Tips for tier-proof stock control in hospitality
The UK hospitality industry is in constant flux with changing levels of restrictions. We spoke to Michelin Starred chef and hospitality consultant, John Wood about balancing stock control as we move back and forth through the tier system.
Having worked through recessions, the 9/11 crisis and many other challenging situations over the last 37 years, I’ve had a great deal of experience in damage limitation and trading through adversity. It won’t surprise you that keeping a close eye on stock levels is one of the basics to keeping afloat. Here are some ideas to consider to help you do just that…
Stock control
Your starting point is to check and value your entire stock, across all food and drink items. Each item will fall into one of these categories:
- Fresh items due to expire that will need to be disposed of if not used.
- Items (eg in freezers) that are not on any of your menus and will need to be used.
- Excess stock of items with a longer expiry date.
- Standard items that will be used up in the next 1-2 weeks, that you regularly re-order.
Make note of each of these items and ideally the value of them. Once you have this list, you’ll have the information you need to review your menus.
Remember “Dead stock is dead revenue”
Menu re-development
With the restrictions constantly changing, its really important to ensure that you’re not holding large amounts of stock that could potentially go to waste and result in significant financial loss. One way to do this is to review your menus and reduce your offering.
Some key points you might want to consider:
- Identify the ‘Stars’ and ‘Ploughorses’ of your menu. Pick your top 10-15 selling dishes and just offer those.
- Stars | Stars are extremely popular and have a high contribution margin. Ideally Stars should be your flagship or signature menu items.
- Ploughhorse | Ploughhorses are high in popularity but low in contribution margin. Ploughhorse menu items sell well, but don’t significantly increase revenue.
- Puzzles | Puzzles are generally low in popularity and high in contribution margin. Puzzle dishes are difficult to sell but have a high profit margin.
- Dogs | Dogs are low in popularity and low in contribution margin. They are difficult to sell and produce little profit when they do sell.
2. Think about creating or reintroducing those dishes that can be made from the unused stock- mentioned above.
3. Consider using product cross utilisation: using components of an ingredient for several dishes instead of just one (be careful not to have to many repeated items written on the menu).
4. Think about cross preparation. If you create a tomato sauce, try and use it in 2-3 dishes. This saves on labour too.
5. Don’t be afraid if you run out of one or two dishes on the day- keep stock levels tight and reduce wastage.
6. Offer specials to use up excess stock. It’s better to have revenue than wasted stock.
7. If you have excess spirits offer special cocktails.
8. If you have plenty of wine bin-ends- sell them off as a special. In one place I visited, they displayed the wine as you came in with labels on with the original price crossed out and the special price underneath.
9. Start using digital menus. These will allow you the flexibility to adapt your offering daily if necessary to reflect stock levels.
NB: Kitchen CUT’s digital menus allow you to turn on and off dishes/ drinks in seconds that are live on your unique QR code or linked menu. This cuts out the additional cost of printed menus and having to dispose of them after each use. Customers can view and /or order from their own devices.
Seasonal supplier adjustments
Whilst you are looking at your menus think carefully about seasonality.
There is no point in having strawberries and asparagus on your menus now as they are both expensive and at this time of the year do not taste that great!
Talk to your suppliers and ask about cost effective cuts of meat or types of fish that you could substitute out of your menu. Speak to your suppliers regularly they will be more than happy to help. They want you to stay open and in business.
“Pre-order” discounts
This is a concept regularly used by other sectors and for good reason. It allows you to plan. If you can get your customers to pre-order and pre-pay at a discounted rate, they are less likely to cancel and you’ll be able to pre plan stock levels.
For example, a family meal for 4 to include main courses and desserts, with a bottle of house wine and free soft drinks could be £60- choose what they want and pay the set price before they arrive for a 15% discount.
The kitchen then know what to buy as they know how many they have sold. This is great for stock control and reducing wastage!
Don’t get obsessed with margin %
All F&B businesses have Gross Profit % targets for food and drink. This is the time to be more flexible about %. Instead, focus on cashflow and turning stock over; getting your operation busy again and ready to thrive in the New Year.
Find out more
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