A Birmingham city centre AA Rosette awarded restaurant recently approached our consultants to analyse its operational performance. Using the insight provided by our food consultants, the restaurant was able to improve margins across its food offering, as well as reduce the existing margin gap.
Restaurant seeks opportunities for improvement
The restaurant had been struggling to maintain high standards of operational performance and had noticed its profitability levels were not where they should be. Without the further in-depth analysis to establish where exactly the root of the problems lay they needed outside help to identify what steps were required to bring about the necessary improvement.
Operational Review Assessment uncovers sizeable issues…
Our consultants carried out an operational review assessment. The restaurant which is frequented by local event visitors had tried to align its operation to the ad hoc nature of these local events. Unknowingly, in the process it had almost entirely lost any consistency in the procedures its kitchen staff adhered to. The precision of restaurant operations were rather poor and as such its financial projections were in complete disarray.
One of the most noticeable concerns was that the menu was not underpinned by accurate costing methodologies for its recipes. In fact, costings on the whole were being neglected and any recorded outlays were therefore unreliable for future forecasts. All of this combined was having a detrimental affect on achieving a consistent operating margin. Beyond this it was observed that there were no contracted prices for several of the restaurant’s key suppliers, resulting in extreme cost variances. The consultants also noted that, according to the POS data, sales versus production levels were entirely unbalanced.
Consultants action planning and recommendations deliver…
Our consultants concluded that better planning and financial projections would allow the restaurant to improve its sales versus production ratio substantially.
As part of the action plan they put forward, they suggested a strategic review of all key control processes. The recommendations they made were based on industry best practices and offered workable solutions to running the restaurant in a more profitable way. This included supplier cost benchmarking in order to highlight where additional saving could be made.
Another key focus was the proper training of key personnel in menu engineering and menu costing methodologies, though in the first instance the consultants made themselves available for accurate costings of the current menu. The primary aim of the consultants, however, was to make the restaurant’s operational management team as self-sufficient as possible by providing them with the tools and understanding they needed to recover what were previously lost margin opportunities.