Feature Article - April 2004
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Concession Obsession

Learn to maximize your menu, save money and make even more

By Elisa Kronish

Cost-cutting concepts

Those chicken sandwich revenues can also benefit from some solid cost-saving and dollar-stretching measures.

"Look at your supply channels to make sure you're buying right," Wilkinson advises. Handler used to purchase his sandwich buns from a large supplier and was unfairly charged for squashed buns. He now gets his buns from a warehouse store.

"They're cheaper and more reliable than we were getting from our supplier, and they never run out," Handler says.

It's important to scrutinize your contracts with food vendors and subcontractors. Consultants have particular expertise with these contracts and can offer valuable assistance. When city of Aspen, Colo., Recreation Director Tim Anderson hired a food-service consultant to help develop the concession at his expanded recreation and golf center, he realized he and his staff were not well educated on how to negotiate the best contracts. While Anderson's subcontractor had given him numbers as to what to expect in terms of sales, the consultant examined the contract closer.

"We had numbers for a restaurant but nothing relevant to us," Anderson says. "We thought they knew what they were talking about, but compared to the number of rounds of golf we do, it wasn't on target."

You might only give your contracts attention when they come up for renewal. At that point, you're probably in the middle of so many other tasks that you hastily sign the contract to hustle it off your desk.

"When managers are in a hurry to dispense with this task, the easiest way to get rid of it is to just sign it," Wilkinson says. "But more often than not, the circumstances of the contract are not as good as they could be." You may save time in the short-run, but you could save money in the long haul if you take the time to examine the specifics upfront.

For one thing, the contract is typically created by the vendor or subcontractor, so it's going to favor them and not you.

"Buyers have to make sure they put in their own safeguards," Wilkinson says. For example, the Wave Waterpark was being charged a whopping $12 each time their food supplier made a delivery.

"We hadn't even realized that," Handler says. "They also had the power to send us, say, a more expensive cheese than we ordered and charge us for it saying that they had run out of the other cheese. We're putting the power back into our hands."

Handler also saved dough by making dough—for his pizza. He had been ordering 100 pizzas from a vendor, but they'd sit all day and suffer in quality.

"We tried doing a three-quarter cooked, and that was better, but it still requires effort, so we figured why not put that effort in and cut down on our costs at the same time," Handler says. Now, he outsources the dough and can prepare crusts during lulls in concession activity.

"We used to get an eight-slice pizza from a vendor for $6.25, and now I can make a pizza for $4.55," he says, adding that his pizza also creates larger slices, providing a better product to his customers.

Another helpful change at the Wave Waterpark was investing in a point-of-sale system. While such software can cost thousands of dollars upfront, if you have the revenues to warrant it (the Wave now pulls in about $230,000 a year in concessions), it can make sense. Handler was able to track inventory and sales better than before, so he knew what was selling well and what was sitting on the shelves.

"For example, out of 10 ice cream flavors, we found that seven weren't selling fast enough to make it worthwhile to keep them," he says.

Whether you decide to purchase point-of-sale software, the important thing is to keep track of profit and loss.

"Really watch the numbers, and before the end of the season," Holtzman says. "Don't wait until July when you can't really readjust anything."

One element to consider is labor cost. Assess the number of employees and the hours they worked and determine the percentage of labor vs. the revenues for each day. You might realize that it's not even worth opening the concession during certain hours.

"I see a lot of facilities staying open when they shouldn't," Wilkinson says.