One of the questions I always ask applicants for senior management jobs that we are recruiting for our clients is: ‘What influence does front-of-house have on food costs in a hospitality business?’ It’s common to receive a response along the lines of ‘food costs are the chef’s problem.’ Others correctly talk about wastage from incorrect orders, freebies and staff consumption; but very few identify the main, and most common way the wait staff can torpedo the chef’s best efforts.
Your products don’t have a consistent margin
The reality in many of the restaurants, pubs and cafes we deal with is that most of the products sold — both food and beverage — do not have a consistent profit margin attached to them. For example, you generally make a much higher margin on a soup, risotto or pasta than you do on a prawn or steak dish.
Here I have to assume you accurately and objectively calculate the margins you make on your products in the first place. It still chills me when I encounter hospitality businesses that allow their management to wing-it and don’t have up-to-date costings on all their products. The days of automatically making a profit by the seat of your pants are well and truly gone. The costings and margins you make on your products should be available to all leadership staff in your business, so they can train their staff properly and contribute to your increased profitability.
Without proper training your staff will offer the dishes they like.
In the absence of this information and proper training, your staff — in the quest to deliver customer satisfaction — will tend to recommend dishes and sides that they perceive give the best value for money for the customer. Unfortunately, in the absence of guidance, their recommendations are often going to be the dishes you make the least profit on.
This becomes particularly problematic when the business has a ‘hero’ dish or dishes that do not make much margin but remain on the menu because the owner fears taking them off, because of popularity. I have often found the chef has been instructed not to take the offending dishes off or put-up the selling price for fear of losing regular customer loyalty. These dishes can form a high percentage of the total dishes sold and really screw-up the food costs. The chef is now between a rock and a hard place: being accountable for high food costs, but not free to eliminate the problems that are causing the blow-outs.
Dealing with the issue
There are three ways to deal with maintaining margins as products pass through your front-of-house. The first is time consuming and expensive. It involves training all your service staff, including casuals, to understand all the margins on the products that sell. They also need to know how to move a customer from a low margin product to a higher margin item.
This kind of training can create some tricky problems you may not anticipate — like the rabid left-wing waiter who became apoplectic when he learned there was a 700% margin on a soup, and called the owner an ‘unconscionable bastard’ in one of our training courses. The concept that something is worth what people are prepared to pay for it is lost on some people.
No loss leaders
The second way of dealing with the problem is to make sure that all your popular products have an appropriate margin on them and that you don’t have any loss leaders. The service staff can then sell anything with confidence. The downside is that this can mean that you may have to decrease portion sizes or charge more than the market will bear. This can lead to damaging customer perception problems.
The third, and probably the simplest way to manage margins via your sales staff is to place codes on your menus and wine lists that identify dishes and wines the staff can recommend when asked. The codes can be overt — like a ‘recommended dish’ symbol next to the items you want to sell— or discrete, like missing full stops after a menu or wine description. I have also seen this achieved by a decorative vine motif down the left side of the menu where some leaves next to high margin items were a solid colour and do not recommend items were shaded.
The main message I want to get across is that the management of food costs is a combined effort between the kitchen and front-of-house. All too often I encounter businesses that have separated into antagonistic departmental ‘islands’ and the staff have lost sight that they are parts of a whole that must remain healthy or their employment is in jeopardy.