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Sales volatility - impact on food cost

Better than expected sales levels can have a very positive impact on food cost results. Waste and spoilage will decline as safety stocks are used to create more items for sale. Employee meals cost declines as a percentage of sales as revenue increases.

Major weather events can cause sales declines. The forecast team needs to pay attention to the 5 day forecast.

If you have a great sales week and a lower food cost percentage, your gross profit can increase dramatically. These weeks can happen for many in May due to Mother's Day, Cinco de Mayo, milder weather, graduations and outdoor dining options. If managed properly, your gross profit in May can equal twice as much as in a down month like January. Ski resorts can flip these 2 months since they are busy in January and fading or closed in May.

The number one issue in tracking food cost results in volatile operations is to maximize gross profit when conditions are in your favor. Don't be content to have a good month. Try hard to achieve a great month.

Many operators are quite good at slashing staff and closing dining rooms when business is slow. Since it may be difficult to pay the bills, everything is scrutinized carefully and costs are tightly controlled.

You should have a well rehearsed plan in place to help maximize gross profit when sales are at or near peak.