When it comes to restaurant profitability, Peiso are the experts and we recently had a conversation with them to ask about pricing and what the general trend is today.
Have you put your prices up?
- Across the board businesses have had an increase in COGs of at least 10%.
- That is equating to at least a 3% decline in profitability versus just the start of the Financial Year.
So, what are your options?
Portion sizes – what impact would an adjustment to your proteins make? What can you cut down on? Are you over portioning when busy?
Recipes – how can a new recipe for the same menu items reduce your ingredient cost?
Wastage – it’s more important than ever to focus on reducing this as much as possible.
New menu – when was the last time you assessed your menu? This is a great opportunity to look at what is selling and isn’t, and to remove items that are priced out of consideration.
Price Increase – so often, price increases go unnoticed, and owners lament they should have done it earlier. Every customer knows first hand how much more expensive their weekly shop is. What are your highest selling items? What can they bear?
Menu Design – is your menu designed for add-on sales? We must maximise our revenues by selling more to the customers we already have. An extra $2.50, an extra $5 has a very high profit margin, as everything other than COGs is already paid for.
The key is that if you do make any changes… be sure to do a stocktake. It could take months (three on average) for changes to wash through and show up in your PnL. The clear indicator is though, that something must be done. Your profitability depends on it.
