![]() Similarly to bakeries, pizza ingredients are cheaper. Pizzerias should have relatively low COGS. If you’re regularly throwing an ingredient in the trash, or if one of your menu items isn’t selling, adjust your orders to reflect those facts.Not every new recipe is going to become the next Cronut. Don’t overbuy ingredients ahead of time.And make sure people actually want to eat it. If you’re adding a specialty treat to your display, make sure it’s not costing your restaurant an arm and a leg to make it.The key to minimizing wasted food and cash is to be aware of the market prices of ingredients, and to always make smart, informed purchasing decisions about your inventory turnover rate.It’s not like you’re making things to order, after all.Īnd if you don’t prepare correctly, you can expect a large amount of those cranberry scones, apple pies, and strawberry shortcakes to be tossed in the bin at day’s end.Īnd wasted food equals wasted cash. Sure, those sweet ingredients you bought on the cheap have a long shelf-life, but it’s rare for bakeries to keep foods for any longer than a day or so. Without a doubt, though, the biggest obstacle your bakery will have to deal with is food waste. On top of that, your bakery will typically have relatively higher labor costs – thanks to the skill, precision, and time involved in preparing those delectable baked goods in your display. Especially if you’re not paying attention. In a bakery, you’re selling your pastries, cakes, and coffees at a lower price than a steakhouse would sell its food.Īlso, since you’re buying ingredients in bulk, any large change in an ingredients’ market price could have a large impact on your margins. Low food costs may sound more delicious than icing on a freshly baked cinnamon roll.īut in the restaurant world, there’s no guarantee it means your restaurant will be profitable. Does this mean your restaurant will be more or less profitable? It takes a bit more for flour, chocolate, and sugar to break the bank. Large, inexpensive orders of non-perishable items mean low costs. Unlike other restaurants, the majority of the ingredients bakeries routinely order are fairly cheap. It’s usually around the low 20s, but sometimes even as low as the mid-to-high teens. Generally speaking, bakeries should – and tend to – have the lowest COGS. This way, you’ll never pay a premium to your suppliers. If you’re running a fine dining restaurant that’s committed to fresh, locally-sourced produce, make sure you constantly stay on top of market prices.Plus, in fine dining, your labor costs can be a bit lower – it takes skill to cook a steak, but not necessarily a lot of time.īut if you find and leverage the profit-boosting and cost-cutting opportunities in your restaurant, you’ll reap the rewards. So though you paid more for it, you’ll make more, too.Īlso, diners at your restaurant are enjoying a nice night out – and are much more likely to sip from one of the wine bottles adorning your shelves or a craft cocktail from your bar.Īs long as you’re managing your bar the right way, this will keep the cash pouring in. There are many ways you can make up for higher food costs.įor starters, you’re going to be able to charge a whole lot more for that delicious cut of meat than a local diner would charge for their standard burger and crinkle-cut fries. You’ll have nicer cuts of steak, farm-to-table produce, and top-of-the-line ingredients. If you’re running a fancy white tablecloth establishment, you won’t be buying the same ingredients as that local diner across town. Most obviously, the actual food purchased costs more. The ideal range is in the mid-to-low 30s. In general, fine dining restaurants are going to have higher COGS than most other restaurant types. So, we’ve got lowdown on how to take a restaurant that’s seeping in the red and burst it into the green – all by helping you understand the ideal COGS for your specific restaurant.īecause, at the end of the day, we know managing your restaurant’s costs and cash flow is far from simple.ĭownload the full guide here, or read it below. ![]() They all have their own specific demands and considerations to take into account.įood Costs can range anywhere from low 20s to high thirties, with an average range of 28-32%. And neither are their routes to profitability. You need to know what’s good for your restaurant.Īfter all, no two establishments are exactly the same. Speaking in general terms isn’t always good enough. It’s the secret sauce in your restaurant’s recipe for success.īut lately, we’ve realized our constant advice on lowering your food costs and managing your COGS isn’t as specific it needs to be. You know finding your ideal COGS (cost of goods sold) is vital.
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