We’re now a quarter of the way through 2018 and it’s clear that, for now at least, the market isn’t getting any easier for anyone.
A new survey by accountancy group UHY Hacker Young shows that profits at the UK’s Top 100 restaurant groups have fallen 64 per cent in the past year, from £345m down to £125m.
While independent operators face the same challenges as the big players, they also have the advantage of flexibility and agility, able to make changes quickly. As we continue to highlight the benefits of good buying habits, that flexibility can make all the difference,
Lynx Purchasing’s new insight guide, ‘The Seven Habits of Highly Effective Purchasing Teams’, details seven proven ways that businesses can make simple improvements to their buying.
As we move onto a look at the second habit, ‘Keep it strictly business’, we’re emphasising the importance of knowing where the lines are drawn in the way operators work with their suppliers. Although good businesses need strong and cordial relationships with suppliers, getting too close and cosy is just a step away from complacency.
If you’re too close to your suppliers, you may not be asking the right questions. Do you know how many suppliers you use, and when did you last compare their prices with those of the competition? Do you even know which alternative suppliers are out there?
Trust is essential to the purchasing process, but there is no substitute for good housekeeping practices – or added value services. Every supplier can give you a management summary itemising what you buy and the prices paid.
A supplier who values your business – and is doing all that it can to keep it – should also be providing you with advice or insights into the market, sharing knowledge and providing product workshops or access to producers and product training.
In ‘The Seven Habits of Highly Effective Purchasing Teams’, we quote the example of one of our customers, a long-established independent restaurant which had had used an excellent fresh produce supplier exclusively for many years.
However, staff were gradually ordering more and more products from the same supplier, who’d delivering a vast range including oils and sauces, baked beans and other commodities which were nowhere near as competitively priced as its fresh produce.
After review of its supplier portfolio by Lynx Purchasing, a saving of 14% was found simply by ordering ambient goods from a more competitive supplier.
ACTION: Review your suppliers and think about their service versus what you want and then decide how to get it – cuddle, prod or cull? Do you need to cuddle a vital supplier to get them to improve their offer or prod them by reviewing options and requesting a better deal? Or is it time to end the contract because there are cheaper suppliers with same or better quality and service?
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 the third effective habit, the devil’s in the detail’, in our next blog.
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 email@example.com or call 01325 710143.