Small hospitality businesses have a big impact on Australia, both socially and economically. In Australia, we’re famed for the vibrancy of our bars, restaurants and cafes, with small businesses contributing 35 per cent of total value added and employing almost half (44 per cent) of the industry’s one million-strong workforce. They’ve faced – and overcome – countless challenges in recent years, and will continue to do so.
Managing rising food costs, optimising operations and increasing margins are obstacles all Australian restaurants face today. One of the top causes for slim margins is restaurant ‘shrinkage’, whereby a portion of a restaurant’s inventory is lost through wastage, spoilage, breakage etc. Maintaining healthy and profitable margins is a priority for restaurant owners, especially given the slim margin for error in today’s economic climate. While expertise and diligence both in the kitchen and across the supply chain are important, there are simple ways smaller businesses can use technology to tackle restaurant shrinkage.
Tracking wastage
By now, the importance of technology in restaurants – from automated marketing to QR code menus and payment – is well known. However, it can have a huge impact on a business’s ability to track, then reduce, wastage too. A digital wastage log is a great way to get a better understanding of what is driving restaurant shrinkage. For example, are the same ingredients expiring over and over? If so, a business might need to assess the quality of their produce, the accuracy of their ordering, or even investigate alternative suppliers.
Tracking wastage lets businesses pinpoint where their issues come from. If they find patterns, they’ll be able to devise a plan to reduce them as much as possible. Waste logs were once manual, but digital transformation has revolutionised the entire industry, and can now be automated using an inventory management system or a point of sale (POS) system. Through a digital wastage log, businesses can access accurate, real-time data so they can remove guesswork and instead leverage data-driven insights.
Automated inventory management
Accurately forecasting demand, then ordering accordingly, can have a major impact in the ongoing battle against rising food costs and restaurant shrinkage. For this, a business must understand its ‘par levels’ and how much they’ll go through in each ordering cycle. Doing so manually can easily lead to human errors and mistakes in the ordering process, though. What’s more, it’s a time-consuming process that burdens small venues who are already facing labour shortages across Australia today.
Inventory management is essential in running a restaurant and can be easily automated to reduce errors and lower costs. Integrated within a point-of-sale system like Lightspeed Restaurants, effective inventory management can enable restaurateurs to reduce shrinkage. It allows them to, for example, view current stock and its value, simplify their process through real-time deductions when they sell items and replenishments when they order, minimise loss due to spoilage or even theft, and easily calculate recipe costs and understand their margins. By switching from written logs or spreadsheets to an automated inventory management system, businesses lower their risk of inaccurate ordering and replenish inventory when they need it.
When faced with global economic pressures that are impacting household spending, it’s easy for smaller Australian restaurants to think that big, bold and sometimes risky tactics drive revenue. Often, though, refining and enhancing existing processes can increase a business’s margins. From front-of-house to the kitchen, payments to shrinkage, and everything in between, technology today improves the ‘one-per centers’ – and those one-per centers can add up to big margins.
