The challenges facing the industry continue to mount. In the past week we’ve seen more brands announcing closures, with one casual dining brand planning to shutter 100 of its 300 outlets.
A survey by accountancy group UHY Hacker Young estimates that one in three of the UK’s top 100 restaurant groups are trading at a loss, while in the newly-published 2018 GCA Business Leaders Survey, which gauges the opinions of operators at senor level from across the sector, 54% say they are concerned about market oversaturation in the shape of too many outlets chasing customer spend.
However, in the same survey around two in three operators are optimistic about the prospects for their own businesses this year. It’s this optimism that characterises the eating out sector – but crossing your fingers and hoping for the best isn’t always enough.
To offer operators some practical support to bolster that much-needed optimism, Lynx Purchasing has published ‘The Seven Habits of Highly Effective Purchasing Teams’, an insight guide details seven proven ways that businesses can make simple improvements to their purchasing.
The first of these Seven Habits is ‘Beware The Sacred Cows’. Every business has them – the products, the dishes, and the suppliers that have always been part of the landscape. However, many years buying experience at have taught us that when it comes to purchasing, no product, ingredient, service or supplier should be sacred.
Sacred cows come in many guises. They are often premium products such as upmarket guest toiletries, certain brands of wine or champagne, a particular coffee or a named meat or poultry. However, everyday products and services also pop up in this category – from a long-standing utility provider to housekeeping’s favourite a brand of toilet paper or detergent.
The question that always has to be asked – and it is one of our first questions whenever we conduct a buying audit of a potential new customer – is are they really necessary, and how much does this choice cost the business each year?
Regularly reviewing the sacred cows in your business brings multiple benefits. You could save money on better value substitutes and discover new – and better quality – products and suppliers in the marketplace that you and your team had overlooked.
One example is a Lynx Purchasing customer in the West Country – a small group of hotels which had always used a certain brand of very expensive French chocolate for cakes and desserts.
The general manager, executive chef and food and beverage manager were all loyal to this brand which was not retailed anywhere in the UK and was only imported by two suppliers.
When they conducted blind taste tests they found that no-one could tell the difference between it and other leading brands of premium chocolate. The fact that the brand was also unknown to guests meant it had no significant cachet. The hotel changed brands and generated and annual saving of £6,000.
ACTION: Compile a list of the sacred cows in your business. Consider their value, compare prices and look around for other options.
You can download a free copy of the Seven Habits of Highly Effective Purchasing Teams from our website at https://www.lynxpurchasing.co.uk/resources/seven-habits-highly-effective-purchasing-teams/. We’ll also be looking at more of these effective habits in much more detail is a series of blogs in the months ahead.
If you want to find out more about how you can tap into the experience and expertise of the Lynx team to help you make the most of the Seven Habits of Highly Effective Purchasing Teams, email us at firstname.lastname@example.org or call 01325 710143.