Guest post from Dining Alliance
According to the National Restaurant Association, sales at restaurants hit more than $825 billion in 2018. But, as restaurateurs know, very few of those revenue dollars actually translate into profit for independent restaurants. Restaurant margins are notoriously slim, but there are ways to find savings that don’t compromise your food quality or put your team at risk.
Whether it is discovering new ways to improve upon your scratch kitchen concepts or buying the right tomato for your burgers, there are possible savings opportunities at your restaurant that you can use to improve your bottom line.
In your walk-in: Purchase the right product for your applications
Did you know that just by selecting a different avocado you could save up to $6.00/case? There are hundreds of dollars of savings waiting for operators if they know the best applications for the products they are already purchasing. For example, let’s take a look at a Mexican restaurant concept that features fresh sliced avocados and guacamole throughout their menu. The restaurant is using No. 1 avocados because they believe the premium Grade #1 lends them better quality and the bigger the avocados are they think will lead to a higher yield.
A study conducted by Consolidated Concepts in 2017 by their spend intelligence team disproved these thoughts. They found that although No. 2 Grade avocados are traditionally underutilized because of a subpar quality stigma compared to grade #1, there is no internal quality differences between the two. In fact, based on the different applications in our Mexican restaurant, Grade #2 avocados could provide a savings of $2.00-$6.00 per case depending on market conditions. (If the guacamole was prepared table-side, the more visually appealing Grade #1 avocado would be more appropriate.)
Savings like these have been found in a variety of common purchasing options. Knowing when and where to use premium fry oil versus generic could save you in quality of the product as well as oil costs. Selecting canned diced tomatoes over whole canned tomatoes for your pizza sauce could provide a better value and overall yield.
On your restaurant water bill
According to Powerhouse Dynamics, restaurants use anywhere from 3,000 to 7,000 gallons per day on water which leads to a pretty pricey water bill. From kitchen and dishwashing usage to cooling and heating, water is used constantly throughout restaurants—and it doesn’t seem to be any obvious place to make cuts.
However, there are plenty of small steps that can be taken to minimize water usage and as a result, lower your restaurant’s water bill. Take for instance the benefits of not running water to thaw out frozen food. Instead of wasting gallons of water and risk jeopardizing the quality of frozen items as they thaw, consider purchasing a thaw rack. By training your team to know when is the best time to take out frozen food for dinner or breakfast prep, you can save the gallons of water on a forced quick defrost.
Additionally, making small changes to water flow and putting a priority on faucet maintenance can save your operation over $100/year. That may not seem like much, but stacked up with other small savings throughout the year, that can add to a pretty penny against those tight margins.
In your credit card processing fees
When paying for low-cost to high-cost items, consumers mainly choose to use their credit cards (60% for low-cost and 90% for high-cost). As restaurants delve into adding more technology forward options in their restaurants like table-side payment tablets and consumers continue to drive growing delivery in online ordering apps, credit card orders are going to keep rolling in.
With 0% markup on credit card processing fees, transparent transactions, and no contracts or added fees, Fattmerchant’s revolutionary merchant services system puts pennies back into your pocket.
On the products you already buy
One of the best places to find savings in your restaurant is on products you already buy. Group Purchasing Organizations like Dining Alliance offer rebates and savings on hundreds of thousands of line items from manufacturers you likely already work with. From coffee to mayonnaise, Dining Alliance utilizes their 7 billion dollars in purchasing power to help independent restaurants get competitive pricing on the products they purchase.