August 16, 2024
This month we look at: lemon prices, how to make your menu a revenue driver, the best way to organize your inventory for easier counts, inflation and national restaurant sales trends from July.
In honor of the Olympics, we recently asked Reddit what sports would be in the Restaurant Olympics and (as usual) Reddit did not disappoint. My personal favorites were the 300m Heard (lol) and of course, clopens. Check out the rest on our Instagram if you're curious.
While the 300m Heard isn't an official Olympic sport (yet), there was one sport that made its start on the Olympic stage this year: breaking (not break dancing, I learned). I'd highly recommend checking it out if you didn't catch it live.
And speaking of new starts, August marks the beginning of the back-to-school season (I can't believe it either). So this month we've got a few back-to-school topics, like using your menu to drive revenue and making counting inventory easier on your team. What lessons would make it onto your Restaurateur 101 cheat sheet? I'm all ears!
Stay cool, and wishing you all a very profitable, very demure August!
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- Rachel & the MarginEdge team
P.S. If you took our very, very accurate Restaurant Personality Type quiz, your August mantras are here!
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MONTHLY SALES METRICS & UPDATE
Full Service and Fast Casual ended the month -1% down from July 2023's numbers. Both numbers saw strong sales over the 4th of July week and weekend, averaging a roughly +4% growth from last year's holiday.
Red peppers topped our Movers list with a 41% price increase across MarginEdge customers in July.
The average food category costs as a percentage of sales increased for MarginEdge customers last month, with food costs averaging 30% of sales.
ITEM TO WATCH
Lemons
When life gives you lemons, should you just buy lemon juice instead? Maybe. Lemon prices have quietly been increasing over the last few months, with a potential oncoming uptick caused by a complete suspension of operations in Mexico due to - you guessed it - more cartel activity.
Thankfully, Turkey (the 4th largest lemon producer) has had a surplus thanks to great weather in 2024, so prices shouldn't go too high. And domestically, most lemon production in the US takes place in California and Arizona, meaning prices are not subject to impact from Floridian hurricanes like other citrus including oranges and grapefruit. Even with California droughts, lemon production has remained consistent since the 80's.
This brings us back to our original question of whether it's worth it to just buy the lemon juice instead. By the numbers, yes, it is markedly cheaper if the juice is what you're after. The median price for a quart of lemon juice in August 2024 is $4.37, and if there are 3tbsp of juice in a lemon (at 33 cents a pop), the same amount of juice in fresh lemons would cost you $7.04 - a 61% price increase.
That being said, any bartender will tell you that fresh citrus beats bottled any day.
Snappy's Small Bar | Washington, D.C.
ASK [me] ANYTHING
What's the best way to organize my inventory for easier counts?
Inventories at 2 AM after a full shift generally suck. And while you can improve them slightly with a specially curated playlist and a case of Celcius (strawberry guava flavor or nothing), the biggest improvement you can make to your inventory count process is to make it faster and easier to find your products. Here are a few key strategies to organize and streamline inventory for easier counts:
- Label Shelves: Clearly label your walk-in and dry storage shelves to ensure products are always placed in their designated spots.
- Use Standard Bins: Use the same, standard bins to store your products and label each bin with its tare weight (empty bin weight). This lets you easily count inventory by weight by placing bins on a scale and deducting the tare weight.
- Practice FIFO: You already know this one, but implementing the First In, First Out (FIFO) method manages stock effectively and reduces waste.
- Organize Bar Sheets: For bar inventory, organize your inventory sheets by well, mirroring the layout of your actual wells (top to bottom, left to right). This method can significantly speed up the inventory process.
These steps will help maintain an organized inventory system, making it easier to manage and count stock efficiently.
💬 Ask [me] anything!
Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting, or restaurant operations in general? 💌 Email me or message us on our social media channels.
Bento | Multiple locations, FL
THE ECONOMY
Order Inflation Down (overall)!
The July 2024 Consumer Price Index (CPI) report is in, and indicates the following month-over-month changes in food inflation:
- Overall Food Inflation: Up 0.2% from June, and is up 2.2% YOY.
- Food At Home: Up 0.1% from June, and is up 1.1% YOY.
- Food Away from Home: Up 0.2% from June, and is up 4.1% YOY.
- Limited Service Meals: Up 0.3% from June and by 3.5% YOY.
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Full Service Meals: Up 0.2% month-over-month, and by 4.2% YOY.
Overall, inflation came in at 0.2% up from June, which isn't great, BUT year-over-year inflation is at its lowest point since 2021, at 2.9%. This is great news as we approach the Fed's next meeting in September, which will likely mean a rate cut as long as we keep crossing our fingers (and toes!).
Tl;dr - lowest YOY inflation to date, food away from home up 0.2% (but that's the smallest increase we've had since Feb).
Oak & Ola | Tampa, FL
'TIS THE SEASON
How to make your menu a revenue driver
Last month we talked about how often you should make changes to your menu, and what factors to consider when doing so. It's only fitting that this month we spend some time making those new menu items shine and using your menu to drive revenue. Here are some basic tips from our friends at Toast:
1. Readability - Even if you really, really dig Wingdings, it's not a great choice for menu fonts. Choose something legible, clear and sans-serif to make scanning and understanding your menu easier to do. And if your diners are anything like my dad who without fail whips out his phone flashlight to read a menu, choose a font size that is large enough to be comfortably read by your guests. Branding is very important, but it should never come at the cost of accessibility for your guests.
2. Organization - One big long list can feel overwhelming, and your Stars can get lost in the mix. Separate your menu into groups by categories like appetizers, sides, and entrees, or by proteins like chicken, fish or beef. Keep your Stars at the forefront by using color, size and positioning to highlight them.
3. Photography - Use high-quality photos to show off your Stars or to boost your Puzzles. Not every dish needs a picture on your menu (because that can feel cluttered real fast), but using them strategically can direct guests to choose your more profitable or popular items.
4. Pricing - Avoid using dollar signs, as studies have shown keeping them off menus leads to higher spending, and try lowering a dish by 1 or 5 cents so you have .99 or .95 endings which make prices seem lower.
Check out their blog here for more info on how to design your menu boards and use these simple changes to boost revenue and drive positive guest purchasing behaviors.
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