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Restaurant Purchase Power

The Problem: How to reduce food and supply costs in restaurants.

A problem that most restaurant operators worry about most is: how to reduce food and supply costs in restaurants. This has been and always will be an issue for most restaurants because they are always purchasing products. And because of the volume of their purchases, it is very difficult to keep track of everything they are buying.

Here are 7 steps to reducing your food costs (and other supplies) from distributors.

1 – Trust – as in, trust your distributor sales representative.

Restaurant Business TrustBut verify. In other words, don’t trust them blindly. Keep in mind, foodservice distributors make their money off of markups on products. The more they can charge you, the more money they make.

Also, they have a lot of people supporting their sales team. These people are looking at everything they sell and making sure they get the most money they can out of everything they sell.

A lot of restaurant operators think their sales representatives are working for them. They build close relationships with these people over time. But the sad truth is, those same sales representatives are paid based on sales commissions. And those commissions are based on the amount of money they can make off of their best customers.

As a restaurant operator, your best option is to trust, but verify. Have other sources you can turn to to check prices. It’s also wise to make friends with other restaurant operators and share prices with them. 

2 – Brands – don’t buy private label brands just to save money.

This will impact the quality of your foods overall, and your consistency. When thinking about how to reduce food and supply costs in restaurants, operators will be tempted to buy a private label product. This is because private label items are cheaper. And if you listen to a distributor sales representative, they will tell you it’s the exact same quality as the branded items.

This isn’t true, of course. Private label products change from time to time without notice. So, you never know what’s in the box or where it came from. My advice: stick with branded products as much as possible. It’s the only way to know you’re getting the consistent quality your guests have come to appreciate.

 3 – Menu Design services

Never sign a contract that includes your distributor doing your menu with a commitment to purchase attached. You might think you’re saving money, but you’re not. You might also think they are experts. But they are not. You might also think they have your best interests at heart. They don’t.

If you’re looking for answers to how to reduce food and supply costs in restaurants, getting a ‘free’ menu from a distributor is exactly the opposite thing you should do. Your distributor is not giving you anything for free. They are using the menu services to leverage higher profits and to lock you into buying a disproportionate amount of products from them.

It’s a way to get you to stop shopping on price. And most importantly, it’s their way of getting you to give up your purchase power.

4 – Social Media Services

Make FriendsDo it yourself, or better yet, hire someone you pay directly to do it for you. Do not rely on your distributor for that ‘service’. It’s not a service, it’s a way to lock you into higher prices. If you’re looking for the best answers to how to reduce food and supply costs in restaurants, again, getting services from a distributor is the last thing you want to do.

I can’t emphasize enough that foodservice distributors are not your partners. They are selling you products, and the best way for them to make a higher profit off of your restaurant is to lock you into support services. These services are all based on their getting a higher percentage of your business. And that comes at a much higher cost to you.

5 – Comparison Shop

Check your prices now and again. Distributors do not want you to do that. They hate it when you do that. But it’s the best way to make sure you’re not overpaying. 

If you’re looking to answer the question about how to reduce food and supply costs in restaurants? Shop around. It’s fine to make a contract with a distributor. But place your account into review from time to time. And when you do, know that the competitor is going to be looking for ‘lost leaders’. These are items they can lowball in order to get a higher return on other items they are selling you.

6 – Join Social Media Groups

Social media is a great place to join groups and talk about what people are paying for their products. Talk, compare, and get leverage.

Here are a couple of groups that you can join and ask for advice on purchasing power in your restaurant:




7 – Pay Attention To Inventory

Spend enough time looking at your inventory, and compare that to sales. Shrinkage and spoilage are two problems that can be solved with the right attention to detail. This is another great way to understand how to reduce food and supply costs in restaurants. Restaurant Owner is a great resource for getting advice and education on inventory control.

Mark K. LauxIf you need help coming up with ideas on how to reduce food and supply costs in restaurants, build a better menu, or develop a restaurant marketing plan, give us a call! Mark Laux can be found here: http://www.hotoperator.com/contact-us/