Chapter 12

Controlling Food Sales

Principles of Food, Beverage, and Labour Cost Controls,Second Canadian Edition

Learning Objectives• 12.1 List and explain the three goals of sales control.• 12.2 List and describe eight determinants of customer restaurant selection.• 12.3 Describe the two principal means of maximizing profits.• 12.4 Explain the three most common methods of establishing menu prices.• 12.5 Describe the two principal means of selling products effectively in a

restaurant.• 12.6 List and explain the five most important elements of menu preparation.• 12.7 Explain management’s attempts to maximize profits by establishing

proper sales techniques.• 12.8 Describe how technology has affected sales techniques.• 12.9 Explain the importance of revenue control.• 12.10 List and explain the three standards established to achieve the goals of

revenue control.• 12.11 List and describe the standard procedures for controlling revenue.

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Introduction• Control was defined as “a process used by managers to

direct, regulate, and restrain the actions of people so that the established goals of an enterprise may be achieved.”

• Revenue control is only one important goal of sales control.

An important maxim for any business is that “without sales it is impossible to control costs.”

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Sales Control

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Goals of Sales Control

• Optimize number of customers

• attract a sufficient number of customers

• Maximizing profit

• obtain the maximum gross profit from customers

• Controlling revenue

• all of the revenue resulting from sales is realized

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Optimizing the Number of Customers

1. Location

2. Menu item differentiation

3. Price acceptability and value

4. Décor and lighting

5. Portion sizes

6. Product quality

7. Service standards

8. Menu diversity Pri

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Location• Other things being equal, customers will choose the most

conveniently located restaurant.

• The greater the distance from a population centre, the fewer the customers a restaurant can expect to attract from that centre.

• Having a good location is usually necessary for volume business.

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Menu Item Differentiation• Homogenous products or services are so similar to

another, customers have no preference, choosing whichever costs less.

• Differentiated goods and services are sufficiently different that customers develop preferences.

• Unique menu items are called signature items.

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Price Acceptability & Value• If restaurants are alike in every way except menu prices,

the one with the lowest prices will have the greatest sales volume.

• The more homogeneous an item, the more price sensitive it is.

• If menu items are price sensitive, a relationship exists between sales price and sales volume.

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Décor & Lighting• Décor differentiates one restaurant from another.

• Décor that appeals to a large segment of the targeted market should be selected.

• Evaluate the decors of local restaurants.

• Professional help is recommended.

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Portion Sizes & Product Quality• Portion sizes must be appropriate to a restaurant’s

clientele.

• Large portions do not always attract the greatest number of customers.

• Various customer segments demand food products of various levels of quality.

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Service Standards• Customers select restaurants offering a type and level of

service that they find appropriate to the occasion.

• Managers must be able to adjust some aspects of service in order to increase customer satisfaction.

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Menu Diversity• Most restaurants find it necessary to have a broad range

of menu items.

• The number and range of menu items are governed by:

• cost considerations

• available equipment

• the culinary abilities of the kitchen staff

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Maximizing Profit

2 principal means to maximize profits:

• Pricing Products Properly

1. Matching competitors’ prices

2. Calculating prices from costs and cost percents

3. Adding desired contribution margins to portion costs

• Selling Products Effectively

1. The menu

2. The sales techniques used by the staff

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Pricing Products Properly• Cost is usually the most significant factor in establishing

sales prices.

• Restaurants with differentiated products have more flexibility to change menu prices than those with homogenous products.

• The proper sales price for an item is that which will produce an acceptable number of sales.

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Setting Menu Prices• Matching competitors’ prices

• Common by those with no idea of cost

• Calculating prices from costs and cost percents

1. Create the price by using a fixed food cost %

2. Use portion cost and forecast sales volume

• Adding contribution margins to portion costs

• Often used and equitable

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The Importance of the Menu• The menu is the primary sales tool.

• The five most important elements of menu preparation are:

• Layout and design

• Variety

• Item arrangement and location

• Descriptive language

• Kitchen personnel and equipment

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Sales Techniques• Managers hold daily meetings with servers before opening

time and benefit:

• Management

• Customers

• Servers

• Training servers:

• Suggestive selling

• Suggest specific menu items

• Empower = Total Quality Management

• Technology

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Controlling Revenue

There are three standards for achieving the goal of revenue control:

1. Documenting all sales

2. Pricing all sales correctly

3. Verifying that all sales are recorded and deposited

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Documenting Food Sales – Manual

Using guest cheques:

1. Helps servers remember orders

2. Provides a written order for the kitchen

3. Gives itemized bills to guests

4. Maintains records for sales history

5. Proves accuracy of cashiers’ work

6. Verifies the accuracy of prices charged

7. Records for tax purposes Pri

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Using Numbered Cheques

• Using cheques numbered sequentially

• Signature book for control

• Dupes for follow-up

• Concerns with using hand-written guest cheques

• Legibility

• Accuracy

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Pricing All Sales Correctly

Control is required to ensure:

• correct menu selection

• accuracy of prices

• accuracy of arithmetic

• accurate subtotal of menu prices

• tax calculated as a percentage of subtotal

• grand total for the cheque

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Recording Revenue• Restaurant sales control sheet• Using a register• Breaking down sales into categories

• Errors• Labour

• Consider benefits of electronic• Touch screens, PDA• Accurate• Monitor• Reports

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Key Terms• Control sheet, p. 325• Data mining, p. 319• Differentiated product, p. 303• Dupe system, p. 324• Guest cheque, p. 322• Homogeneous product, p. 303• Price sensitive, p. 304

• Revenue control, p. 300• Sales control, p. 300• Signature book, p. 322• Signature item, p. 304• Total Quality Management, p. 318• Truth in advertising, p. 316

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