When the spread of COVID-19 led to extensive stay-at-home orders in early 2020, restaurant owners across the United States knew what was coming. For businesses already operating on thin margins, losing the ability to serve diners was a devastating blow.
Many restaurants closed their doors for good, while others struggled to pivot to carry-out and delivery-only models. Experts predicted the foodservice industry would lose more than $80 billion in sales by the end of April, and there is still no end to this “new normal” in sight.
For restaurants fighting to stay open and protect their bottom lines, these tips for cutting costs during the coronavirus pandemic could be crucial.
Cut Your Hours
Since restaurants only make money when people are actively buying food, decreasing the amount of time you’re open may seem counterintuitive. As people’s habits and routines have changed during the pandemic, you may find your establishment opening at 7 a.m. for breakfast, but not seeing a rush until after 9 a.m. Maybe weekends are newly slow due to entertainment-related closures.
Cutting a few hours every day means saving on everything from utilities to labor. Closing for an entire day multiplies those savings considerably. If you feel the need to make changes, ask your staff for volunteers to see if anyone would welcome the extra time off work. Let guests know when your restaurant is open as well, to help avoid confusion.
Pare Down Your Menu
When menus get so long that they start giving “War and Peace” a run for its money, there’s a problem. An overabundance of dishes means you need more inventory to cover the breadth of offerings. You may need additional labor. Review your menu and see which items are still popular and profitable, and which could disappear without upsetting guests.
Limiting your menu may also help boost revenue. Studies show that people come to a decision faster when they have fewer options to consider. This is also an opportunity to determine which dishes are suitable for delivery and curb-side pickup. Anything that would suffer during transport can be put on the back burner until dine-in service is up to full speed.
Americans throw out a staggering 80 billion pounds of food each year – an incredible $161 billion in losses. For restaurants that don’t have a dime to spare, losing inventory can be devastating. There are three scenarios to ponder:
- Spoilage: Over-ordering or failing to track inventory levels correctly could lead to a surplus of produce. Poorly maintained refrigerators and freezers could also cause stock to spoil prematurely.
- Misuse: Whether the result of lax staff, poor training or inefficient operating procedures, many restaurants deal with negative consequences when underutilizing their ingredients. Ensure portion sizes are being monitored, use trimmings and scraps to make stock or sauces, and enact policies that maximize resources wherever possible.
- Theft: Sometimes when people get desperate, food such as steak and cheese start to grow legs and disappear. Other forms of theft – cooks eating food on the line, for example – can cut into profits and make you overestimate what you really need in terms of inventory.
Ask Vendors for a Discount
If you have a good track record with vendors, this is the time to see if they are willing to give you a deal. This could mean snagging cheaper-than-usual pricing on bulk orders or getting delivery fees waived in exchange for committing to weekly orders.
If you are partnered with third-party delivery apps, see if they are running discounts for restaurants. Many providers are dropping their fees during the pandemic to help restaurants stay afloat.
There’s a reason so many publications refer to current times as “unprecedented.” We have never been here before; it’s hard to predict the outcome. That said, being proactive about cutting costs could help save your business and continue to employ your team – these tips should help.
Author bio: Dana Krook is Content Marketing Specialist at TouchBistro, a POS solutions provider for restaurants. She focuses on sharing tips for and stories of restaurateurs turning their passion into success.