How To Cut Costs Without Cutting Quality: Restaurant Edition

A widely accepted belief about the restaurant industry is that it has exceptionally low-profit margins. That is especially true of low-priced fast-casual and quick-service restaurants. When other stresses, such as increasing rent, food price volatility, and national minimum wage increases, are factored in, it becomes clear that business owners have even less of a cushion to fall back on.

Every penny counts in today’s economy and many restaurateurs have wondered how to cut food costs in their restaurants. Restaurateurs are constantly analyzing their ingredients, work schedules, and food packaging to see how to cut food costs in restaurants and increase profits. But restaurants need to cut costs without sacrificing the quality of their food, service, and ambiance. By implementing these strategies, restaurants can save money without compromising quality.

Strategies for Reducing Restaurant Costs

This section will discuss cost reduction strategies in restaurants’ food service industry. We’ll start by evaluating a restaurant’s current food cost percentage and then look at ways to adjust menus to seasonal ingredients. We’ll also examine employee schedules to identify potential areas of cost savings, and finally, we’ll explore ways to reduce restaurant food waste. By implementing these strategies, restaurants can save money without compromising quality.

Evaluate Your Restaurant’s Current Food Cost Percentage

Evaluating your restaurant’s current food cost percentage is a crucial first step in finding ways to reduce costs without sacrificing quality. To get an accurate read on food costs, restaurants need to track inventory and compare it to sales. This process can be time-consuming and challenging to do manually, but there are software programs that can automate it and make it more accurate. Additionally, it’s important to track restaurant food waste to include in calculating food cost percentage. By taking these steps, restaurants will put themselves in a better position to identify areas where they should implement cost-reduction strategies in restaurants without compromising quality.

Adjusting Menus To Seasonality

As the weather changes, so do the types of products that are available at discount prices. You can often find seasonal produce at a fraction of the cost of non-seasonal options. For restaurants, this presents an opportunity to save money without sacrificing quality.

By adjusting menus to feature seasonal produce, restaurants can take advantage of these discounts and pass the savings on to their customers. In addition to saving money, using seasonal produce also has the added benefit of being more environmentally friendly. Seasonal produce is typically grown locally, reducing the restaurant’s carbon footprint.

There are a few things to remember when adjusting menus to seasonal produce:

  • It is important to consider what is in season in your area
  • You will need to find recipes that highlight seasonal produce
  • You will need to ensure that your customers know the seasonal menu options

Adjusting menus to seasonality is an excellent way for restaurants to save money without compromising quality. By taking advantage of seasonal discounts and using locally grown produce, restaurants can provide their customers with great food at a great price.

Examine Employee Schedules

To save money without sacrificing quality, restaurants must look closely at their employees’ schedules. There are a few ways to adjust schedules to better use the labor force, and cutting back on hours worked can improve employee morale and productivity. Additionally, restaurants can reduce employee benefits and perks without negatively affecting employees.

One way to better use the labor force is by staggering shifts. Instead of having all employees start and end their shifts simultaneously, some will start earlier, and some will finish later. A staggering shift allows the restaurant to stay open for longer hours without needing to pay overtime. It also means that employees are always available to cover breaks and lunch periods.

Another way to adjust schedules is by cutting back on hours worked. It might seem counterintuitive, but research has shown that employees who work fewer hours are more productive. They also have less chance of burning out, so they’re less likely to take days off or quit altogether. When cutting back on hours, it’s important to ensure that employees still receive livable wages. Otherwise, you risk losing good employees to other restaurants offering better pay and working conditions.

Finally, restaurants can reduce employee benefits and perks without negatively affecting employees. For example, instead of offering health insurance, some restaurants provide a stipend that employees can use to purchase their health insurance. It saves the restaurant money while still providing employees with their needed benefits. Other benefits you can reduce or eliminate include 401(k) matching programs, paid time off, and tuition reimbursement programs.

Finding Sources of Food Waste

One of the best ways to reduce restaurant food waste is to pinpoint the sources of food waste. Overproduction, spoilage, and incorrect portion sizes are all common causes of restaurant food waste, and by monitoring these areas, you can reduce the amount of restaurant food waste. Educating your employees on the importance of food waste reduction is also crucial in preventing food waste.

Overproduction is often the result of poor planning. To avoid overproduction, create a production schedule for each menu item and ensure you only prepare the amount of food you need. If you have any leftover ingredients, find recipes that use them so that nothing goes to waste.

Spoilage can occur when food is not stored correctly. Ensure that all perishable items are stored in the refrigerator or freezer and used before their expiration date. Inspect all produce before using it to ensure it is not spoiled. Incorrect portion sizes are another common cause of restaurant food waste. When plating meals, ensure each dish has the correct portion size. Avoid giving customers too much food or leaving unfinished plates behind.

Educating your employees on the importance of reducing food waste is also crucial in preventing food waste. Train your employees on proper portion sizes and storage methods to avoid spoiling food. Encourage them to be creative with leftovers and use up any ingredients before they go bad. By finding sources of food waste and educating your employees, you can reduce food waste in your restaurant without sacrificing quality.

Cross-Train Your Staff

Cross-training your staff can help you reduce costs without sacrificing quality. By cross-training your staff, you will be able to have a smaller team of employees who are each able to perform multiple tasks. It can save you money on labor costs, as you will not need to hire as many employees. Additionally, cross-trained employees are typically more versatile and adaptable, which can lead to higher-quality work.

There are a few things to consider when cross-training your staff:

  • the different tasks that need to be done
  • the necessary skills for each task
  • the learning styles of your employees

When considering the different tasks, think about which can be done by multiple people and which require a specialist. For example, customer service representatives can handle simple questions about your product, but they will likely need to escalate more complex questions to a product specialist.

When considering the necessary skills for each task, think about which skills your team members already possess and those they don’t. If your employees need to gain the essential skills, you will need to provide training so that they can learn how to do the task correctly.

Finally, when considering the learning styles of your employees, think about how they best learn new information. Some people learn best by doing, while others learn best by listening or reading. The training you can tailor to each employee’s learning style can help them learn more effectively and retain more information.

You can reduce costs without sacrificing quality by taking the time to cross-train your staff. By having a smaller team of employees who can perform multiple tasks, you can save money on labor costs. Additionally, cross-trained employees are typically more versatile and adaptable, which can lead to higher-quality work.

Increase Sales with Innovative To-Go Items

To increase sales, restaurants need to offer innovative to-go items. To-go items can include unique items not typically sold in restaurants, such as pre-packaged meals, snacks, and drinks. You can provide to-go items at a discount or with a freebie to increase sales and market them through social media, online ads, or word-of-mouth. Innovative to-go packaging can make the experience more enjoyable for the customer and increase their likelihood of returning.

Another way to increase sales is by offering discounts on to-go orders. It could involve offering a percentage off the total bill or giving a freebie with each purchase. This strategy can increase sales by making it more affordable for customers to order from the restaurant. It may also encourage customers to try new menu items they wouldn’t usually order.

Innovative packaging can also help increase sales of to-go orders. By making the experience more enjoyable for the customer, they are more likely to return. It could involve using unique or eco-friendly packaging materials or offering reusable containers that customers can return for a discount on their next purchase.

Start a Cash-Discount Program

A cash-discount program can be an excellent way for restaurants to save money. Under a cash-discount program, customers who pay with cash receive a discount on their total bill. To make this work, you must install a point-of-sale system to track and apply the discount.

There are a few things to keep in mind when implementing a cash-discount program:

  • Ensure that you train your employees adequately on how to apply the discount: They should know how to explain the program to customers and use the deal correctly.
  • Make sure to configure your point-of-sale system properly: The system should be able to track discounts and apply them correctly.
  • Encourage customers to pay with cash by offering a small discount, such as 5%: Additionally, properly training your employees and configuring your point-of-sale system will help ensure that the program runs smoothly.

How Technology Can Help You Reduce Costs and Be More Efficient

Technology can help reduce costs and be more efficient in several ways. For example, technology can help manage inventory more accurately, track sales data, and automate employee scheduling and payroll tasks. By using technology, restaurants can save time and money without compromising quality.

Inventory Management

Inventory management is a critical part of any restaurant business. Technology can help manage inventory more accurately by tracking what ingredients you use to make each dish, how much of each ingredient to use, and when dishes are selling the most. This information can help restaurants plan their menus more effectively, order the right amount of ingredients, and avoid food waste.

Usage of Data

Sales data is another crucial area where technology can help reduce costs. By tracking sales data, restaurants can identify which menu items are selling the most and adjust their pricing accordingly. Additionally, sales data can help restaurants identify slow times and offer discounts or promotions to boost sales.

Food Waste Management

A restaurant needs food waste management software to help track, monitor, and analyze the amount of food waste that the restaurant generates daily. It can help the restaurant identify areas where they can improve their operations and reduce the amount of food waste they produce.

With tools and reports like Menu Reports, Food Lists, and Shopping lists, you can better keep track of your restaurant’s buying needs and reduce food waste produced. With options to calculate the cost of a recipe, you’re able to ensure that you’re keeping costs low, as well. 

How Nutritionist Pro Can Help

Running a restaurant can be challenging and expensive, with many factors to consider to keep costs low and profits high. One of a restaurant’s key cost reduction strategies rests in its food inventory and purchasing practices. By keeping careful track of inventory and ordering only what’s needed, restaurants can reduce the amount of food that goes to waste and save money on unnecessary purchases.

Nutritionist Pro is a software tool that can help restaurants. The program allows restaurant owners and managers to input information about the ingredients and dishes they use and then generate detailed nutrition information and allergen warnings for those items. It can help restaurants provide information to customers and can also be used to make informed decisions about menu items and inventory.

Contact us today with any questions you may have.