News that Prestige Purchasing’s annual Food Inflation Report puts the 2012 rate of inflation for vegetables at 5.5% adds further pressure to hospitality operators already battling with your margins.
How do you react? Do you pass on the extra costs to the customer by increasing prices or take the hit on your own GPs? The latter could be particularly expensive if food inflation peaks at 2008 levels when it reached 8%.
Tighter controls beats inflation
There is an alternative to disappointing customers with price hikes or your bank manager with reduced profits and that is to ensure you apply tighter cost controls across your business.
This remedy to rising wholesale food prices is quick and easy to implement and can be done via your EPOS solution without incurring huge costs in time and resources.
Always embed watertight procedures
At GS we always recommend embedding watertight procedures around all the EPOS solutions we install for our hospitality and retail clients.
Watertight controls are the most effective way to ensure you really do eliminate wastage by tracking all the stock that your business uses. This way you have a forensic trail of what is used – and just as importantly, what isn’t, including all the reasons why!
Recording reasons why stock is wasted allows you to pinpoint and plug poor operational processes that are not as strong as they should be.
Eliminate variances with recipe control
A great example is recipe control. A full recipe cost audit for a client revealed wide ranging portion control variances – which is great for filling up customers’ stomachs free of charge but not so good for the bottom-line.
The audit helped the client make a massive saving on food costs – and actually added 3% extra to the gross profit margin, which really reduces that inflation figure and makes it a lot more palatable.
Always crosscheck suppliers prices
Similarly in another instance, using our delivery/order validation module enabled clients to crosscheck suppliers prices with pre-agreed rates. This simple process virtually eliminates deliberate or accidental overcharging.
These two examples show how EPOS is one of the best tools to help you run better businesses. If you want to discuss how we can audit your business so you can combat food inflation simply give us a call on 0800 655 6264 (even if we haven’t supplied you with your current EPOS solution).
GS Systems managing director Niels Nielsen is passionate about the power of EPOS technology. One of the EPOS industry’s most experienced and innovative experts, he works closely with many leading hospitality and retail independents and multiples.