Restaurant News Resource - Dunbar Associates News

Joe Dunbar's thoughts on the restaurant industry's outlook for 2012

Joe Dunbar answers a reader's Food Cost Control Software Question

Joe Dunbar answers a reader's Food Cost Question

A 10% rise in your invoices will cost you 3.5% of sales at a 35% previous food cost level.

As 2011 gets in gear, we find the stock market rising despite rapid increases in many key commodities. They are throwing the term stagflation around on the financial shows and websites. some economists don't see any reason to believe we are in danger of rising prices and unemployment. They cite improvements in the US job market.

I recommend allowing for expected trim loss in your recipe costing and menu item pricing formulas. The allowance for an acceptable level of spoilage may be added if your menu varies and your customers expect to pay a higher price. It is not as easy to pass along the cost of spoilage in this economy. Value conscious guests may look elsewhere if they feel your prices are too high.

The economy continues to make a slow but somewhat steady bounce off the canvas. With people paying down credit card debt and buying with cash instead of debt, we can expect the consumer to remain value conscious. Employment statistics mask the true unemployment which is higher than 10%. Still we see employers ready to hire in 2011. Most businesses run lean and mean and hiring will be modest.

If I were preparing a budget for 2011 today, I would take a look at the period from September 1, 2009 to August 31, 2010. Using this full year, I would budget for the exact same baseline sales in 2011. Rather than budgeting 10% growth, my conservative numbers would help me to better allocate the company resources.

Certainly, most restaurants use food cost as a % of sales as a key performance indicator. This week, an anonymous reader asked about tracking food cost in a different environment - a health care facility. He asked if it was advisable to use cost per patient per day in lieu of a percentage. I strongly recommend using the cost per patient day over a percentage benchmark.

The number one decision in managing your Sunday Brunch operation is the size of the staff for a given forecast. The staffing should include one or more people at the host stand. If your patrons know each other, you should consider seating people close to one another by opening zones in your dining room. Dining patrons will tend to spend more time in conversations thereby giving their digestive system ample time to send the 'I'm full!' signal.