in the cost to employers in hiring a full-time worker. The Affordable Care Act requires employers to pay a certain amount for healthcare per employee, and the rise of beef and dairy prices has placed additional pressures on operational costs.

Foodservice operators have options to shoulder a higher payroll — not all of them pleasant. They can cut staff and subsequently focus on a higher efficiency and productivity of the remaining workers — they can hire more part-time employees and assign fewer hours; or operators can retain staffing levels and find other ways to cut costs within the business.

Cutting costs without dropping service quality is a difficult task. One technique is to evaluate current inventory and use of equipment and products. Some machines and processes may be outdated and inefficient, costing the business more in energy and labor than it is worth. Though replacing equipment may be costly upfront, the act could pay off long-term. Additionally, businesses can save money by installing energy-efficient lighting and adjusting thermostats to automatically save energy when the building is empty.

It’s particularly important to educate staff about the costs of doing business. Be transparent about bills, rent, vendors and even the price of small, often abused items, such as sugar packets, menus and napkins, to help staff understand. Staff can also help save money by properly measuring food items during prep, rather than eyeing the ingredients and potentially wasting a commodity.

Restaurants can also make changes to increase revenue from a customer-facing standpoint. For example, experts have identified menu engineering techniques to spotlight the highest-margin offerings to suggest to customers. Additionally, when there is an abundance of a certain food item or it is nearing expiration, have the chef create a special and instruct wait staff to promote it to customers, to avoid wasting that food, and ultimately, money.

Expense items such as paper towels and napkins can make a big impact on costs as well. The wrong products increase waste, labor and inventory, draining the budget. Having the right dispensing system is one proven way of cutting waste. The Tork Xpressnap napkin dispensing system guarantees a 25 percent reduction in paper usage through one-at-a-time dispensing. The dispensers are also equipped with a display panel ideal for tabletop marketing opportunities, such as showcasing a special menu item or a loyalty program.

As the pressure on the foodservice industry tightens amidst the minimum wage discussion, operators can control costs, save on labor expenses and reduce waste by implementing efficiency tactics and product solutions. As the change is poised for the near future, the foodservice industry must evaluate its current process and identify new techniques to maintain stability.’