A restaurant management system to tackle 2018’s challenges | Kitchen CUT

2018 promises to be a year that will see a great deal of change within the F&B industry. The prospect of Brexit casting an uncertain shadow coupled with increased competition and rising costs of food, property and staff, are all factors which seem set to present industry leaders with a host of challenges. 

We talked to Kitchen CUT founder and Michelin Starred Chef, John Wood, who with 35 years’ experience in the industry has shared his predictions and advice for the sector in 2018;  how businesses of all sizes can rise to the challenges outlined in the recent CGA Business Confidence Survey with the help of Kitchen CUT’s restaurant management system.

CGA’s Business Confidence Survey Findings.

CGA’s latest Business Confidence Survey found that only 30% of leaders of restaurant, pub, bar and coffee shop groups are optimistic about general market prospects for the next 12 months – down from 47% in the first quarter of 2017.

The research, based on responses from more than 100 senior executives across the sector, including big corporates and small entrepreneurial operators, also found that

• a third (32%) of leaders admitted their business’ performance had been below expectations in the past six months – down 5% from May’s survey.
• 57% of leaders concerned about consumer confidence during the next six months 
• 12.2% are pessimistic about their own business’ prospects for the next year.
• 71% of leaders said the decision to leave the EU had a negative impact on their business, with only 3% citing a positive impact

2018 and your business

Having read the CGA Business Confidence survey, there is no doubt that 2018 will be an exciting year for many businesses, both existing operations and new ones.  It is also, however, going to be extremely challenging in terms of managing costs and ensuring menu prices remain competitive in the market. With many high street brands growing rapidly, making huge investments and increasing buying power, there is going to more pressure than ever on small to mid-size restaurants and hotel groups and single site operators.

Hitting suppliers hard

There are some organisations who are turning to procurement companies to squeeze their suppliers on price, then punishing those same suppliers further by charging them additional costs on any transactions. This only puts pressure on suppliers to try and claw back their losses with no one being a clear winner. This approach will eventually have a long-term effect on suppliers and businesses, making it very difficult to trade and operate with such tight margins.

Price increases are going to be inevitable with the cost of so many products increasing heavily in the first two quarters of 2018, and so this is going to be a challenging year ahead for many businesses large or small. The hospitality industry has seen some drastic price increases across many products in Dairy, Meat and Fish in 2017 and with Brexit looming, this will continue to rise well into 2018 and beyond.

Get control in 2018

2018 is a good time for businesses to get a tighter control on costs and to gain transparency of margins for every dish and drink that they sell. By having live pricing links to all dishes and menus, it is then possible to make small tweaks and adjustments to these without having to make large sweeping changes to menu pricing. Many businesses struggle with maintaining margins and delivering good profits and with rising costs they turn to adding £/$/€ 0.50-1.00 on every main course or starter.  This is definitely not the answer when you are looking to grow customer loyalty and increase your amount of covers. Many customers will just walk to a competitor that charges less.

At Kitchen CUT we believe in a more structured and sensible approach to managing costs and price increases. We believe in helping you to work in partnership with your suppliers and agreeing on a sensible approach to deal with price increases and finding alternative products/cuts and negotiating better prices for bulk purchasing. Instead of letting 3 veg and fruit suppliers fight this out every week for your business, use 1/2/3 vegetable suppliers, but give all of them a decent share of your orders and in return they will give you better prices. Getting one supplier to drive to you for 2 bunches of chives is not good for them and they will find a way of getting that cost back somehow in the future! In this scenario, no one is a winner.

We also believe in applying small incremental menu price increases, but only for the dishes that are not achieving your targeted margin. DON’T punish your customers for the team’s inability to manage margins and cost!

Menu Engineering with a restaurant management system

As we have mentioned in previous blog posts, Menu Engineering is absolutely crucial to running a successful business and ensuring you are selling the right dishes and drinks to maximise bottom line profit. Many people believe that the answer to success lies in selling only the dishes/drinks that makes you the best margins, or selling the dish/drink that makes you the most cash. In fact, the answer lies in maintaining a healthy mix between the two.

At Kitchen CUT we offer a fully automated report* that takes your sales data and identifies the best performing items on your menus. This then allows you regularly asses the performance of your menu and make the necessary tweaks to this to ensure you deliver a higher level of profit.

You don’t have to change any prices or products to make more profit, you just need to change your sales mix. Kitchen CUT’s restaurant management system provides this information daily so you can make sensible, calculated, financial decisions to improve your profit.

So, if you want to have a successful and profitable 2018 and be able to manage the challenges that the new year will bring, then feel free to contact us for advice on how to do this. We can hand hold you and your teams through the process of using technology to help you get control, without having to punish your suppliers or customers. That way everyone wins!

* When connected to EPOS

You can get more information about Kitchen CUT by emailing support@kitchencut.com or calling +44 (0) 330 113 0050

You can register for a free trial here.