Reducing Your Restaurant's Food Cost Could be Easier than You Think

One simple trick can reduce your food cost by 2-3 percent. With your descending dollar report, which is the record of what you buy from each vendor sorted in the order of what you have spent the most money on down to the least, it's possible.

Start by gathering a descending dollar report (or descending case report) from ALL of your vendors and from ANY business where you purchase food, including the broadline distributors to the specialty meat company to the grocery stores you run to pick up a quick item. In a perfect world, you would gather this information for the same date range in a spreadsheet format. You may have to create a spreadsheet for the smaller niche vendors, such as meat and produce. You will want the information on this report for the past six months of purchases, or since you changed your menu if that is more recent, and only for the products you are purchasing today.

Once this data is collected in spreadsheet form, combine ALL of your purchases and sort that spreadsheet from what you've spent the most money on to what you have spent the least amount of money on.

What you will likely discover is the top 10-12 purchases represent 50 percent of ALL your purchasing. See the example below:

Next, take your top 10-12 products that you purchase as listed in our compiled descending dollar report and ask your food sales people from whom you purchase these products, "If I promise to buy all of this product from you over the next year, can I get a better price?" It's like at a food show, if you promise a vendor that you will purchase a certain number of cases of a specific product, they would lock you into a better price for that product. Well, distributors are able to do that anytime.

If you're lucky, your sales person will be able to simply give you a better price. If they've already been giving you the best prices available, and tell you no, ask this next question, "Do you have a like-quality or better-quality product at a cheaper price?"

Notice, I didn't have you ask if they had a cheaper product. You NEVER want to go with a lower quality product, that would go against your core values and kill your dish. But you should be willing to switch to an equal quality product or better-quality product if you can get it for a better price than you are paying now.

By simply gathering the right data, doing some manual data entry, combining all of your reports and sorting that data, you'll be able to attack your top 10-12 items you purchase and reduce your food cost by 2-3 percent! My question to you is, not will you do it, but rather what the heck are you waiting for? Take action!

David Scott Peters is a restaurant consultant, event speaker and founder of TheRestaurantExpert.com, a company committed to the success of independent restaurants. TheRestaurantExpert.com offers an exclusive online restaurant management software designed specifically to meet the complete operational needs of independent operators, including holding their managers accountable and running a profitable business. Combined with one-on-one coaching and group workshops, TheRestaurantExpert.com is helping independent restaurants find success in the highly competitive restaurant industry. Download a free report to discover the #1 secret to lowering food and labor costs and running the independent restaurant you've always dreamed of. Learn more about how David can help you at www.TheRestaurantExpert.com.