Andrew Parsons MIH, Head of Sales – Pelican Group Purchasing, shares the top eight tips that will help hospitality operators to mitigate price increases and gain more control over spend
Andrew says; “We understand the complex journey many hospitality operators face every day, and as the cost of living crisis, Brexit and recruitment challenges all continue to bite, we offer some timely tips on what changes can be implemented now to help make a difference:
1. Centralise purchasing
Regardless of whether you’re running a single site or multiple location operations, having a centralised procurement system that can be accessed by management, chefs, and finance is the key to keeping costs under tighter control. It will provide a single source of truth on what is being spent and on what, giving you far more data and intelligence on which to make decisions or changes.
Don’t forget that all Pelican clients are able to use our own in-house eProcurement system Pi, free as part of our service offering.
2. Conduct a review of products
Environmental awareness amongst UK consumers has surged, with 85% now making more sustainable lifestyle choices, according to Deloitte’s latest 2021 Sustainable Consumer research. Consumers seek out food and beverage products that have a positive impact on their health and the planet.
3. Consolidate suppliers
It is not uncommon for many operators to have multiple suppliers in place. Savings can however be made by consolidating to a smaller group of suppliers, or even to a single supplier if appropriate, in order to achieve efficiencies of scale and improve drop size. Our team will manage this for you.
4. Deliveries
With fewer suppliers, you may be able to reduce delivery volumes which reflects in prices. As an example, I am working with a hotel at present and have been able to reduce deliveries from 28 across a 7-day period, to 21 without compromising quality, matching 100% of the basket and reducing cost. This also has a positive sustainability impact, fewer trucks coming up the drive has to be a good thing!
5. Price tracking
Are you paying the right prices? Instead of mundane manual checks, you should use an online system that can automatically check every product line against agreed contractual prices to ensure that there are no discrepancies and that what is being invoiced is correct.
Also, do you currently do a daily ‘food flash’? Tracking what is being purchased and delivered each day, versus what is going out gives you a barometer to monitor gross profits. You can track this manually, however, if you’re using a system like Pi, it will do all of this for you automatically.
6. Reduce administration
If you are able to help your team reduce the time they are spending on administrative or manual jobs, it means they can concentrate on what they are there to do. Working in a more centralised, transparent way will, in a small part, help to boost team morale.
7. Review menus
How often do you review your menus or menu engineering? Do you know how much profit you are making on individual dishes? How do you ensure that any retail price adjustments are timely made to your menus? We work closely with clients to support menu creation and our Pi tool automatically calculates theoretical gross profit- based spend versus retail price on each and every dish.
8. Control stock, portions and wastage
If you’re able to control stock, portions and wastage, you can make great strides in improving your margins. Our online menu and stock management modules work together to provide accurate costings while tracking stock usage, wastage and transfers. It will also help to ensure you are not over-ordering and having to store – and pay for – stock unnecessarily.
As Henry Ford was famously quoted as saying:
“If you always do what you’ve always done, you’ll always get what you always got”… and I for one believe that it is important for us all to take stock and consider what changes can be made operationally today, which will support the business during this difficult period and moving into 2023.
