The quick-service restaurant business has to work with the tightest of profit margins, leaving little to no room for waste. In recent years, rising food costs have put a greater strain on QSR profit margins than ever before. According to the U.S. Bureau of Labor Statistics, inflation has increased food prices by more than 10% year-over-year, and many QSRs have been forced to increase menu prices, cut staff, or take other drastic measures just to stay in business.
However, constant price increases aren’t sustainable for any business. Fortunately, with strategic planning and a little innovation, QSRs can find other ways to reduce or offset rising food costs and maintain a competitive edge in the market. In this post, we’ll explore several strategies that QSRs should consider pursuing to help navigate the challenge of rising food costs.
Minimize Food Waste
How much food is your restaurant wasting? Rising food costs are even harder to swallow when that expensive food is being thrown away. Through careful forecasting, however, you can make the most of each ingredient, minimizing waste and keeping inventory costs at a minimum.
To reduce food waste, QSRs need a way to calculate wastage. This is where an analytics platform that tracks inventory and sales data can provide invaluable insights. Gather and use this data to better understand trends and forecast inventory requirements accordingly. You can even integrate your analytics platform with your physical systems to provide real-time insights---for example, to monitor the temperature of refrigerators and avoid wastage in case of equipment failure.
Once you have a good understanding of your restaurant’s demand, you can adjust your purchasing schedule so you always have exactly how much of each ingredient you need---no more, no less. This way, you avoid the costs of either excess inventory (spoilage and storage space) or insufficient inventory (lost business due to out-of-stock menu items).
Establishing standardized portion sizes for menu items is a crucial part of controlling rising food costs. This not only ensures that customers receive the expected amount of food but also enables QSRs to accurately calculate ingredient costs. Efficient portion control directly impacts food costs by reducing waste and the amount of ingredients needed per dish.
Well-trained staff are a key part of minimizing waste through portioning---training employees on efficient food handling, portioning, and preparation techniques ensures that every ingredient is maximized. Employees who have not been adequately trained on portioning will inevitably produce inconsistent results when preparing menu items. It’s not enough to just set portion sizes---make sure your employees know how each ingredient should be portioned in each dish and are trained to a process. The better you control the process, the more consistent their results will be---which means a better product with less waste.
Invest in Training (and Cross-Training)
Effective employee training is a powerful cost-saving tool. Well-trained staff are more productive, more efficient, work faster, produce less waste, and ultimately contribute to a more profitable bottom line. New hires are able to start contributing sooner if they receive good training. Well-trained team members also tend to stick around longer, resulting in less turnover.
For QSRs facing rising food costs, well-trained employees are more likely to correctly follow procedures and less likely to make mistakes. Especially in food preparation, training can ensure QSR employees do not overuse or waste ingredients. This means less food waste and lower inventory costs that can help offset high food prices.
Cross-training is an effective way to help QSR teams work more efficiently and ensure coverage in any situation while keeping labor costs down. Versatile employees who can fill multiple roles in the restaurant allow you to respond quickly when someone calls out or there’s an unexpected spike in business.
Reduce Employee Turnover
Turnover is a big issue in the restaurant business---and it costs QSRs thousands of dollars per employee on lost productivity, rehiring, and training.
Reducing turnover can have a big impact on total operating costs. Fortunately, there are lots of things QSRs can do to keep their employees happy and coming back to work:
- Competitive pay and benefits are essential for retaining employees. QSRs should regularly review their compensation packages to ensure they remain competitive in the industry. Benefits like health insurance, retirement savings plans, employee discounts, and performance-based incentives can give you an edge over competitors in attracting and retaining employees.
- Invest in thorough, ongoing employee training. Properly trained employees can do their jobs more competently and confidently, which increases job satisfaction. Regular training also provides opportunities to develop skills that can lead to career advancement, boosting engagement and morale.
- Establish clear and open lines of communication. Encourage feedback from employees, and actively listen to their concerns and ideas. Employees who feel heard and valued are more likely to stick around.
- Recognize and reward exceptional performance. Gift cards, extra time off, or even just recognizing an “employee of the month” can boost employee morale and ensure that your best workers feel appreciated for their efforts.
- Create opportunities for growth and advancement to motivate employees to invest in their roles for the long term. Development plans, mentorship programs, and cross-training opportunities help employees build new skills and take on additional responsibilities within the business.
By investing in their employees and fostering a positive work environment, QSRs can create a work culture that attracts and retains dedicated team members.
Be Smart with Scheduling
Payroll costs typically make up 20-30% of operating costs for QSRs---a huge opportunity for optimization. Inefficient scheduling can lead to overstaffing, understaffing, and overtime, which can add up to a lot of unnecessary costs. With thoughtful planning, though, these problems can be avoided.
QSRs can reduce their operating costs by using data to inform the scheduling process. An analytics app can track data points like customer traffic, table turnover, and team performance to build schedules that ensure you have adequate coverage during peak hours while minimizing excess labor during slower periods. Cross-training can also help here by giving you the flexibility to move employees around when help is needed or work is slow in a particular area.
An app can also make the scheduling process smoother by facilitating communication. Encourage employees to communicate with their managers and the rest of their team about schedule conflicts or swaps so everyone can see what shifts are available and who is looking to pick up hours. Add to that the time a mobile platform saves on reporting and task management, and you’re looking at around 45 minutes saved per employee, per day---and that means accomplishing more with fewer people on the clock.
Overtime can drive up labor costs significantly. While occasional overtime may be necessary, it's important to monitor and control these costs. By accurately forecasting demand and using smart scheduling practices, QSRs can reduce the need for overtime, reducing operating costs over time.
Look to Your Employees for Insights
One often untapped resource for cost-saving ideas is already in your restaurant: your employees. Your employees are the frontline workers, interacting directly with customers and handling day-to-day operations. They have firsthand knowledge of what works and where waste occurs. They receive, store, handle, prep, cook, and serve your menu items every day, and many of them have been working in the industry for years. Don’t let that experience go to waste.
Encourage employees to contribute their ideas to make tasks more efficient, whether through brainstorming meetings, a suggestion box, or a digital platform like a team communication app. Create an open and non-judgmental environment where everyone feels comfortable sharing their thoughts. Share relevant data with your employees, such as sales trends, inventory levels, and cost breakdowns to empower them to make informed suggestions. Also, consider a recognition program or incentives for ideas that lead to significant cost savings. This motivates employees while reinforcing the importance of their contributions.
After gathering suggestions, evaluate and prioritize them based on potential savings, feasibility, and impact on operations. Implementing the most impactful ideas can lead to substantial savings over time.
Combining Useful Datasets
The good news is that you’re not alone---all QSRs are struggling with rising food costs. That means that with the right tools and strategies, you can gain a competitive edge over less savvy restaurant operators.
SimpliField's all-in-one platform is designed to help QSRs achieve operational excellence by integrating task management, team communications, and data analytics in one easy-to-use platform. With just your team's smartphones and the SimpliField app, QSRs can:
- Track important KPIs and metrics to maintain insight into operations and reveal cost-saving opportunities
- Keep customers and employees safe by tracking and automating food safety protocols through timestamped reports
- Quickly address issues with real-time visibility, team communications, and action plans
- Empower employees by giving them a voice through feedback, posts, messaging, and interactive polls
- Instantly notify teams of important news and information through notifications and pop-ups
- Create unique and cadenced checklists, and assign tasks to others to complete
SimpliField’s onboarding and microlearning features allow you to train your employees quickly and effectively while giving them constant access to bite-sized learning modules to improve their skills and engagement. Empower your teams with access to constant learning, allowing them to take ownership of their career growth---and watch as your retention rates and employee engagement soar.
SimpliField's business communications, analytics, and operations platform combines everything QSRs need to optimize their operations and combat rising food costs. Contact us for a live demo and see how SimpliField can help your team today.
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