With food inflation predicted to rise by 4.2 per cent by the end of the year and consumers continuing to feel the financial pinch, operators within the industry will be under increasing pressure to keep prices at the right level without going out of business, according to Prestige Purchasing chief executive David Read.
Following a briefing on the subject last week, Read, whose consultancy has worked with restaurant groups such as Pho, Carluccio’s and Chilango, told BigHospitality the well-used practice of negotiating with suppliers to lower prices was no longer viable because margins, particularly on dairy and meat were now so small.
“If you think that the average food supplier is making a net return of 10 per cent then going and talking to him about getting your butter price down is not going to make any impact, so you have to look at other ways of cutting costs,” he said.
Menu-planning
Read suggests meticulous menu-planning and an assessment of kitchen processes as the two main ways to cut costs.
“We find that all too often very little attention is given to how many dishes are put on the menu,” he said. “A large menu with lots of items on it means high stock costs and space for storage. If you buy lots and lots of products it also means lots of labour is needed to prepare those ingredients.
“What you decide to have on your menu can have a huge impact on all your costs.”
Pho and Wagamama are two restaurant groups Read believes have mastered menu design, using relatively few ingredients, but presented in a variety of ways.
He said: “The Pho menu is extremely well-designed because it is varied and choice-driven, but also quite economical with its products.”
Make or buy
Read’s second top tip for cutting costs is for chefs to weigh up the advantages of making or preparing certain foods and ingredients in their own kitchen versus buying them in.
While many chefs feel under pressure to prepare all dishes from scratch, Read says it can make better business sense to buy in certain pre-prepared ingredients, such as bread, or fish which has already been filleted.
He said: “It depends on the kind of restaurant you run of course, but sometimes people are dogmatic about producing everything fresh in-house when they should be dogmatic about quality and cost.
“There are some fantastic artisan bakers now who can make bread to order for restaurants and when it comes to fish, if you have chefs who fillet it badly and slowly, creating wastage and taking too much time, it may be better to buy it from the fishmonger who, for a small extra cost, can deliver exactly what you want when you want it."
Read advised operators to make changes to their business now to remain competitive as food supplies would continue to be affected by four macro influences - commodity markets, production costs, demographics and climate change - for the foreseeable future.