Transcript Document
Controlling Costs To Protect Profits Chris Marshall Regency Purchasing Group My Background… • BA (Hons) Hospitality Business Management. • Over 20 years in catering environments. • Hotels, Restaurants/Bars, Michelin, Play Operator, Purchasing. • Experience in running/owning own operations. • Now working for RPG alongside a team of operators. Topics • The Profit Triangle • Purchasing Flow • Money Saving & Profit Increase • Utilities Overview • Q&A The ‘Profit Triangle’ A systems approach to purchasing. • Think of it as a flow chart. • Need to choose a starting point. • This depends on if a new starter or existing operation. Purchasing flow Decide on/review your menu or offering. Manage and monitor purchasing over a period. Assess value added benefits from suppliers. Breakdown the ingredients needed. Compare the market for pricing. The menu/offering This may be determined by; (not exhaustive) • Your customer demographic. • The style of menu you wish to offer. • The brand/quality you are portraying. • The ability of the staff. • The equipment you have at your disposal or the layout of your business. • Use the resources and people around you to help you decide (FECA members, RPG etc.) Breakdown ingredients needed • Work back from your menu. • Include your workforce in the task. • What is the ‘recipe’ for each dish or item sold? • You may consider ancillary items for some. e.g. ketchup, tartar sauce. Create spreadsheet of all ingredients This will come in useful when monitoring/managing purchasing; • Supplier comparisons. (At review or ongoing). • Basis for stock and order sheets. • Basis for stocktake sheets. • Allergen data (as required since December 2014). • Contract lines (CL) or Specially Priced Lines (SPL) assessment. Supplier A Acc No: 12345678 Tel:01234 56789 Rep:Mr Bloggs (01234) 56789 Delivery Days:Mon Wed Sat Order Dry Goods Fri for Monday Regency ASM Chris Marshall (07717) 646129 Last updated 01/01/01 Order Date: Code Description 1061 Teacakes 5" 1281 Cornflour 1492 Pizza Sauce Spicy 1885 Chocolate Brownies 1963 Black Olives 1982 Soft Light Brown Sugar 2897 Superior Ham 2951 Macaroni 3271 Salt Sachet 3483 White Bread 3484 Brown Bread Pack 5x48s 3.5kg 2.95kg 12ptn 2.37kg 3kg 500g 3kg 1000 Each Each (Orders) (Stocktake) Qty Stock (Stocktake) Price £9.81 £3.95 £2.55 £8.45 £5.72 £4.90 £3.60 £6.77 £1.30 £0.90 £0.90 Value Outlet A Account Name Account Number Category Code Description SPL Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet Outlet 10866 26448 100243 12718 23179 100268 22383 71148 71344 3897 34484 88308 88394 89798 555207 555451 9802 87045 4027 106664 12383 £0.77 £6.83 £7.41 £40.55 £2.74 £10.71 £6.60 £21.32 £7.56 £10.66 £11.08 £10.54 £3.18 £8.44 £24.27 £4.43 £18.27 £9.14 £13.18 £41.54 £6.09 A A A A A A A A A A A A A A A A A A A A A 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 123456 Bakers Mixes & F Beverages Beverages Butter, Spreads Butter, Spreads Carbohydrate Acc Cheese Cheese Cheese Chips Chips Non Food Non Food Non Food Non Food Non Food Oils & Dairy Oils & Dairy Poultry Poultry (Chill) Sauces & Gravies Brakes Self Raising Flour 1x1.5kg Brakes The Juice Cranberry 12x1L Brakes The Juice Orange 12x1L Brake Salted Dairy Butter 70041 40x250g Summer County Spread CB 2kg Knorr Npc Lasagne 1x3kg Somerset Brie CB 1kg Brakes Mat Col Ched 70083 CB Min 4.75kg Brakes Smoked Cheddar Cheese CB 1kg Brake Dual Stor Thick Fries 9/16 6x2.5kg McCain Bob DS Beefeater Chips 4x2.27kg Brks White 2ply Napkin 40cm 2x300 Brakes Black Bendy Straw 200mm 4x250 SQUAT C/Feed Kitchen Wipe 250 sheets 1x6 White 2ply Napkin 40cm 1x2000 Thermal Credit Card Printer Roll 1x20 Brakes Extended Life Oil 1x20ltr Brakes Olive Pomace Oil 1x5L Hot'n'Kickin Chicken Wings2.27kg(876143) Imp Chicken Fillets 200-230g 2x5kg U/Bens Mexican Salsa 1x2.23kg When comparing the market place. • What is a good price? Include at least 3 suppliers in comparison. • Look at high volume lines then also look at basket of goods. • ‘Quality’ of products is as important (not always price led). • Delivery & flexibility of suppliers. • ‘One stop shops’ vs ‘cherry picking’? • Data available to you to help you i.e. management reports. • Pro-activity/New products are they actively put in front of you. (Be careful though!) • Brand owner support. E.g. POS, Equipment, Training. • Rates of sale between brands or products. • Worth thinking cost per portion rather than case price. Helps in making decisions. Simple Supplier Analysis IDEAL PRICE SUPPORT QUALITY Once agreed on suppliers • Ensure pricing fixed for a good period if possible. (wont always apply to all products). • Get a copy of contract lines (CL) or Special Price Lines (SPL) to ensure pricing loaded correctly and pricing is on file for review. • Get any added value deals in writing. • You may want to get allergen data for later at this stage. Ongoing monitoring • Periodically check pricing against contract lines. Ensures no ‘price slippage’ (or get someone to manage that for you). • Also check for items ‘off contract’. • Keep a note of what dishes sell well and which don’t (EPOS reports) to help on next menu review. Money saving & profit increasing tips • • • • • • • • • Buy in bulk where possible. Watch for split case charges. Use the ‘deals brochures’ but be careful! Own brand over branded? Upselling within the menu and at the till. (Can build menu with this in mind). ‘Premiumisation’ Comparing rates of sale using supplier data. Brand owner support to help sell product. E.g. Equipment, POS, Training etc. Use planograms from suppliers. Controlling cost of sales… Examples of ‘Constant Control’. • Food • Drink (Soft Drinks/Tea/Coffee etc.) • Non-Food (Chemicals/Cleaning/Paper/Hygiene etc.). . Examples of ‘Periodic Control’ • Waste • Utilities Utilities… a costly affair? • It’s back to profit triangle! • Utilities is commonly one of the top 3 costs in the business. • Contract lengths. • Notice periods. • Assumptive renewals. • Tariffs and charges difficult to compare like for like. When can I change? • Contract end (having given notice). • Out of contract. • New premises. • Buying a business. Where can I get help? • The Internet - Comparison sites • Agents • Consultants • Brokers Commonly asked questions. • How much notice do I have to give? • What happens if I don’t? • Why would a broker need to see a copy of my bill? • Why would a ‘Letter of Authority’ be needed? • How long does it take to switch suppliers? • Can my current supplier block the transfer? • When I switch will there be any interruption to my supply? Q&A Open to the floor for questions.