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sign of the times?...economic, that is!

post #1 of 27
Thread Starter 

 to all....chefs, cooks, owners,operators, mgrs.,caterers, food truck operators etc.

how has the economy affected your business, inparticular, your menu? what menu changes have you had to make to stay afloat?

.....smaller portions? offering smaller plates?

.... lower prices?

.....discount coupons?

.... dropping menu items altogether, either because of labor or food cost?

.....paring down dishes to eliminate higher cost ingredients, ie. truffle oil, high end cheeses,pine nuts etc.?

.....changing from an a la carte menu to inclusive dinner(soup or salad w entree)

.....anything else?   cutting staff

 

are your customers ordering differently? smaller plates? opting for appetizers instead of full dinner? house wine instead of premium

i view the  food industry, especially the indie restaurants as the Canary in the mine...first to feel the ill effects of a downturn economy. disposable income being what it is,disposable, dining out is usually the first thing to get cut. 

i know that winter is generally slower, but have you seen any improvement in business, or any hope for improvement for the spring/summer season? 

it is always helpful to me to know how others are adapting

thanks all....

joey

 

 

 

 

food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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post #2 of 27

Tomatoes @ $52 to $58 a flat..........we stopped serving tomatoes

Romaine lettuce .......$60 a cases  .......What the Hell is with that ?????????  Caesar salad no more

Cut Iceberg only when up $2 a case..........

Fryer oil up from @one point last year $19 to a high yesterday of $28 for 35# container.....went up on my FF .25 to cover the cost.

Cut labor this next week 30% and next weekend will be cut 50%..............

Right now we are in a survival mode, trying to keep quality high and food cost and labor low.................

post #3 of 27

I just raised my prices this week, not as much as I should have, kind of hesitant to up them more as everyone is watching their pennies. I don't want to run them off. Won't lower the portion or quality.

 

Tomatoes will be on request only. At approx .20 a slice, 3 slices per sand,  the damn tomato costs me more than the roll that I use for a sandwich.

 

Pork seems to be going crazy too. Pork butts were $2.02 last week, up from a steady price of around $1.20

Cheeses all up...Celery, peppers through the roof.

post #4 of 27

I think it is going to get worse. Every purveyor I speak to blame price of oil and gasoline. for the price increase. I feel it is either going to be the lower pricedd places or the very high priced. The middle I feel will slowly evaporate.. Even Mc Donalds % are down due to price incrases accross the board. They are thinking of raising all their prices now. They thought they could compansate based on volume and overseas sales , but they found that they could not. Adding to the raise in prices is the seasons of year.Take Florida  Romaine is $63.00  a case , tomatoes assorted 25 Lb Lug $56.00 Zuch and Yello squash $2.00 Lb.  It is unbelievable.and will get worse

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #5 of 27

Sales for us are definitely down from last year but being a chain we have no choice but to serve what is on the menu.  We landed in hot water when we stopped serving strawberries and grapes as part of our fruit cups as they both were over $50 per case and that was just insane.  Head office was less than impressed and we were informed that the prices on the menu reflect the fluctuations in food cost.  My foot it does but whatever.. I just work there. 

 

We have cut back on labour significantly and we are doing more with less.  It has helped but there really isn't much lower we can go in that respect without sacrificing quality. 

OK ... where am I going?.. and WHY am I in this handbasket??
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OK ... where am I going?.. and WHY am I in this handbasket??
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post #6 of 27

Then your head office is stupid. Here in Florida Wendy's even has a sign in stores saying that due to price increase in tomatoes and limited availability they are not using at this time . I think the public understands this if they are told..

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #7 of 27

Sugar, it's gone through the roof, and the reality is in Oz is that supermarkets have more buying power than 99% of business, and so a lot of business owners do their restocking from supermarket shelves. Wholesalers are squeezed but their prices are still more expensive than most supermarkets. Lambs at the sale yard this week were nearly $250. I wonder how far things can go backwards before they go forwards again.

I love my job
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I love my job
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post #8 of 27

As I said and based on futures in commodities trading it will get worse, at least here in states.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #9 of 27

Every restauranteur I know, both here and in the real world, reports similar economic woes. And has been doing so for the past three years. Survival is the word of the times.

 

That being the case, you have to wonder who participates in surveys, because, according to the NRA's Restaurant Performance Index, everybody is doing just fine. As reported in the latest Food Arts, as of October, a majority of restaurant operators reported same-store sales gains.

 

Other tracking organizations also paint a rosy picture. Credit and debit card spending was up by 9.5% in restaurants and bars in 2010. And according to the Zagut Survey, there were about 1/3 more restaurant openings than closings.

 

Now I realize that sales and profits are far different figures. But even so, you'd think that if we're doing so much better in volume there should be some reflection of that in profitability. And the impact of runaway food costs certainly is going to affect everybody's bottom line even more.

 

I wonder, too, who decides how to account for costs. I happened to be talking to somebody from a large chain's training group the other night. They track food as a percentage of costs---as do most of us. But they track labor as a percentage of sales. To me this makes no sense. And it certainly can skew the total figures, by presenting an apparent lower labor cost if sales do, indeed, go up. I wonder, too, how they set realistic menu prices?

 

All I can say is that when it comes to economics, this is, indeed, a strange industry we belong to.

 

 

They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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post #10 of 27
Thread Starter 
Quote:
Originally Posted by ChefBillyB View Post

Tomatoes @ $52 to $58 a flat..........we stopped serving tomatoes

Romaine lettuce .......$60 a cases  .......What the Hell is with that ?????????  Caesar salad no more

Cut Iceberg only when up $2 a case..........

Fryer oil up from @one point last year $19 to a high yesterday of $28 for 35# container.....went up on my FF .25 to cover the cost.

Cut labor this next week 30% and next weekend will be cut 50%..............

Right now we are in a survival mode, trying to keep quality high and food cost and labor low.................

cutting your labor 50%? so how do you even stay open? why is fryer oil up? my guess is that now it won't get changed as often in some places...so your fries will taste like calamari? nice... was ordering zucchini yesterday...last week a 5# box was $8.84...this week the same 5# was $24...that's a 200% increase...so, thats about 3 times as much(275%) per lb as ground beef which is probably around $1.80 lb, ...geez.....yeah, inflation is here!... songs for the 'new depression'?

joey

 

food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

Reply
post #11 of 27

"""I wonder, too, who decides how to account for costs. I happened to be talking to somebody from a large chain's training group the other night. They track food as a percentage of costs---as do most of us. But they track labor as a percentage of sales. To me this makes no sense. And it certainly can skew the total figures, by presenting an apparent lower labor cost if sales do, indeed, go up. I wonder, too, how they set realistic menu prices?""" Quote KY

 

KY

  I worked for the VP of Proudfoot Corp (Management Consulting Firm) . and he told me that they charged labor to sales also. It was also in their prospectus the amt. of dollars of sales per employee. I thought it was crazy to, but he told me a lot of major corps. do it this way??  

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #12 of 27

I don't have a problem with indexing costs to sales, per se, Ed. My problem is comparing apples to oranges. If you're going to figure labor as a percentage of sales, then it's only reasonable to compute food costs the same way. If you're not consistent with your accounting practices, how can you possibly know what it costs to produce a plate of food? And if you don't know what it costs to produce it, how do you establish a meaningful selling price?

 

When something is computed against sales it's usually either a fixed cost, or based on an indexed figure. For instance, in your business plan you may have marketing costs represent 2 1/2% of sales. But that hardly applies to labor in most restaurants, where the majority of help is paid hourly, and the number of bodies can vary radically, day-to-day.

 

Of all the possible ways of measuring income, sales is often the least useful. The classic case: In the late teens, GM's sales were going through the roof; one record year after another. Until 1921 when the company declared bancrupcy.

They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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post #13 of 27

I think we've been luckier in Canada as the restaurants I've worked at for the past two years have seen steady, if not increased business.  Staffing's remained at a consistent level and the place I'm returning to is aiming higher in terms of pricing and type of clientele.

"If it's chicken, chicken a la king. If it's fish, fish a la king. If it's turkey, fish a la king." -Bender
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"If it's chicken, chicken a la king. If it's fish, fish a la king. If it's turkey, fish a la king." -Bender
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post #14 of 27

OK, somebody educate me. If one tracks food costs as a percentage of costs, what costs are included?

 

Let me clarify  my confusion, total costs, to me, are fixed costs (overhead) and variable costs (production: i.e. labor, supplies, utilities). If you track labor as a percentage of "costs", are you using the total variable costs?

 

If so, suppose labor stays constant but food (supplies) or utilities increases, then labor as a percentage of costs goes down, that's good right? Why is it good?

 

Perhaps I miss-learned, but I've always tracked ALL my costs as a percentage of sales, after all, where does the money come from to pay costs?

 

Let's take an example: say the target percentage for labor as compared to variable costs is, oh, 40% with supplies and utilities each at 30%. If supplies and utilities each go up 20%, total variable costs go up by 12% and, as a result, labor drops to 35.7% (.4/1.12), this is good? You ARE kidding, right?

 

Now, if you track labor as a % of sales and sales doesn't change, neither does the labor percentage. Meanwhile, the percentage of sales for supplies (food) and utilities goes up, reducing the percentage of sales for profit and clearly pointing out the "trouble areas" that need attention.

 

What I learned was, as a percentage of sales, the targets were:

  • Fixed Expenses = 30% of sales (range 20-40%)
  • Food Costs = 33% of sales (range 20-50%)
  • Labor Costs = 33% of sales (range 10-60%)
  • Profit 4% of sales (range -20 to 15%)

 

I guess I'd better go back to school, I do not understand what value there is in knowing labor as a percentage of "costs", BT,WTHDIK

Chef,
Specialties: MasterCook/RecipeFox; Culinary logistics; Personal Chef; Small restaurant owner; Caterer
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Chef,
Specialties: MasterCook/RecipeFox; Culinary logistics; Personal Chef; Small restaurant owner; Caterer
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post #15 of 27

Yet  in many corporations, Without Sales (and this is what everything seems to be judged on)  there is No Profit or Business.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

Reply
post #16 of 27

Not sure on tax rules, but is there something to be gained by allocating the labour from one area to another. Perhaps claiming real time labour as training increases and decreases margins. In Oz there are incentives to have people in training and if the labour component from a business is separated, figures can get manipulated. 

I love my job
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I love my job
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post #17 of 27

Pete, I have no problems with your analysis (other than you haven't included GSA costs). What I'm saying is that there has to be consistency in accounting practices, otherwise you don't know what you're measuring. If you use % of production costs for food, but % of sales for labor, there is no way to compare your cost elements and make rational decisions about them. That's what that chain is apparently doing.

 

I would also suggest that if you've costed things out properly, food as a % of sales shouldn't change. Or if it does, it does so within very tight parameters.

 

Let's say a particular plate includes $8 worth of ingredients, and sells for $16. If you sell one plate, the food-to-sales figure is 50%. If you sell ten of them, then the sales are $160, the ingredients cost is $80, and the cost as a % of sales is----wait for it---50%. Of course it's never quite that simple. But the end result is the same.

 

As an aside, labor costs in a restaurant environment actually are classed as semi-fixed. That is, while they remain stable over time, they vary (sometimes dramatically) day-to-day. Tracking labor as a % of sales is a way of trying to rationalize those day-to-day variations. For that to work, however, takes great skill in guestimating what the sales figure is likely to be that night, and balancing the labor force (primarily by the number of servers) appropriately.

 

They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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post #18 of 27

My CPA informed me last year that I could roll some payroll into COGS if the employee is manufacturing products.

Have not looked into the benefits of that yet. I'm sure it won't help small business,, as all other Fed decisions.

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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post #19 of 27

They thought they could compansate based on volume and overseas sales

 

The way the fast food industry operates, Ed, has always reminded me of the old story:

 

Two suit & cloakers meet in Miami and start to compare business.

 

One of them says, "I made a fortune last year. I bought a complete line of dresses for $4 and sold them for three."

 

The other one looks at him strangely and says, "I don't understand. If you bought for 4 and sold for 3 you lost a dollar on each one. How'd you make any money."

 

Nonplussed the first one replies, "I made it up on volume."

 

That's precisely why the managers have been up in arms the past couple of years. Corporate keeps mandating these lower prices, which, in many cases, are lower than the store's costs. Burger King, for instance, had a mandated sale item that had to be sold for a buck, but it cost the stores $1.10 to carry it.

 

For anyone but Burger King's corporate thinkers, that's buying dresses for $4 and selling them for 3. And no amount of volume will make up for that.

 

They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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They have taken the oath of the brother in blood, in leavened bread and salt. Rudyard Kipling
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post #20 of 27

we're a small pub, 10 tables and 10 stools at the bar.

 

with the exception of fridays and saturdays, i now work the kitchen solo to save labor.

 

we have notified customers regarding the price/availability of tomato, cucumber, etc. 

 

i know its hard on my kitchen guys getting their hours slashed, and its rough working open to close by myself, but it beats the alternative.

 

 

what would be the best way to budget labor if not from a % of sales?  thats how i was tought.

 

post #21 of 27



 

Quote:
Originally Posted by KYHeirloomer View Post

 

For anyone but Burger King's corporate thinkers, that's buying dresses for $4 and selling them for 3. And no amount of volume will make up for that.

 



It's my understanding that the franchisee has to buy his ingredients and disposables from the franchisee distributer, and many chains make their money this way.  It's also corporate head office that "does" the advertising--which the franchisee pays for as well--the same advertising that sells a $1.10 item for a buck.

 

 

...."This whole reality thing is really not what I expected it would be"......
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...."This whole reality thing is really not what I expected it would be"......
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post #22 of 27

Times like this, mandoline is a chef's best friend. Restaurants should really consider accepting interns to decrease labor costs. Seriously, do restaurants really need experienced cooks to deep-fry, grill, blanch vegies, and simmer stock?

post #23 of 27
Thread Starter 
Quote:
Originally Posted by TransChef View Post

Times like this, mandoline is a chef's best friend. Restaurants should really consider accepting interns to decrease labor costs. Seriously, do restaurants really need experienced cooks to deep-fry, grill, blanch vegies, and simmer stock?


while accepting interns into kitchens to decrease labor  costs may be a simple solution for a better bottom line, what happens to the loyalty factor to our chefs? don't we have a responsibility to try and keep them employed? they have given us their blood, sweat and tears for hours, days, and years, at the expense of family, friends, physical hardships and sometimes marriages. who do you want making important decisions for you? who would you trust more to make them? last, but not least, who will teach the youngbucks?...a manual?...there are a FEW things more important than our bottom lines, no?

food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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post #24 of 27
Quote:
Originally Posted by durangojo View Post




while accepting interns into kitchens to decrease labor  costs may be a simple solution for a better bottom line, what happens to the loyalty factor to our chefs? don't we have a responsibility to try and keep them employed? they have given us their blood, sweat and tears for hours, days, and years, at the expense of family, friends, physical hardships and sometimes marriages. who do you want making important decisions for you? who would you trust more to make them? last, but not least, who will teach the youngbucks?...a manual?...there are a FEW things more important than our bottom lines, no?

 

Ugh...I've been forced to use unskilled prep cooks for a while now so we can pay them minimum wage or not much more. Not worth the money saved in my opinion. I've gotten calls at home asking me how to boil pasta, and that was from someone who's been working with me for more than a year. In my opinion, sometimes it's worth spending a little extra on quality food or labor today if it keeps customers coming. Sometimes it's hard to take the long view when you've got a stack of bills on your desk though.
 

 

post #25 of 27

Mixed feelings on this.  I get interns abut 4 times a year, usually 2-3 week stints.

 

One of the "things" about my place is that I'm the only one in the kitchen, so when I do get an intern, it is one-on-one, and I can focus on training the person.  In this setting, it works out pretty good.  4 days of babysitting usually = a good week of help filling up my freezer with m.e.p. and a chance to breathe a little deeper.

 

A big place can be very different.  I've worked in them too, and I've seen students get frustrated and not show up, or get stuck peeling vegetables the whole time.

...."This whole reality thing is really not what I expected it would be"......
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...."This whole reality thing is really not what I expected it would be"......
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post #26 of 27

How to you go about finding interns?  Would love to be able to get a job in a nicer resturaunt, even if it is degrading work, like cleaning dishes.


 

I am a beginner in the world of cooking.  If you have any tips, feel free to send them my way.  Advice is always appreciated.

 
 
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I am a beginner in the world of cooking.  If you have any tips, feel free to send them my way.  Advice is always appreciated.

 
 
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post #27 of 27

I hire an intern (I actually think its an externship) every couple months. Mostly from our local culinary school.

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