2. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved CONTROLLING FOOD SALES

3. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Introduction In Chapter 2, Control was defined as “a process used by managers to direct, regulate, and restrain the actions of people so that the established goals of an enterprise may be achieved.” Revenue control is clearly an important goal of sales control, but it is not the only one.

4. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Goals of Sales Control Optimize number of sales Maximize profit Control revenue

5. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Number of Sales Consider how customers select restaurants. To be successful, a restaurant must meet a sufficient number of customer needs to appeal to a large enough market.

6. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Number of Sales Location Menu item differentiation Price acceptability Décor Portion sizes Product quality Service standards Menu diversity

7. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Location- Other things being equal, customers will choose the most conveniently located restaurant. The greater the distance from a population center, the fewer the customers a restaurant can expect to attract from that center. Having a good location is usually necessary for volume business.

8. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Menu Item Differentiation- Homogenous products or services are so similar to one another that customers do not have a preference and will purchase whichever costs less. Differentiated goods and services are sufficiently different that customers develop preferences for them. Unique menu items created for increasing sales volume are called signature items.

9. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Price Acceptability- If restaurants are alike in every way except menu prices, the one with the lowest prices will have the greatest sales volume. If menu items are price sensitive, a relationship exists between sales price and sales volume.

10. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Décor- Décor differentiates one restaurant from another. Décor that appeals to a large segment of the targeted market should be selected. Evaluate the decors of local restaurants.

11. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Portion Sizes- and -Product Quality- Portion sizes must be appropriate to a restaurant’s clientele. Large portions do not always attract the greatest number of customers. Various customer segments demand food products of various levels of quality.

12. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Service Standards- Customers select restaurants offering a type and level of service that they find appropriate to the occasion. Managers must be able to adjust some aspects of service in order to increase customer satisfaction.

13. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Optimizing Sales -Menu Diversity- Most restaurants find it necessary to have a broad range of menu items. The number and range of menu items are governed by cost considerations, available equipment, and the culinary abilities of the kitchen staff.

14. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Maximizing Profit -Pricing Products Properly- Cost is usually the most significant factor in establishing sales prices. Restaurants with differentiated products have more flexibility to change menu prices than those with homogenous products. The proper sales price for an item is that which will produce an acceptable number of sales.

15. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Maximizing Profits -Setting Menu Prices- 1. Matching competitors prices. 2. Calculating prices from costs and cost percents. 3. Adding contribution margins to portion costs.

16. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Maximizing Profits The Importance of the Menu The Menu is the primary sales tool. The five most important elements of menu preparation are;  Layout and Design  Variety of Foods and Prices  Item Location and Arrangement  Descriptive Language  Kitchen Personnel and Equipment

17. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Maximizing Profits -Sales Techniques- Many managers hold daily meetings with servers just before opening time to review the menu. Training servers to suggest various menu items.

18. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Controlling Revenue Documenting food sales Using numbered checks Checking and verifying food sales Recording revenue

19. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Controlling Revenue Documenting Food Sales – Guest Checks Help servers remember orders Give itemized bills to guests Maintain records for sales history Prove accuracy of cashiers’ work Verify the accuracy of prices charged Records for tax purposes

20. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Controlling Revenue Using Numbered Checks Padded Unpadded Signature book Concerns on using hand-written guest checks  Legibility  Accuracy

21. Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved Controlling Revenue -Checking and Verifying Food Sales -Recording Revenue “Food Checkers” Dupes Restaurant sales control sheet