Managing Food Cost – Restaurant Sales Mistakes
Using the New 40 Thieves of Food Cost as a guide, this article is part 7 in a series on food cost control and focuses on common POS restaurant sales mistakes. A professional, well-managed, properly trained waitstaff will help improve your bottom line and make your restaurant more successful. Conversely, an undisciplined, unmoderated, or poorly managed waitstaff can cost you tons of money. Here is what the 40 Thieves of Food Cost have to say about possible food cost problems which relate to menu item sales.
Restaurant Sales Mistakes
- Unrecorded sales: “no charge” or cash not turned in, unauthorized comps to friends/family/regulars
- “Open food” abuses (get rid of this key if possible! Or allow only with mgr approval)
- No tracking of “comps” and giveaways
- No tracking of re-fires, waitstaff/cook errors
- No sales records to detect trends
- Poor pricing of menu items
- Incorrect pricing keyed into your register system (Micros, etc.)
- Poor sales mix
- Employee meal costs – over production or unauthorized meals
- Not running specials on items that were overproduced
- No credit for marketing events
There are a number of ways which a server may deliver food to customers, friends, family, etc. without you receiving the money. First, you must keep track of all sales a server makes per shift and reconcile their balance at the end of the shift. This should include a way to track all credit card sales, cash sales, food cops or credits, and so on. Make it impossible for them to ring in an order to the kitchen and then pocket the cash if the guest pays with cash only. The only way to do this is to reconcile all their sales for the shift.
Unless you implicitly trust your servers then do not allow them to issue food comps to their guests. It’s better to run all comps through a supervisor or manager. Remember that servers are tempted to be extra nice to a guest in order to pump up their tips, so giving them a comp for the slightest reason, or no reason at all, is certainly an incentive to the server to increase their tips at your expense. All comps should be controlled through management.
No Ticket No Food
Another way to manage restaurant sales mistakes is to control illegitimate food sales or unauthorized comps is to mandate that the kitchen will produce nothing without a ticket from the server. Once it is wrong in through the POS system you have documentation of the transaction and it makes it much easier to hold them accountable and to verify all transactions and food sales.
Your POS system should also be set up with special keys for comps, re-fires, and any discounts or giveaways that you allow.
You should not allow server or kitchen mistakes to be eaten by the staff. It’s too easy for one of them to pretend to make a mistake simply because they want a free meal. Also, track misfires/re-fires by server to see if one of them needs additional training or has suspicious transactions.
Open Food Abuses
Seriously, if you can get rid of the open food button you will be better off! I understand that many establishments need the flexibility to ring in an unusual food item. However, it is extremely easy to abuse the open food button. Ring in a fillet mignon open food for $5 dollars! At the very least, verify all open food charges by the server, or make it so that only a supervisor or manager can authorize an open food charge.
Comps and Giveaways
All comps and giveaways should be rung in using a comp key in your POS system so that you can keep track of them and be aware of their impact upon your food cost. All comps should be issued only by a manager.
Similarly, misfires and re-fires should use a specific POS key so you can keep track of them, their impact upon your financials, and tractability to specific servers. Associating kitchen errors to specific cooks is useful if you are able to track that as well.
Tracking Sales Trends
Do you know what your top sellers are? How about the worst sellers? Do you review this information on a regular basis… monthly, quarterly, etc? Do you use this information to modify item placements on your menu using the concepts of menu engineering and the way that the eye moves around your menu? How do your trends change with the seasons?
Poor Pricing of Menu Items
Know your menu item food cost percentages, margins, and popularity or percentage of sales. Knowing these 3 metrics will help you make intelligent decisions about raising or lowering menu prices on any given item.
Poor pricing of menu items can take a variety of forms. Sometimes it is about food cost percentage and making sure that you’re not selling it for too cheap. But that’s not always the case as a section on sales mix points out because a high margin can offset a high food cost and net more money to the bottom line.
Another thing to look at is if your top selling one or two items are huge sellers then perhaps it’s time to kick the price up a little bit. It’s always worth testing a little price bump on an exceptional selling item to see if it impacts sales in a negative fashion or not. Just don’t bump it up to high all at once.
If your menu items are completely based upon food cost percentage then you could also be missing out on sales. You really don’t want to run your lobster and a 25% food cost because he just won’t sell them. Even had a 50% food cost your margin will often be better than any other menu item and therefore it’s worth selling at the worst food cost.
Incorrect POS Prices
Many restaurant sales mistakes happen through the POS system! Double check and confirm that the prices plugged into your POS system are the correct sales prices for each item. This should be done at least quarterly as prices and costs may change with the seasons. Also, just because you fixed a POS or menu issue last year doesn’t mean that it is fixed forever! And be sure to follow up with your service staff to be sure that the correct keys are being used by them for each menu item. Sometimes the key which you intend them to use is not the key they’re actually using. This is especially true for new menu items.
Also check to see if some of the keys are confusing for either the waitstaff or the kitchen. The waitstaff may consistently use the wrong key because it is too similar to another dish. Or the way the ticket prints in the kitchen may cause confusion and a misfire may be reoccurring.
Regardless of whether or not you have an employee meal program, your employees will avail themselves of your food. Be sure they understand exactly what it’s OK for them to have and what is not OK. If you allow employee meals then be sure you track it and are aware of its impact upon your food cost.
Also be sure that you take control of it and don’t let them just have whatever they want. Always know the actual cost of the food which you are allowing them to have for employee meals. Some operations will track this as an HR benefit or some other employee benefit and not as an actual line item against your food cost.
No Credit for Marketing Events
If you do any marketing events such as food and wine dinners, food shows that are offsite, or any other unusual marketing event, be sure to keep track of the cost associated with it, especially if there is no sales associated with it. If you do not have A separate line item in your PNL statement for marketing events, you will at least want to know the direct impact in dollars to your food cost percentage. Track it separately in an Excel program if you need to so when you go to your P&L meeting you can explain what impact those events had on your P&L for that month.