Okay need food cost help

Alright… So we have been at this for like three years… our product cost has rarely been below 33%, I am kind of tired of having to go toe to toe with coworkers on or product cost being to high… they feel like everything is in line and can get little better (we are consistently at 36-38% product cost)… Our menu is priced out between 18 and 24% for all items… I would think a waste cost of almost 40% is a bit high…

Is there anybody who has had this problem and has anyone found a good way to find out where the “Bleed” is?

I do not think it is blatant theft,

Some tit bits of info.

On and off shift employees are allowed to get 50% off pizza based items

Full price for everything from ice cream to freezer goods

soda on shift is .25 cents
soda off shift is full price,
we prep roughly 70% of our product… (like 60# of chicken a day is cut) I think we might be wasting in prep
It used to be that a lot of our sales where full priced pizzas, lately we have been selling alot of specials… one of our best selling ones is two large two topping pizzas for 13.98
we use fairly generic yet consistent cheese it is .40 over block

Please help me to figure out where we could be loosing at?

Where do I/we start? (I’m a former active duty USMC Auditor - so there is only ONE way - IMHO)

Do you use a POS or track category sales? (i.e. pizza, chicken, subs etc?)

Do you use an accounting system, like QuickBooks, Peachtree etc? Or do you track category purchases/sales on a spreadsheet?

Do you do a physical inventory weekly/monthly?

We use QB, and break out our sales & costs on a category basis…I can do a quick physical inventory in QB & I can get a quick FC% on a daily basis…

I know my wings sales/costs s/b 40ish% while my tender FC% are in the 20ies…

So you can look at your P&L and figure out your % to see where you are out of line, based on category sales…

Even products that are used across category lines, like cheese, you’ll still develop “trends”

If your projected costs % don’t match the actual, thats where you begin to look…

If you are not weighing/scaling cheese on the pizza, that problem #1 - over-portioning an oz. or 2 adds up quickly in a hi-volume shop…

If you are now selling more high FC items, like steak, a high FC may be in order, as your gross profit will be that much greater in “real” $ vrs %…

If you are selling subs, deli meats are/can be a major over-portioning factor…

As I pointed out earlier, wings are a high FC 4 our operation, while tenders are much lower…

If you do have a thief, daily inventories will slow them down & a scale on the line is most important…

You can go even further by counting pizza boxes, making sure the boxes used = the pizzas sold & collected for - if you sell 100 12" pizza, you s/only have used 100 - not 110…those 10 extra used boxes make point to 10 pies made but not collected 4…same goes for other product containers…inventorying those items slows down a thief, 'specially when you spread the word thats why you’re doing it…

Hope that helps!

Patriots is spot on.

I’m no auditor, but I can add. Our first year was tuff as nails, of course we lost a boat load of $$s. We also lost a MGR at the end of it. A study of bloated FC is what led to it. We started with a FC of 40 - 44%, and after 6 months had worked it down to 36 - 38%. Long story short, it ended up being theft by MGR in one way or another. After losing the MGR, our FC dropped to 27% overnight. The MGR, who also purchased items from time to time, used several methods to steal:

  1. Saying $100 purchase was all inventoried and stocked, when only $70 was stocked, the other $30 went home.
  2. Product sales not being accounted for: ie 5 pizzas walk out the door without being rung up.
  3. “Excluding” sales -> Selling $100 of product then excluding those sales from the end of day, and pocketing the $$s

While portion control can be a problem with newly trained personnel, with experienced personnel its usually theft.
We’re now operating between 22 - 24% FC.

two large two topping pizzas for 13.98

Sorry Tommy, I missed that on the first run thru. Thats your problem. What’s your total cost for those 2lg2top pizzas? Oh by the way, I think +$.40 over block is high.