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Controlling Food Costs

by Mike Holtzman
Published: 
28 January, 2009

The instability of the market in today’s economy is causing food prices to be unstable and unpredictable, and this scares many of us with food concessions at parks and attractions. In the past three months alone, I watched our vendors increase our rates by over 10%. We cannot allow this to continue.

As operators we need to find a way to maintain our operations, steady pricing, and always be vigilant on our costs. It’s important that we always think of the customer and understand what they go through when we increase our rates. Think how we felt when we saw our fuel rates rocket over the summer.

As we operate we must always be watching our daily costs. Staffing is a large key to our success, and our downfall. If we tighten our labour we can save on our costs, and keep on presenting a reasonable price to our customer. This means those “desk jockey” managers need to get back into the battle grounds to save the company, be a part of the labour and help keep our customers.

Imagine a warning label on the chests of your vendors and suppliers as they enter the room: “Operators Be Aware, Fragile.” Suppliers are looking for every reason to break into your prices. We have heard stories of their supervisors, “the big boss” behind the scenes, keying in a few more points against our prices and margins. It takes a vigilant operator to stop the suppliers from hiking your rates.

A consent watch over our prices assures a steady price. For example, do not let vendors continue adding fuel charges. If they haven’t noticed, gas prices have fallen again recently. Fight and complain every time a penny difference occurs. It shows them you are watching and you will not stand for it. The vendors will be more likely not to increase your rates in future. They will even think twice before keying in any increase because they know they will hear from all of us.

However, we must be realistic on pricing. Vendors will ultimately raise prices and we will need to deal with them. All of us need to cover our operational and labour costs. Our goal is to be profitable. If we fight, the increases will be at a controllable rate. This rate will allow us to monitor the changes and pass on a respectable increase on to our customers. We alone can not absorb these hikes, ultimatly we will see ourselves raising prices. But hopefully we can keep it at a level where having something to eat at the park is still an attractive proposition for many families

Mike Holtzman is president of Profitable Food Facilities, a US-based hospitality and consulting firm for family entertainment operations for the last 15 years. mike@profitablefood.com








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