So we are in untested waters and companies across the world are suffering due to almost unforeseen circumstances in the recent times. Airlines and hospitality industry are perhaps the hardest hit. Here is a Game Plan for restaurant chains that can definitely ease the situation if implemented smartly. We are going to highlight each one of them briefly, so it’s easy to implement.
- Food Cost & Menu Engineering: If not already, then immediately develop your “Delivery Friendly Menu” (items that can be easily delivered with less preparation time and good profit margin). Do a complete Menu Engineering exercise of your entire menu. Something very important is, not to only focus on low Food Cost percentage but also on high profit margins items. If your Food cost on a Steak is 50% but your margin is 50 Riyals versus a chicken item which is 30% food cost but you are just making 20 Riyals, which one would you like to sell more? Obviously the Steak because you take cash to the bank and not percentages. Instead control the other expenses like electricity, cleaning, travel and other miscellaneous items. Don’t forget to negotiate rents.
- Sales: Yes of course how can we forget “Sales”. Companies need to survive and in order to survive, they need cash. Here are some quick tangible ideas to keep those dollars coming in. Delivery, Delivery, Delivery. What’s your game plan for Delivery? Do you have the Delivery Friendly Menu ready? Cough up discounts (yes, people are looking for deals), promote online coupons, have a game plan with Food Aggregators. Promote combo meals.
- Supply Chain: Make sure you have enough supplies but not over. Par levels and shelf life assessment is important now. Your vendors and suppliers might run out of stocks, so plan ahead and plan immediately. Right forecasting is the name of the game. Cut back on low selling items, you may even remove them from the menu.
- FIFO: Obviously and very importantly maintain and strictly implement “FIFO” (First In, First Out) to make sure you are moving your old stocks first.
- Manpower: A very sensitive and critical subject. It’s time to project your human and team image that you have been boasting about in your Mission statements. Show your employees that you care for them and not only for the profits. Here are few suggestions what you can do:
- Reduce number staff by giving everyone mandatory days or weeks off (top to bottom). It’s better to suffer a little and share that suffering with everyone rather than few to suffer all of it. We have pain, let’s distribute it. That’s the spirit of “Team”. Don’t fire anyone and later celebrate the victory together.
- Take care of all your employees, especially at their accommodations (if they are staying at company accommodation). Make sure the rooms are clean, they have supplies of Sanitizers, soaps. Suggest them to maintain some distance as much possible and report immediately any symptoms in any employee. Tell them there is absolutely nothing to panic but care is of utmost importance.
- Hygiene: Make sure your staff (everyone) is wearing mask, washing hands at regular intervals, using sanitizers, detailed and regular cleaning of all surfaces and furniture in the restaurant. Make sure that that food that you are delivering or your Food aggregator is delivering is maintaining high standard hygiene.
- Ramadan: For restaurant operators in Middle East, Ramadan is coming next month and typically it’s a month of festivities, socializing with friends and families and sharing love. Guess what? All these are going to be changed this year. People will avoid crowded restaurants (if any restaurant will be crowded at all). Most restaurant prepare buffet style set up and it will be challenging this year for many reasons. If restaurants do Buffet style set up, wastage and food cost will run high. Here is the solution, instead of doing buffet, do a “Set Menu”. So have some appetizers and starters pre-set on the tables and then offer every guest a pre-set menu to choose their main course. All this for a fixed price. This way you will avoid wastage, congestions and still make money while controlling the food cost.
This time shall pass, together we will overcome it and yes we will fight back.
Kamran Khan
Hospitality Expert