As I have posted before we have had an ongoing issue with our cheese pricing. We finally got down to 1.90/lb LMPS block from US foods. We had been paying steady 2.24 - 2.28 a pound.
We are in the midst of switching companies but in the mean time I am getting ripped off by about 350 bucks EACH time we order on cheese alone.
When I talk to the rep he says he is checking with the buyer…there is a six week lag…ya da ya da. Last week I started losing my cool…he had his boss come by (the other restaurant) and talked with my husband. My husband mentioned the mnf. date is not even 6 weeks so how can it be…he didn’t know. Then my husband said what about block plus pricing…he had never heard of it…what? Do they think we are friggin idiots? He said he wasn’t aware cheese prices were dropping so dramatically in the past few weeks. HUH???
Well my sales rep sends me an email he MIGHT stop by today to talk to me…He strolls in at NOON…eats and then around 1:00 comes back to chat with me…I said what is the point of talking? I pretty much lost it…between the cheese pricing, order errors and credits from October they still I owe me I am done.
We are suppose to be 6% over their cost…I went and grabbed my 45 dollar roll of saran wrap and said you show me an invoice where you paid over 30 bucks for this roll of saran wrap and I won’t say another word. I said I am confused we have been paying the same cheese price for over 12 weeks…cheese prices are like gas…they fluctuate but mine magically stays the same. I was ticked. He had no answers or solution…
I cannot wait until we get things finished up with the new vendor…in the mean time I will continue to flush another few hundred bucks down the toilet.
It really stinks when you know you are being ripped off, but you can’t do anything about it. :roll:
The cheese suppliers are betting on the fact that you do not know what everyone else is paying for cheese so that you will not question their prices. They take advantage of you because they can.
Hopefully you all can continue to get together and post what the fair price for cheese should be, so you can better negotiate with your suppliers.
Cheese suppliers ripping off shop owners ‘just because they can’ must make you angry. Education about cheese pricing methods and facts about current trends give you the tools you need to level the playing field and get a fair price.
You guys need a place here that shows current wholesale cheese pricing and spot prices so that you can be up to speed on pricing and better negotiate with your vendors. If PMQ wants to encourage owners to visit their site, they need to aggregate information useful to you, and educate you on how to make profitable use of the information. PMQ wants to serve the industry, tell them what you want!
Anybody got links to a cheese pricing site that you can trust to give accurate prices for cheese commodities? Is there a time of year when cheese prices are typically at their lowest so you can negotiate contracts for the best price? What other methods can be used to lower cheeses costs over the long run?
Gregster, There is a pattern to cheese prices but unfortunately, unless a buyer wants to actually buy futures contracts, we are stuck with paying the currnent prices. The way it works is that big vendors like US, Sysco, Shamrock etc buy at market prices for immediate delivery. Immediate, pretty much means the following week. The goods are then trucked to the distribution center. The vendors carry a buffer of inventory of a week or two hence the the lag-time in pricing between the price they pay and when those changes pass through to us.
It is a game measured in pennies. Whether a margin measured in cents or in percentages is fair would be an interesting question, but the bottom line is that we typically pay between 15 and 30 cents per pound above what they pay.
One approach that has been useful for me to understand whether I am getting fair value is to look at the average price for the week before the product was packed and add 25 cents. If I am paying less than that I am getting a good deal.
Pricing is also vulnerable to the buying pattern of the supplier. Right now, I suspect that US foods overbought cheese a few weeks ago and is carrying more expensive inventory than the competitors are. This is typical for them. It works the other way too. US often has better cheese prices when prices are rising because their inventory is a week older.
There isn’t a cheddar cheese futures contract anymore; the cheese traded on the CME is spot call. If you were to purchase a contract you need to be prepared to take delivery of 40,000 - 44,000 pounds of cheese.
The only way to hedge our cheese prices would be to use the Milk Class III contract. That contract is for 200,000 pounds of milk which equates to about 20,000 pounds of cheese.
I am going through the same deal with our propane supplier.
When oil prices spiked, propane went way up too. I was not too suprised, energy is energy. When gas came down, propane did not, at least not for us. I called all the other companies in the area and found out I was paying twice what I should be. Called our supplier and, without identifying myself, told him I thought I was being overcharged by my supplier and was thinking about switching companies. I was transfered to a commercial account rep at corporate who quoted 1.59/gal. An hour before that, his truck delivered a load and charged me 3.45/gal. Yeah, right. I told him who I was and what they were charging me. He blamed it on the computer system. He said he would get my rate adjusted down. I told him I also expected some reinbursment since they claimed I was overcharged in error. He told me he would get in touch with the local office and arrange it.
Fast forwad a week and a day. I got a delivery, $1.89/gal, 30 cent more than quoted and 10 cents more a gallon than the chinese place 3 doors down in the same shopping center. I called local office, they did not know anything about any reimbursment and local manager is not available to discuss my rate or repayment of amounts charged in error. I called theor corporate customer service center and hopefully lit a fire just bg enough to give this guy a little heartburn.
I just want a refund of what they overcharged me before I switch companies.