Restaurant supply chain shortages. Our guide to survive.
Restaurant owners, as if the last few years weren’t tough enough, now you’re dealing with supply chain shortages.
This is a severe blow, especially after dealing with COVID-19 and frequent changes to government mandates which directly affected business. And let’s not forget about inflation impacting the price of your raw ingredients, food supplies and overheads too.
So supply chain disruptions are a real kicker. And you might be wondering why there is a supply chain shortage.
Shortages in the supply chain have been caused by several factors, although most relate back to labor shortages. The same staffing challenges you’re experiencing in your restaurant are also being felt by others in the chain.
And because staff simply aren’t available, manufacturing has slowed down and distribution is delayed. It has a knock on effect that leads all the way to you. The restaurant owner.
So, what can you do to mitigate supply disruptions? Keep reading, as we’ve got some practical solutions for supply chain shortages.
Strengthen communication with your suppliers
Now’s the time to step up your food supplier relationships. And it all starts with good ol-fashioned communication. Pick up the phone or invite them around.
Ask them about foreseeable supply chain shortages and any other challenges. Make them aware of the impact of supply chain shortages on your business. Have a real conversation and share what part they play in your restaurant’s success or downfall. Remind them of what you need from them and what expectations you have.
Related blog: Supplier relationship management. We’ll show you how
Increase your pool of suppliers
While in the past, you may have sourced your restaurant ingredients and supplies from a small pool of suppliers, now that there are supply chain shortages, you need to expand that pool. You can no longer afford to go to a ‘one stop shop’. Why? Because having a larger group of suppliers you can call on, means you’re less likely to have product shortages. What one supplier can’t source, perhaps another one can.
It’s about spreading your risk and doing all you can to obtain the items you require.
Related blog: What to look for when selecting your food supplier
Focus on profit
Take a look at your menu and work out which items generate the most and least profit. Then, be brutal. Cull those loss-leading items. You know, the ones which absorb too much time to prepare or don’t bring you enough bang for your buck.
Instead, focus on profit-generating menu items and promote them. ‘Chef’s special / dish of the day’ are easy ways to entice diners towards those higher profit items. You can also redesign your menu so the dishes with the highest profit are at the top of each section.
Related blog: 3 tips to help you boost your restaurant profit margin
Create a flexible menu
There’s every chance one (or more) of your ingredients won’t be available due to supply chain shortages. So, now’s the time to get creative in the kitchen and create a flexible menu. One which allows you to use a substitute ingredient while not substantially changing the dish, or impacting on your profit margin. Consider it more of a tweak.
You could also create a ‘back up’ menu for those times you can’t substitute ingredients. Position it as ‘chef’s special / dish of the day’ and watch it fly out the door.
And hey – if KFC can use cabbage instead of lettuce, you can find ways to be flexible too.
Tighter control on your expenses
Trim the fat from your expenses. And there’s always something to trim. Look at all areas of your business including the raw ingredients, labor, rent and utilities, marketing and miscellaneous costs. When you tighten your expenses, you’ll have a greater chance of maintaining profitability and weathering the supply chain shortage.
Related blog: How to manage your restaurant monthly expenses
If managing your expenses sounds a little difficult, Pricebook can help you track your restaurant expenses. Pricebook spots product price changes and saves you precious admin time.
It works by comparing prices between your supplier invoices using automated technology. Simply take a photo of your invoice or email it through and in a matter of seconds Pricebook will highlight any price changes since the previous invoice. With this information, you’ll be in a better position to manage your expenses.
Related blog: How to get started with Pricebook
Creative ways to navigate supply chain shortages
While your restaurant may have been impacted by supply chain shortages, there are creative ways you overcome disruptions. From suppliers to your menu, to profit and expenses – including a helping hand from Pricebook- focus on what you can practically influence.
Want to know more about Pricebook? To find out more contact us today.
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