Bartending Pay Scale
Rising Food Costs Force Restaurants to Consider Cost Control Management
Lancaster County is better known for their Amish toting country landscapes than their fine dining restaurants. It is however my home, and unfortunately I am what some may consider a “restaurant fanatic”. In a depressing return home to visit my parents last week, I was given the devastating news that 2 of the areas finest restaurants had closed their doors due to their inability to survive the rising food costs and a progressively stingy clientele. In fact, restaurants all over the nation are struggling to get through our economy’s current recession. Many intuitive owners however, are beginning to monitor their spending more closely with the hopes of retaining an edge in a desperate industry.
The recent rise in food costs have been influenced by the increased demands in other countries, our decreasing dollar value, and skyrocketing fuel costs. An analysis from the National Restaurant Association showed that wholesale food prices increased by 7.6 percent in 2007. The price of eggs, a necessity to nearly all restaurants, has increased about 187 percent in the last 2 years. In an industry where the average profit margin is only 4 to 6 percent, even the slightest rise in costs can have a negative effect on a company’s net income.
The seriousness of this situation was first brought to my attention at work. While propped behind my country club bar, a local “restaurant legend” sat down for a quick lunch before a round of golf. Being an inspiring restaurateur, I began to pick his brain as usual. After referring to my dreams of owning a restaurant someday, he interjected with a devastating comment insisting that I find another dream. He then went on to say that rising food costs have made it nearly impossible for anyone to make any money. In a recent article in the Philadelphia Inquirer, he spoke of a new scale that he installed in his restaurant to weigh the incoming fish and meat. “You really have to make sure that you’re not paying for ice and water.” Statements like this are evidence that a restaurant’s future will be influenced by a more strict approach to cost management.
Many tasks and costs get overlooked in the frantic environment of the food industry. Tasks as simple as cutting lemons can be an excellent example. An owner could scrutinize the actual cost of one type of lemon compared to another, but why stop there. In desperate times, owners are now beginning to notice the smaller more intricate effects that this lemon may have on their pocket. How the bartender cuts the lemon, or whether it is automatically offered on the brim of a water glass may now be considered.
Many new restaurant hotspots are known for their creative and progressive approach to cuisine. Fueled by inspiration, the chef’s techniques have lead to a decreasing use of written and measured recipes. Many dishes and constantly changing seasonal menus have made it nearly impossible to trace individual costs. Owners are now beginning to remember the importance of a written recipe. Years ago, most restaurants would follow a recipe card night in and night out. This old fashioned practice makes it easier to trace the costs of a certain dish, allowing the management to make accurate and appropriate decisions concerning their profit needs. This doesn’t mean that the recipe can’t be altered to meet the needs of a trendy food scene. It’s just a cost basis for them to work from. Additional items can be added or subtracted in response to rising or lowering food costs.
In a new and fragile restaurant industry, cost management has become one of the owner’s most important success factors. Personally, I can’t stand to see another great neighborhood restaurant throw in the towel. Restaurant owner’s listen up, if accounting isn’t one of your strengths, hire a cost accountant or consultant before it’s too late. If you do it now, you may still be able to obtain an advantage on your competitors.
About the Author
Colin Bell
T-Pain “Bartender” Cover