Reduce Your Food Cost? It Could Be Easier Than You Think

reduce your food cost

One simple trick can reduce your food cost by 2–3 percent. Gather a descending dollar report (or descending case report) from ALL of your vendors and from ANY business where you purchase food, including the broadline distributors to the specialty meat company to the grocery stores you run to pick up a quick item. You want purchases for the last six months or since you last updated your menu. In a perfect world, you would gather this information for the same date range in a spreadsheet format. You may have to create a spreadsheet for the smaller niche vendors, such as meat and produce.

Once this data is collected in spreadsheet form, combine ALL of your purchases and sort that spreadsheet from what you’ve spent the most money on to what you have spent the least amount of money on.

What you will likely discover is the top 10–12 purchases represent 50 percent of ALL your purchasing.

See the example below to reduce your food cost…

reduce your food costNext, take your top 10–12 products that you purchase as listed in your compiled descending dollar report and ask your food sales people, “If I promise to buy all of this product from you over the next year, can I get a better price?” It’s like at a food show, if you promise a vendor that you will purchase a certain number of cases of a specific product, they can lock you into a better price for that product. Distributors are able to do that anytime.

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If you’re lucky, your sales person will be able to simply give you a better price. If they’ve already been giving you the best prices available, and tell you no, ask this next question, “Do you have a like-quality or better-quality product at a cheaper price?”

NEVER go with a lower quality product because that could go against your core values and kill your dish. But you should be willing to switch to an equal quality product or better-quality product if you can get it for a better price than you are paying now.

By simply gathering the right data, doing some manual data entry, combining all of your reports and sorting that data, you’ll be able to attack your top 10–12 items you purchase and reduce your food cost by 2–3 percent! My question to you is, not will you do it, but rather what the heck are you waiting for? Take action!

David Scott Peters
David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. Download a free report to discover the #1 secret to lowering food and labor costs and running the independent restaurant you’ve always dreamed of. Learn more about how David can help you at http://www.TheRestaurantExpert.com.