The low profit margins of restaurants is a topic that has been discussed a lot and the general consensus is that operators need to focus on increasing sales volume while decreasing expenses in order to improve their restaurant's profits margins.
Fact: COVID-19 has left restaurants with limited room to increase sales
Typically, increasing sales meant bringing more customers in through:
- Shows and events
- Additional seating
Unfortunately, measures of social distanciation are not compatible with such strategies.
Offering take out orders is a good idea but often not enough to offset the room capacity losses.
How can you improve profits when sales cannot be easily increased?
First, if they have not done so already, restaurant management need to realized that better profitability In 2020 and beyond will be resulting from careful expenses control more than ever before.
Second, you'll need to identify which expenses need to be looked at in priority.
Along with wages, food cost is one of the biggest expenses in running a restaurant.
Here's a list of ideas to help you gain control over your food costs and keep them to a minimum:
- Menu engineering
- Staff training
- Employee's discounts
- Inventory management
Finally, you will need intelligent software to discover issues and prioritize which ones need to be addressed. You'll then be able to take data driven actions that will in turn yield better results.