Mirus Reporter

Introduction

Controlling food costs is essential if you are interested in restaurant profit margin. I'd like to discuss a few options for implementing controls over your food costs. In practice, there are many ways you can create a control. Let's start with a definition:

According to a website affiliated with the NRA, "The seven stages (of food cost control) are purchasing, receiving, storage, issuing, preparation, cooking, and service."

If you include retailing and selling under service, I agree. If your controls over food costs do not cover the activities of selling, or retailing, you are not seeing the entire picture.

Be careful when researching food cost controls. There are too many sites that think food cost control is simply the formula for calculating Actual Food Cost as a percentage of sales. While this formula is useful as part of a control, by itself it is simply a measurement.

This is the first of a series of posts on the topic of restaurant food costing and perpetual inventory systems, which in most cases are two parts of a typical restaurant back office (BOH) system.  I'd like to collect your input on today's question:

Another Bite Out of Your Restaurant Profit Margin

It’s certainly not easy to own and operate a successful restaurant chain in today’s day and age. Take for example, a recent story about a small restaurant that placed a "minimum wage fee" on their customer receipts. The move was intended to shed a light on the raised minimum wages. While some customers understood and sympathized with the owner, others reacted harshly. Perhaps this was not the best way to handle minimum wage hikes.

Between high food costs and energy inflation, the unavoidable losses due to fraud, potential increases in state unemployment taxes, the ACA and now the imminent wage increases, restaurant operators are fraught with worry, more than ever, over keeping their doors open and their businesses profitable.