Hard times: Using data to control costs in a challenging climate

Casual dining crunch, the end of the restaurant gold rush...whatever the media want to call it, the restaurant sector is having a hard time.

Costs

Between July 2018 and June 2019, 1,412 UK restaurants had fallen into insolvency. That’s a rate of almost 1 in 4 every day for a period of 12 months. 

In a letter to the Chancellor earlier this year, a group of restaurant bosses blamed “soaring business rates, rising employment costs and Brexit-fuelled inflation” for difficulties in the sector. Add rising food prices (the fastest in six years) and declining consumer spending to that mix and it’s clear to see that things are getting tight for the industry. 

But with any difficult time for a business, there are things you can’t control, and things you can

While data might not be able to help you control Brexit, or the cost of fresh produce, it can help you to address costs in house and along your supply chain, but getting it right takes more than buying an off-the-shelf data solution. MDM software, for instance, can put all of your data in one place, but it can’t control the quality data that’s being put in – or the data that’s being left out. 

To use data successfully to make savvy spending decisions and cut costs without cutting quality, you need to understand how your data relates to the real world: the way it interacts with staff, suppliers and customers. 

For example, a simple miscommunication between an ingredient that’s being used, and the data that’s being input, could be costing you thousands.

One of our clients in the hospitality industry learned this the hard way. They were using one cut of chicken in their recipe data, and another in their ordering data. The discrepancy was costing them approximately £300,000 a year – but it couldn’t have been prevented by technology. It could only be fixed through data quality, and by implementing data governance measures that meant everyone handling their data understood the value or accuracy. 

Now, £300,000 is no drop in the ocean for any business, but for a struggling restaurant chain, it could make a big difference – and that’s just one isolated data error. There are various hotspots throughout the supply chain, where a better understanding of data can have a significant impact on costs. 

Here are just a few areas where effective data can have a big impact on cost:

Buy what you need

In the US, research found that for every $1 a restaurant invested in programs to reduce food waste, they saved $7. With data, you can see a much clearer picture of what you need to buy, and when, preventing overstock and wastage. Seasonal fluctuations, or regional tastes, can make a big difference in the long term, and can even suggest permanent menu changes that reduce waste, save costs and give your customers what they want.  

Better pricing 

Obviously, menu costing is never down to guesswork, but with effective data management, you can get a much more accurate estimation of how much dishes cost to produce and what they should be sold for.  

Take trends on board

Data can show if people are ordering dishes with a certain side, or without a certain ingredient. Avocados more popular than they were a year ago? Bacon being left out of burger orders? They may seem like minor incidents, but multiplied across every order, in every branch, and they soon add up – in which case, it could be time to look at sourcing a more cost-effective supplier for avocado, or halving your regular order of bacon.  

Not open all hours

Data doesn’t just make a difference to your food costs: it can save money and improve employee morale by helping you track peak times, quiet periods and large party bookings so that you make steps to staff branches accordingly. 

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Comma can help you get the most out of your data – and avoid costly mistakes – through our unique data consultancy services. Find out more about what we do here or call us on +44 1926 911820 to talk to us about your strategy and what we can do to help.  

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