As economic headwinds continue, all caterers face the uphill task of managing costs while maintaining high standards. For care home operators, the challenge is even more intense.
Care homes typically operate on tighter margins than other caterers, often while facing higher fixed costs, and with greater legal responsibilities. Many residents have a complex range of dietary needs, and may be funded by local authorities who specify nutritional standards while expecting those needs to be met within a budget.
Official figures show that around 200 care homes closed during 2022, with a loss of more than 1000 beds, placing even greater demands on those that remain. More recent figures suggest that during 2023, around two care homes have closed for every new one that opened. Operators typically cite rising costs such as utility bills, and recruitment challenges, as reasons for being unable to continue.
The bad news is that things are unlikely to improve much any time soon, with economic forecasts remaining in the gloomy side despite a gradual easing of inflation, and public spending budgets expected to stay tight whatever the outcome of a General Election. Some costs can’t be controlled, and simply have to be managed. However, there are other costs faced by care homes that can, to some extent, be reduced. At the very least, it makes sense to regularly audit and benchmark such costs.
Food and drink is one such area, where there are multiple suppliers in the market, and it may well be possible to get a better price without any compromise on quality. With care homes assessed on the quality of the provision they provide, it’s important that any change in supplier has no impact on the experience of residents, so a comparison exercise needs to be carefully managed.
Lynx Purchasing has specialist experience in benchmarking prices for care home customers, often negotiating better deals with trusted suppliers, while providing the same quality for residents. Calling on this specialist support helps to relieve the administrative pressure on busy care home operators, and there are also actions operators can take themselves to improve buying discipline, including:
- Using generic or own-brand frozen products, sauces and condiments instead of brand leaders wherever possible. One good way to select products is to run a blind taste test with staff and residents to see what will work for your business without affecting menu quality.
- Plan your orders. With transport and delivery costs high, fewer, bigger deliveries are better value than frequent small ones, and some suppliers have raised their minimum order level. Place orders as early in the day as possible rather than just before the cut off, as this helps the supplier manage stock and enables operators make most of availability.
- Talk frequently to fish, meat and fresh produce suppliers to get the best value from the products available, which can change frequently. Be ready to use less popular cuts or less familiar species, which can be better value.
- With staffing costs rising, consider the benefits of asking suppliers to do some of the prep, such as filleting fish or trimming steaks to size before delivery. Balance the extra cost against time savings in the kitchen as well as reduced food waste.
- Feature better value products such as burgers, meatballs and fishcakes on menus, which are popular with residents as well as helping to stretch the budget.
For care homes in particular, cost is only part of the consideration. The nutritional value of meals is essential in helping maintain residents’ health and well-being. With the availability of trained, qualified staff proving a challenge for the care sector, this is an area where operators can call on the specialist support of suppliers.
Lynx Purchasing has arranged nutritional training for several care home customers, with a major foodservice supplier delivering practical training sessions for care home GMs and kitchen managers. These sessions focused on menu planning and food preparation, including meeting high nutritional standards while staying within agreed budgets.
For some care groups, we have developed Agreed Buying Lists, which ensures that the right products, delivering the required standard of quality and nutrition at the price agreed, are ordered by chefs and managers across the business.
Beyond food and drink, there are areas of purchasing right across a care home business where price and service level benchmarking may well deliver savings. As an example, for a multi-site care home customer, Lynx Purchasing has negotiated contracts for removal of trade and clinical waste.
As well as easing administrative pressure on the operator, the audit process undertaken by Lynx Purchasing identified an overcharge by an existing waste contractor amounting to several thousand pounds, which was recovered by the customer.
From consumables to stationery, and kitchen equipment to utilities, there is a broad range of areas where it makes sense to regularly monitor costs. Working with purchasing specialist to help get the best from the buying budget takes some of the time pressure off operators, as well as benefiting the bottom line.