How traditional metrics are hurting restaurant performance, and how to look at them differently to stay ahead.

A quick 3 minute read today.

Every restaurant operator I speak to is always thinking about "prime cost", aka the combined cost of food and labor.

Being that these are the two biggest costs associted with a restaurant operation, I don't blame them.

What I do believe though is that the business model has changed so much over the last few years that strictly looking at prime cost as a % is actually hurting the performance of the restaurant in so many cases.

Check out how we look at things through a new lens here.

Here are a few examples of how focusing on prime cost might be hurting the business.

1) Focusing on a specific prime cost target can cause operators to miss issues with employee workload

2) Focusing on prime cost % could cause an operator to miss a decrease in average guest spend

3) Focusing on prime cost % could cause an operator to miss a decline in cover count

Let me show you how we look at things like cover count, average spend and workload differently -> Here

ps. If you prefer to connect directly, DM me at Jim Taylor

Now here are a few ways I encourage restaurants to look at things in order to stay ahead.

1. Don't worry so much about food cost % -> Focus more on the variance between your actual food cost, and your theoretical food cost. This is important because unless you sell the exact same number, of the exact same items every week, your food cost % will never be the same.
2. Don't worry about labor % so much -> Instead, pay attention to controlling cover count, employee hours, average wage and average spend. Those 4 factors are what make up revenue and labor $, therefore they make an impact on labor %. Consider asking your management team to achieve a covers or guest spend target, rather than a labor % target.
3. If you follow any of my content, then you have heard me talk about employee workload. Labor cost % can be largely impacted by training and hiring cost, so employee retention is typically a huge opportunity. Measuring, and managing employee workload can lower stress, anxiety and burnout in a restaurant, and in turn it can dramatically lower turnover... saving thousands of dollars per year.

Lets chat about the employee workload concept... If the NBA, NHL, NFL and MLB all do it, then restaurants probably should too right?

DM me at Jim Taylor so we can have a conversation... And don't worry, I am not going to try to sell you anything.

At the end of the day, the restaurant business model has changed so much, and is changing so rapidly that unless you properly compartmentalize information like this, it becomes extremely hard to know which direction to head.

But it doesn't have to be ;)

Until next week,

Jim

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Cheers.

Oh and one more thought...

Whenever you are ready here are a few other ways I help restaurateurs every day.

• If you are a restaurant operator or owner who realizes that increased productivity, improved employee workload, and lower turnover are the only responsible ways to succeed in our industry these days... I've got you covered. Let's connect for a discussion. DM me at?Jim Taylor , email me [email protected] or you can even text me at 6047898991.

(Again, don't worry, I won't try to sell you anything.)

• If you are a consultant, or service provider to the restaurant industry and you are wondering how to create opportunity, looking to build your business in 2023, or find it to be lonely as a solo-preneur there is a spot for you right?here ?and I would love to meet you.
• Every week, my good friend Adam Lamb and I get on the mic to discuss the real side of the industry. Turning the Table Podcast is on a mission to support the industry, and those who work in it. We are always accepting applications, both for guests on the show, as well as for sponsorship and partner opportunities. DM me Jim Taylor to inquire.