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Restaurant Inventory Management: 4 Ways to Maximize Restaurant Profits

- June 15, 2021 Written By: Krista Dinsmore

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Are you looking for ways to improve your restaurant’s profitability? Did you know that improving your food and beverage inventory management processes can help your business to garner better profit margins?

Most restaurants know the industry standard of what a pour cost or what food cost should be, but most of these businesses don’t know what their ideal margin is. Without this information, your restaurant really doesn’t have visibility into how profitable your inventory could be through better management and more strategic decision making. 

To gain true visibility and control over those margins, it’s crucial that you use restaurant inventory management software to gain insightful data points that help your business to truly maximize its profitability. 

In this blog, we summarize a video from Sculpture Hospitality consultant, Patrick Cottrell, as he discusses how to get the most out of your food and beverage inventory to make your restaurant more profitable.

You can watch the video here:


1 - Focus on your menu 

To maximize profits in your menu, it’s crucial that you have the data to understand what sells and what doesn’t. All too often restaurant owners don’t think about the sales data, they just want to create incredible dishes and fancy cocktails - but if these menu items aren’t selling well then it’s damaging your profits.

Focusing on the menu items that sell well, as well as the specific product brands that sell well, will help your business to optimize its profits. Gaining visibility into the items with the largest margins that sell best is key to profitability.

Gain insights into your inventory profit margins through pour cost and food cost inventory data. 

2 - Understand that inventory is your investment

Your entire restaurant simply must understand that your food and liquor inventory is your company’s investment into profitable growth. Your inventory is an asset, and everything from pour habits to maintaining stocked goods will impact how profitable your business is. 

To truly maximize your profits, your employees need to 100 percent understand and manage your inventory effectively. If you're using more inventory than you’re selling, then your profit margins are getting slimmer and slimmer. 

Your restaurant should implement an established inventory management system that accurately measures your assets and predicts profitability. 

3 - Build strategic ordering processes

Overpurchasing uses up your restaurant’s cash profits, and typically leads to issues such as product spoilage and deadstock that eat into your margins even further. By focusing on the actual used product vs what's on-hand in your restaurant, you can use insightful inventory analytics to find out your periodic automatic replacement (PAR) level - the optimum amount of inventory you should have on hand at any given time. 

This method helps you build a strategic and data-based approach to ordering inventory. 

4 - Gain visibility into how your food inventory is performing

The industry average rate of inventory shrinkage loss typically stands around 20 to 25 percent. Food is one of the highest costs for most restaurants, yet many still have no visibility into where they are losing products through lost inventory.

It’s time to get on top of that data to find out exactly where you are losing inventory, and what brands are experiencing more loss. You can then use that data to educate your employees in inventory best practices that will drive up your profit margins. 

Food Cost eBook

How can Sculpture Hospitality help?

Along with our innovative restaurant inventory management system that gives your business insightful data to optimize your inventory, our team of expert, and locally-based, consultants are able to work with your team and provide them with analytical reports to help them minimize loss opportunities and tighten up your inventory operational processes for greater yields. 

We have a variety of service levels for every single restaurant and bar budget, which can be fully customized for your company’s unique needs. 

Want to learn more? We would love to answer any questions you may have. Get in touch with our team today!

Contact your Local Inventory Consultant Today