CHICAGO - "You get what measure," said Nancy Caldarola, NACS CAFÉ education director, as she kicked off the "Foodservice Metrics: NACS CAFÉ" breakout session last week during the NACS State of the Industry Summit.
Caldarola, with more than 30 years of experience in the hospitality, restaurant, arena, quick-service and fast-casual industries, as well as foodservice training and management, shared how metrics are a key driver to any successful foodservice operation €" a concept the NACS CAFÉ program devotes significant attention.
Touching upon her hospitality background, she shared how that industry came together to create a consistent approach to accounting and financial terminology, which in convenience stores is far less consistent and therefore makes data collection and analysis more difficult.
Caldarola added that good management of a convenience store foodservice program comes from watching your systems €" consistently and accurately. Foodservice adds a layer of complexity to c-store operations because every item has a price, including the packaging. By establishing fiscal procedures, retailers can determine how to forecast their daypart menu items, reduce waste, keep track of inventory and manage their menu product costs.
A common misperception in a foodservice operation is the difference between waste and shrink. "Waste is not shrink," stressed Caldarola.
Waste includes:
- Discarded food
- Improperly prepared food products
- Spoiled ingredients or foods
- Unused leftovers
- Kitchen 'accidents€™
- Expired grab and go menu products
Shrink includes:
- Retail revenues lost through errors or failing to keep costs controlled
- Undercharged, damaged, or stolen goods
Paul Breslin, Adjunct Professor at the Georgia State University School of Hospitality, shared information he teaches as a NACS CAFÉ instructor on managing the financial side of a foodservice operation, such as using a consistent timeframe (i.e., not a calendar month) for establishing foodservice fiscal periods. He suggested these approaches:
- 13 Four Week Periods in Calendar Year; or,
- 4 Quarters: 4 - 4 - 5 weeks or 5 - 4 - 4 weeks
In closing, he shared a few key foodservice benchmarks retailers can compare to their own operations:
- Food Cost (includes paper/plastic): 28% to 40%
- Wages (all inclusive): 25% to 29%
- Supplies: 5% to 7%
- Utilities (gas, electric, water, etc.): 3% to 5%
- Waste (recorded food discards): 3% to 6%
- Net Profit: 17% to 27%
Breslin stressed that it is critical to focus on getting accurate food costs and wages as these are the two most important metrics to measuring a profitable foodservice operation.
Share your interest with NACS now if you€™re interesting in attending one of two NACS CAFÉ offered this fall in Atlanta:
- August 21-24, 2011
- November 6-9, 2011