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Help/Advice with food cost

post #1 of 12
Thread Starter 

I have become the executive chef at a private club. I have been there since September of last year. For the past few months now I have been hounded over my food cost and I don't know what to tell the officers that are asking anything else besides the facts. First off, I don't know what my food cost is to begin with, if I had to guess its between 55% and 60%, which I know is OUTRAGEOUS and unacceptable.. (I do inventory every month and I keep track of what I'm ordering but don't know food sales and how they are calculating that) We have people downstairs that handle all the money and don't like to share that information with me.

 

We are open for dinner three nights a week with a full menu (very low prices and not by choice) I say this because in order for me to raise prices I have to go before a board that vote on that. With all my numbers and research stating we NEED to raise prices because we are losing money they will not agree to it. So, I have to think of something else to bring down my foodcost. Back to the schedule, dinner three nights a week. Every Tuesday night, we have a one item meal (protein,starch,veggie,bread, and salad bar) for $6.00. The first and third wednesday of the month they have stag and ladies night. Stag night: a 10oz ribeye, french fries, salad bar and roll for $10.00. Ladies night: a 8oz filet, baked potato with butter and sour cream, salad bar, and roll for $10.00. The other two wednesdays they are meeting nights where members can come and eat a one item dish for $3.00 (protein,veggie,bread,and salad bar). Every Thursday we have happy hour were they get whatever we are serving for free with a purchase of a cocktail from the bar. Usually I serve baked potato or nachos. Something small.

 

Wednesdays and Thursdays, I fill out what I used on those nights and that goes to "clearing" meaning at the end of the month I get
that money put back into the kitchen. I'm completely out of ideas on how to lower my food cost with the position I'm in. Any ideas or suggestions would be greatly welcomed! Thank you!!!

post #2 of 12

Provided you're not losing much food due to spoilage, over-preparation, etc...and no one is stealing, You're simply not going to be able to lower food cost as a percentage of sales.  I wouldn't be surprised if you're closer to 80%.

 

If I were you, and I wanted to get them off my back, I would take all of the information that I have, and present it to them cleanly.

Every item and every meal (stag night, ladies night, Tuesday night) that you know how much is charged, you need to break down those items and the cost for each one, and as a complete meal.  You can present to them, "Look. You're the ones charging $10 for food that costs $6.35 before I even do anything to it!"

 

It appears that they never intended the foodservice operation to make them money (just a convenience and a service), but now they decided that they either need the revenue, or just want it.

 

Oh, and my idea for lowering food costs is....Cut out all the protein, but have them keep their prices where they are.  If they reject that by saying they need the protein, you can tell them to chew their own arms off. drinkbeer.gif

post #3 of 12

I usually charge for this….

 

Food cost is not all about selling price, there are many factors to consider. It’s also not about telling your bosses to “chew their arms off” or “getting them off your back.” It’s about being a leader and working as a team to overcome the challenges at your restaurant. If you want to be a professional, act like a professional, if not you’ll just be a line cook.

First off is what are you actually selling? You can get this from a P-mix report. Items in a restaurant are not priced across the board at your desired food cost. For arguments sake we’ll say 35%. You will have items at a lower cost as well as item at a higher cost. By looking at you P-mix report you will see exactly what items you are selling the most of; these could be a source of your problems so check your P-mix and get an actual food cost.

Second is to ensure that your items are priced correctly. Make sure you are considering yield percentages in your cost cards. Yield is figured by taking your purchase price (as purchased or AP) per pound, case, flat etc; processing it to edible product (EP).

 

For Example:

So you bought 24 lbs of green beans and after trim and processing you end up with 22

EDIBLE WEIGHT /AS PURCHASED WEIGHT X100= EDIBLE YIELD %

 

Green Beans: 22 lb (EP)./24 lb.(AP) X100=91.7%

So what that says is although you purchase 24 pounds of green beans, after trim you only have 22 pounds. So let’s throw some numbers in there.

 

Green Beans $1.50 per pound X 24lbs.= $36 (AP)

$36 (AP)/22 lbs. (EP) = $1.636 per lbs.

 

So the green beans you paid $1.50 per lb for actually cost you 1.63 per lb.

 

Once you know the yield percentage you can use this formula:

100-91.7= 8.3…Move the decimal 2 places to the left and it is .083…put a 1 in front to make it 1.083.  Take this figure time the AP cost of the item and it will give you your true cost.

 

1.083 X $1.50 =1.6245 or rounded up $1.63. Use this cost when building a recipe cost card. This works with proteins, produce or anything else.

Recommend you purchase

The Book of Yields: Accuracy in Food Costing And Purchasing by Francis T. Lynch

As well as

Culinary Math by Linda Blocker

 

 

Third. Portion control: Ensure your cooks are portioning ingredients correctly. Pre-portioning of ingredients through the use of day bags, cardboard trays as well as portion scoops, proper sized ladles etc. will greatly help getting your food cost in hand.

 

Fourth: Monthly inventories are not frequent enough, weekly is the standard. Ensure that the same person does the inventory at the same time of day. Have your inventory lists go sheet to shelf so you don’t have to go looking for items, this will help you keep on track and not miss anything. Daily inventories of high value items (steaks, lobster tails etc. checked against previous day’s receipts) will control any pilferage. Keep your store room locked.

 

Fifth: (my favorites) These are things you can do to ensure that all product is being used as well as no product is going out the door.

  1. Buy an alarm for the back door. You can’t keep it locked because of fire but you can alarm it. Detex makes great alarms that take a key to deactivate and make a loud obnoxious noise when they go off.
  2. Remove ALL trash cans from the kitchen.
  3. Give each team member their own bus tub with their name on it for waste. When they need emptying they will need to come to you to deactivate the alarm to dump it in the dumpster and you can check to see what’s in it. Remember to check whether all usable product is being used. Onion, carrot and celery trimming for stock/soup, shrimp shells for stock/soup etc.

 

 

Hope this helps

post #4 of 12

Oh yeah one more thing when costing menu items don't just go with your desire percentage. This is just a guide. If a burger price out to be 8 bucks but your guest are willing to spend 15...charge the 15.

post #5 of 12
Quote:
Originally Posted by Nicco61 View Post

 

Food cost is not all about selling price, there are many factors to consider. It’s also not about telling your bosses to “chew their arms off” or “getting them off your back.” It’s about being a leader and working as a team to overcome the challenges at your restaurant. If you want to be a professional, act like a professional, if not you’ll just be a line cook.

A lot of good info in your post, Nicco.  The OP's bosses should read it.

My reply to her was about dealing with her specific situation, not advice I'd give to someone in a typical restaurant environment where the premise is to make money or the business is gone.

My understanding of the OP's situation is that she's not in a environment where she has any control over menu prices.  She's dealing with unreasonable bosses who have no real clue what they're doing on the food side of the country club business.

The only way to reply to their demands of "lower the food costs" (provided the kitchen is being run properly, etc), is to say "eliminate the proteins or charge more".

post #6 of 12
Quote:
Originally Posted by Samantha Smith View PostI don't know what my food cost is to begin with...We have people downstairs that handle all the money and don't like to share that information with me.

All percentages and numbers aside, the few quoted words, above, speak volumes. You can't control costs unless you know what they are and how they are calculated. The "people downstairs" aren't sharing information, in all likelihood, because they are paying off of invoices without delineating what line items relate to what costs. Simply speaking, no one really knows what your food cost is, but you should! In your job capacity you should have access to all costs. That's what separates you from simply being a lead cook.

 

It sounds like your board is either delusional or totally unaware of food costs. $10.00 for a 10 oz. ribeye dinner? You will lose money on every dinner!

 

You have to meet with the Board; use any numbers you have and point out that unless you have all the numbers, there's no way that you can reduce food costs. Call your wholesalers and cost out that $10.00 meal at real cost. Show that to the Board. then proceed from there.

post #7 of 12

Simple, no-frills approach to getting a good snap-shot of your food cost %: 1. Record all invoices for food purchases you make for a given period of time (month); 2. Find out your total food sales for a given time frame.  Purchases divided by Sales = Basic Food Cost.

 

Since you seem to lack all forms of reporting, this basic formula will at least show you, within a certain margin, where you stand.

 

Remember.....if you are responsible for the cost, you must be the last word on item pricing.

 

Good luck. It sounds like you may be dealing with a very unique set of circumstances indeed.

 

B.

post #8 of 12

First of all, I agree. The pricing does seem vary low, but that is all based on perspective and many variables, i.e, guest income rate, cost of goods, seasonality, etc... with that being said, I'd like to answer your question as precise as possible. 

 

The calculation of food cost:

Food purchases minus food inventory = $X (actual food used and money spent). Divide that number by the total food sales. That will give you a 0.xxx number. The first 2 numbers are the actual food cost. 

 

Example:

Spent $10,000 in food purchases

Have a food inventory of $2,000

Total food expenditure is $8,000

Total food sales is $32,000

Actual food cost is 0.25 or 25%

 

You can obtain food sales through your POS DSR (point of salsas daily sales repot).

 

Your actual food cost norms will vary by location and restaurant, but the national average is between 28% and 32%. For a casual eatery with salad bar you should be at the 28% or lower. More like 25%

 

This can be achieved through menu engineering, placement, wording, pricing, vendor negotiations and increased sales volume. 

 

If you'd like some additional help, PM for additional information

post #9 of 12
Focus on what you can control, reach out to other suppliers, find one with low prices and negotiate a contract to keep costs low. Cleaning your own meats is a must and buy in bulk when you get a good deal, you may also want to cut down on the grade of meats you're serving, I know you don't want quality to suffer but you must be versatile to meet the constraints put on you by the owners, or change the menu to more cost effective items like pork tenderloin or chicken. Keep an eye on invoices for price changes and unexpected surcharges and check all deliveries thoroughly. There are often times big charges if you fall short of minimum order requirements. Keep locks on your stock room and walk-ins to prevent theft and be strict with staff on waste and product consumption. These are a few things I'd look at but it does sound like your prices are ultimately the problem
Good Luck to you.
post #10 of 12
Focus on what you can control, reach out to other suppliers, find one with low prices and negotiate a contract to keep costs low. Cleaning your own meats is a must and buy in bulk when you get a good deal, you may also want to cut down on the grade of meats you're serving, I know you don't want quality to suffer but you must be versatile to meet the constraints put on you by the owners, or change the menu to more cost effective items like pork tenderloin or chicken. Keep an eye on invoices for price changes and unexpected surcharges and check all deliveries thoroughly. There are often times big charges if you fall short of minimum order requirements. Keep locks on your stock room and walk-ins to prevent theft and be strict with staff on waste and product consumption. These are a few things I'd look at but it does sound like your prices are ultimately the problem
Good Luck to you.
post #11 of 12

I have been chef at many private golf, country and dinner clubs.  Your problems are the same as all others . Mewmbers dont want to pay real cost, yet they want low food cost. This can't happen unless you do outside events. Or on Mondys and Saturday eves do private parties . Members don't want this either  50% for  a pvt club is good.  The members want to pay $6.00 thats a joke. Bet they wantt free Hors D OOurves every night at bar to. Tell the Board and the members to step into the world of reality. If you like download this and show them  .

Ed Buchanan former Chef at City club, Ironhorse CC, PB Kennel Club, St. Andrews Club, Everglades club  all Palm Beach County Florida.  Have been in business over 50 Years.

 

Good Luck  You Need IT

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post #12 of 12

Chef Dave started with the pro's solution but I say find another job because you are not gonna win against the club board specially they are not sharing an important element of the food cost with you they really don't care about the F C they want you to save on labor so you have to put more hours cut on prep labor cause now you are the prep cook then send the dish washer home early because you will be closing alone you may get home sometimes between 12 am and 2 am by the way don't forget to place all orders for the next day oh and you have to open the kitchen at 7 am thats if you are not serving breakfast . And that's what you get when  working for poorly managed food service the chef is always to blame why don't ask them how long the chef before you lasted and why did he/she leave 

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