restaurant costs

Offsetting rising restaurant costs in 2021

Restaurant costs were already a burden for operators even before the pandemic raised the stakes. But particularly in the current climate, operators constantly need to adapt to stay afloat, you’ve got to adapt.

Restaurant labour costs are rising amid a staffing challenge, food prices have soared in many industry sectors, and logistics costs keep climbing, among others.

Many of these are uncontrollable for restaurant owners and operators, so what can be done to mitigate these price hikes?

Workstream has issued six valuable tips for restaurateurs:

Simplify menus

Does your menu really need all of your current offerings? In all probability, there is already room to manoeuvre. not.

Get critical and strategic by removing items that your customers aren’t really buying to help reduce your wholesale food costs and allow you to purchase in bulk the items you need for your remaining menu offerings.

Before committing to one final simplified menu, you may want to try out different versions of the shortened menu to see how it affects your monthly earnings and customer satisfaction.

Streamline hiring processes

You know how hard it can be to find and hire quality candidates. You probably also know that it isn’t just difficult, it’s also time-consuming and costly — especially during the current labour shortage.

It’s well worth evaluating and improving your hiring process by taking steps like eliminating redundancy in your application form, removing questions that are unnecessary for the job at hand or can be found in the applicant’s resume, and investing in HR technology that makes it easy for you to evaluate and easily follow up with the applicants who have the most potential for success.

Prioritize staff retention

Do you know your staff turnover rate? If not, you should, because staff turnover is a hidden labour cost for any type of business. By retaining quality staff members, you don’t have to spend time, money, and resources on hiring.

So, what are some things you can do to reduce turnover and boost retention? Start by investing in your employees, such as offering additional training to help them grow professionally.

Reduce food waste

With wholesale food costs soaring, it’s time to get serious about reducing food waste. According to a recent report, for every $1 invested in programs to reduce food waste, restaurants save an average of $7 in restaurant costs.

Start by auditing the amount of food your restaurant wastes per month. During your audit, categorize the waste to get an idea of where the majority comes from (e.g. spoiled inventory, kitchen scraps). Then look for ways to either repurpose the waste, adopt tools to better manage your inventory, or stop buying or buy less of the frequently wasted products.

Invest in self-ordering kiosks

With some COVID-19 restrictions still in place and changes to consumer behaviour becoming more evident, self-ordering kiosks deserve your
attention. Yes, purchasing this technology requires a financial investment. But it’s worth fitting into your budget. Why? Because the return on investment, now and in the near future, could be huge.

These kiosks are already proving popular and profitable for many large-scale fast-food chains. Firstly, they can help reduce labour costs, and they
can also help to enhance customer experience by reducing order errors. Lastly, the contactless nature of self-ordering kiosks aligns with customer expectations for safety during the pandemic.

Add more budget flexibility

Finally, the importance of flexibility cannot be stressed enough; it is key to every aspect of your business. By having a flexible budget, you can more easily pivot your focus on spending and saving if needed.

Aim to create multiple budgets that account for different scenarios and the ongoing uncertainty. For example, you can create three different budgets that you can consider conservative, moderate, and aggressive. To make this process more efficient, consider investing in restaurant accounting software.