The past 12 months have been tough on the F&B trade in the UK. Many high-profile restaurants were forced to seek rescue deals, while 922 shut their doors in 2019[1].
But it’s not because of crumbling demand. Restaurant numbers are up 16% on 2010. The chief problem is rising expenditure putting the squeeze on margins.
When your targeted profit is ultra-thin, the slightest mistake or miscalculation — anywhere across your F&B operation — can have devastating consequences. And it’s no wonder why this happens: Restaurants lack the right information to make accurate decisions quickly.
So how can F&B businesses transform a shaky 10% bottom line margin into a consistent 20%?
To begin the process, you need to focus on your Profit & Loss (P&L) and its two major expense accounts: Cost of goods sold (COGS) and Payroll. Let’s see how these are built and what can be changed.
Opportunities using Syrve next generation POS:
Typical casual dining establishment | Share of revenue spent – before POS | Share of revenue spent – after POS | Impact on margin |
COGS | 32% | 25% | +7% saving |
Payroll | 30% | 28% | +2% saving |
Rent | 10% | 10% | – |
Other | 18% | 17% | +1% saving |
Total | 90% | 80% | |
Margin achieved | 10% | 20% | +10% saving |
Figures based on Syrve global research, 2020 |
For a chain of casual dining restaurants, theoretical food and beverage costs can represent around 32% of total expenditure. But this can be reduced to 25%, as demonstrated by F&B businesses around the world using the new breed of point-of-sale system (POS) from Syrve. Here’s how it’s done …
Employee expenditure may seem too difficult to address. But with a POS like Syrve, you’ve got the right tools to lower your overall labour costs by 2-4% — without impacting quality or customer service. There are three areas to focus on right away:
With the right POS, any expenditure across your business becomes visible — from the cost of non-food consumables, through to staff uniforms, in-store repairs and IT maintenance. There’s no room for unusual, one-off costs to slip under the radar.
With COGS, payroll and other costs under control through your POS, your margin can double.
The beauty of a POS such as Syrve is that it’s all-in-one. There’s no clunky integration between ill-fitting apps and legacy back-office programmes. Instead, Syrve is designed to fit the F&B world effortlessly. It covers the nature of the business and all its nuances, so 100% of your costs can be brought under control.
Everything that moves and breathes across your F&B operation is recorded in near real-time. So you’re not waiting for your staff to complete the numbers, or an accountant to provide you with the figures. Instead, you get actionable, up-to-the-moment data that allows everyone to make the right decisions to protect your margin.
Farmer J’s story is a great example of how Syrve is working well for a fast-paced, successful business serving 300 customers an hour.
The simple answer is Yes. You don’t need to stop at 20%. Once you’ve brought costs under control, then revenue can be increased by another 5-10% just by implementing loyalty systems, lunchtime optimisation and changes in service speed and quality.
With Syrve, you’ve got all the tools on board. Just switch them on when you need them.
Discover more
Find out why Syrve is trusted by over 30,000 F&B businesses worldwide. Request a demo or find out more by contacting our UK and Europe team 020 3880 9977.
Sources: [1] ‘Thousands of restaurant jobs axed as high-profile chains endured torrid 2019’ – ITV News (4 January 2020)