food cost goals

[jeff_8]

My place is a full service dining with primarily pizza, pasta, calazones, sandwiches, salad with very little delivery or carry-out. my question is was is a typical food cost % should I be aiming for. We are currently running and avg of 25% should I be lower.

Thanks in advance for all your help.

 

[cowtown]

I run 25% buying the best of everything on a DelCo. I expect to drop that a few points next year after doing some menu analysis with the help of Big Dave’s FoodCostPro.

 

[Patriot_sPizza]

don’t get caught in the “food cost” % trap…

you can’t take %'s 2 the bank…

you can only take $$$ 2 the bank…

I’d much rather run a 37% F.C. and take $100K 2 the bank than run a 25% F.C. and only take $35K 2 the bank…

Focus on volume and being a well run operation…

 

[system]

Patriot'sPizza:

don’t get caught in the “food cost” % trap…

you can’t take %'s 2 the bank…

you can only take $$$ 2 the bank…

I’d much rather run a 37% F.C. and take $100K 2 the bank than run a 25% F.C. and only take $35K 2 the bank…

Focus on volume and being a well run operation…

If you are not focusing on your bottom line you are an idiot. Plain and simple.

However, if you are not also focusing on your food costs you are an idiot.

To be a “well run operation” you need to focus on everything. I assure you, if you are currently not focusing on food costs that I can come in and lower your costs by at least 5% and that 5% will be a straight addition to your bottom line.

I can’t even count how many pizza places I have analyzed whose main reason for struggling was that they only focused on one thing at a time. Your focus should be your bottom line, not ust volume, not just food costs, not just labor %, etc. All those are components of your bottom line and you need to constantly monitor them all. Leaving any out is stupid.

 

[royster13]

Obviously you must come up with a target for food cost, however, that must be based soley on your product, customer base, pricing rather some industry standard…Also, you must put a system in place (scales, portion cups, etc.) that will allow you to be consistent…An inventory at least every week is a must…If you sell a premium product I suspect your food cost and selling price will be higher than average, however, your labour cost should be some what less…

 

[system]

25% ???
DOES THIS INCLUDE BEVERAGES?
HOW ABOUT CONTAINERS,DISH SOAP,NAPKINS,LINENS,AND ALL THE OTHER STUFF YOU NEED TO GET YOUR PRODUCT TO THE CUSTOMER?
IF I JUST COUNT THE FOOD I AM AT 25-27 % I AM A FULL SERVICE SHOP
WITH PIZZA ALSO

 

[NicksPizza]

Patriot'sPizza:

don’t get caught in the “food cost” % trap…
you can’t take %'s 2 the bank…
you can only take $$$ 2 the bank…
I’d much rather run a 37% F.C. and take $100K 2 the bank than run a 25% F.C. and only take $35K 2 the bank…
Focus on volume and being a well run operation…

My pizzas run about 20% to 30% with most being around 23% to 26% with just food. Add boxes, sauce cups and deliver costs, then we are closer to an average of 27% to 29%.

Two things are important in menues and priocing . . . food cost and profit contribution. One of my worst food cost ratios is my 16" “Train Wreck Pizza” that has 20 full measure toppings at $26 with 38.6 food cost. HOWEVER, it contributes $15.96 profit on every unit sold. I’d go up to 40% food costs if I could sell more of them!!

I get good margin on most everything else, but I keep an eye on contribution margin of the higher priced items and ease the retail price back a bit to make them more attractive . . . . because I make a good chunk on each one I sell, I don’t have to make the thinner food cost %.

 

[system]

PRRROOOFFIIT DOOOOLLLARRR$$$$$$$
i sell a 20 oz ribeye steak @ 19.95.
net profit of 12.00,per person
cogs 40%
i sell tons of ribeye

 

[j_r0kk]

Jeff_8 writes:

My place is a full service dining with primarily pizza, pasta, calazones, sandwiches, salad with very little delivery or carry-out. my question is was is a typical food cost % should I be aiming for. We are currently running and avg of 25% should I be lower.

Thanks in advance for all your help.

Jeff… one option would be to run an ideal food cost. As you can see with previous posts, you can, and will, be all over the board with different percentages because everyone’s product-mix and pricing is different. However, in your case, if you truly want to know exactly what kind of food cost you should be running at your store, you’ll need to run an ideal. It’s simple to do although tedious and lengthy, especially with no POS system.

If you don’t have a POS system capable of calculating ideals then you need to figure it out manually. For example:

14" dough patty… .31
14" box… .37
sauce… .12
cheese… .85
pepperoni… .27

In this example, the food cost for a large pepperoni is $1.92

What you would have to do is sit there with orders for a specific night and calculate how much you should’ve spent ideally on each and every one. Add all costs together so that you’ll have an ideal usage for the entire day. F% = Food $ / Net Sales

Hope this helps. -J_r0kk

 

[system]

DFW:

Patriot'sPizza:

don’t get caught in the “food cost” % trap…

you can’t take %'s 2 the bank…

you can only take $$$ 2 the bank…

I’d much rather run a 37% F.C. and take $100K 2 the bank than run a 25% F.C. and only take $35K 2 the bank…

Focus on volume and being a well run operation…

If you are not focusing on your bottom line you are an idiot. Plain and simple.

However, if you are not also focusing on your food costs you are an idiot.

To be a “well run operation” you need to focus on everything. I assure you, if you are currently not focusing on food costs that I can come in and lower your costs by at least 5% and that 5% will be a straight addition to your bottom line.

I can’t even count how many pizza places I have analyzed whose main reason for struggling was that they only focused on one thing at a time. Your focus should be your bottom line, not ust volume, not just food costs, not just labor %, etc. All those are components of your bottom line and you need to constantly monitor them all. Leaving any out is stupid.

---

I did not read this as not focusing on the food cost. I read, don’t go bottom line, pay more, generate more. Higher quality, higher return on customer base. Some have this silly theory if they cut costs and impact quality, they are ahead of the game. Not so in this industry. Be the best, the freshest, the most unique and if it costs more on your bottom line, you’ll eventually be ahead of the game.

Additionally, hypothetic I read that because their food cost was a little higher, they did a 5K Friday as opposed to a 3K Friday and banked more in the end.

no idiot there!

 

[jeff_8]

No this is strictly food. I have a separate inventory for Beverage. It does not include any type of paper products.

 

[DFW_PizzaMan]

Some have this silly theory if they cut costs and impact quality, they are ahead of the game. Not so in this industry. Be the best, the freshest, the most unique and if it costs more on your bottom line, you’ll eventually be ahead of the game.

I don’t know if I could possibly disagree more. There is a reason why Papa John’s, Pizza hut, Dominos, Caesars, etc are ahead of the game. It is certainly not because they are the best, freshest, or most unique.

This game, conceptually, is very simple. To succeed you must deliver value to your consumers. Value is open for each market though. For some, value may be best value for gourmet for example.

Having the best product is rarely going to get you squat except from some pizza junkies like myself. Most consumers, would rather pay $5 for some Mia Pizza crap than $15 for the good stuff. The numbers those places pull in do not lie.

To compete with the big boys, you MUST understand your market and provide what is being asked. Do not try to force the “best” product down their throats.

I try to provide very good pizza for $8-$9. I cannot do $5 and be profitable. If I provide the best I will be out of business like everyone else who sells high end pizzas around here.

 

[NicksPizza]

DFW PizzaMan:

This game, conceptually, is very simple. To succeed you must deliver value to your consumers. Value is open for each market though. For some, value may be best value for gourmet for example.

Here’s the rub, to be sure! We promise our customers that we will provide the best quality ingredients and products we can afford. If they let us charge more, then we will provide higher end ingredients.

We have all to play the precarious balance of price and cost to survive in any market. California shops can play the organic, free range, non-steroidal, anit-oxidant, sugar-free, gluten-free products at the high end, but not here in Grantville, Georgia.

Know your market . . . I mean intimately . . . meet their needs, and they will flock to your place.

 

[DFW_PizzaMan]

NicksPizza:

DFW PizzaMan:

This game, conceptually, is very simple. To succeed you must deliver value to your consumers. Value is open for each market though. For some, value may be best value for gourmet for example.

Here’s the rub, to be sure! We promise our customers that we will provide the best quality ingredients and products we can afford. If they let us charge more, then we will provide higher end ingredients.

We have all to play the precarious balance of price and cost to survive in any market. California shops can play the organic, free range, non-steroidal, anit-oxidant, sugar-free, gluten-free products at the high end, but not here in Grantville, Georgia.

Know your market . . . I mean intimately . . . meet their needs, and they will flock to your place.

That is the exact point I was trying to make. In GA, they want one thing, in Cali it is something else. In Chicago, if I sold what I sold here, at any price, I’d be out of business. Know your market.

 

[system]

Great discussion here! I don’t mean to be flippant (sp), but how exactly do you determine what market you are in. By that, I mean, I have many customers who love a large 1-top for 9.99. By the same token, I have several that dont’ bat an eye when paying full price for a specialty pizza. I would say most of my competitors cater to the lower price end (DOM, Snappy, Pizza Hut, and Papa John’s). I guess I have been following their lead in a matter of speaking. Perhaps there is a niche for a upscale “gourmet” pizza, but I am not sure how I would determine that. I do have planned to introduce a “pizza of the month” which will be something the other guys don’t do, and more expensive. I’ll see how that does. Anyway, love the board and thanks to all for providing so much useful info.

Best wishes,

Bob

 

[goomba]

Hello Lil, If you have a 5 k night @ a bad food cost vs a 3 k night w an average to good food cost then it would and I’m sorry to be so blaten be idiotic to choose the ladder.Why would you want to bust your butt all night and not make a great profit?
just food for thought,Niccademo

 

[NicksPizza]

Pizza Bob2:

Great discussion here! I don’t mean to be flippant (sp), but how exactly do you determine what market you are in. By that, I mean, I have many customers who love a large 1-top for 9.99. By the same token, I have several that dont’ bat an eye when paying full price for a specialty pizza. I would say most of my competitors cater to the lower price end (DOM, Snappy, Pizza Hut, and Papa John’s). I guess I have been following their lead in a matter of speaking. Perhaps there is a niche for a upscale “gourmet” pizza, but I am not sure how I would determine that. I do have planned to introduce a “pizza of the month” which will be something the other guys don’t do, and more expensive. I’ll see how that does. Anyway, love the board and thanks to all for providing so much useful info.

Best wishes,
Bob

On another thread, a forward-thinking owner mentioned being a “solution” for a contractor looking to buy pizzas for their venue. He beat out a competitor who wwas selling for like $5 a pie . . . . and this innovative owner was getting MORE than his full price.

Find out what it is that people WANT or NEED and sell it to them. You find out what your market is by asking them, marketing experimental ideas, seeing what other businesses are selling, seeing what works well in other markets and trying it out, etc. Often times, letting people know they need something is reason enough for them to try it.

Your pizza of the month idea could get people thinking outside the crust and seeing you for more than the next economy pizza guy. You may find the next brainstorm that turns your shop into a blazing glory. You might even find you can provide a mainstream, moderate priced pepperoni pie for those who want it . . . AND some fancier fare for those who want more uncommon tastes and flares. You could be a pizzeria for real.

Remember that Sheep follow the herd and remain part of the herd. It is most often the ingenious, new-thinking, creative and playful that have separated themselves from the herd and had flamboyant success. Donald Trump, Bill Gates and Steve Martin were not doing what everyone else is doing.

 

[ADpizzaguy]

the big three have really ruined the market with their 5 dollar pizzas and their 10.99 larges with five toppings. They have ruined the value of a truly good pizza. They sacrifice quality for quanity and the consumer ends up getting a good deal but a poor product. Luckily though, there are still some pizza lovers out there who are willing to pay a little extra for an excellent pizza.

 

[Patriot_sPizza]

ADpizzaguy:

the big three have really ruined the market with their 5 dollar pizzas and their 10.99 larges with five toppings. They have ruined the value of a truly good pizza. They sacrifice quality for quanity and the consumer ends up getting a good deal but a poor product. Luckily though, there are still some pizza lovers out there who are willing to pay a little extra for an excellent pizza.

“ruining the market” or a poor operation - both exist - the key is to serve your market not your ego…

I use All Trump flour, Stanislaus pizza sauce, I blend my cheese w/Grande and serve am 18" $9.95 pie - is that “ruining the market” or am I “serving” the needs…

A friend of a friend of mine bought a shop late last year…charges 40% more than I do…has a nice, clean place - decent product (not as good as mine, of course )…uses a deck oven…is in a strip mall…similar neighborhood…etc.

He is not grossing/netting enough to pay his bills…

who’s “right”

 

[system]

You are correct Patriot. We are in a race to the bottom. Pretty soon it will be $1.99 for a large cheese & Pep, and someone will gross a ton, but the grosser thing will be the net, or lack thereof. Our race to the bottom is turning into a death spiral!