Have your grab-and-go (GNG) program sales gone stale? Are you considering a made-to-order (MTO) sandwich program as a way of energizing financial results? If so, you may be ready to implement a proven strategy, the four P’s of profitability.
We want to venture into MTO sandwiches without stopping our self-service GNG program. How do we balance the two?
The secret of balancing both labor delivery models lies in the planning stage of the MTO concept design and menu structure. Once the concept’s physical layout is determined and the menu is established, the profit performance potential of the program is locked. To create powerful profit synergies across both formats, operators need to balance the four P’s of profitability:
Price: The value perception of the MTO program should be stronger than that of the GNG program. Design competitive menus that offer bundling opportunities for the customer and increase per-person average sales. Price products with a balanced focus on incremental penny-profit generation, which can be defined as the profit dollars remaining after the cost of goods sold, waste, packaging and labor.
Product: Create the illusion of new items by transforming and leveraging core ingredients from the GNG program. For example, the GNG program offers a basic turkey sandwich while the MTO program offers a deluxe version and bundle as a meal deal at higher sales and penny profit per customer transaction. Leverage vendor ingredients to create consistency and purchasing power.
Position: It’s all about profile, location and availability. Carefully evaluate sales-per-square-foot estimates and deploy a less-is-more strategy to space allocation. Fewer ingredients and production steps usually means less waste and labor. When menu and labor synergies exist between the MTO and GNG program, use the GNG program to satisfy off-peak operating hours of the MTO program.
People: If the existing GNG program has low execution levels, you must allocate the appropriate people resources to develop a comprehensive training program. Support employees with attractive marketing signage and simple promotional strategies to help them communicate value and grow sales.
But before you add an MTO sandwich program, review primary profit indicators of a healthy foodservice program and then renew operations’ commitment to excellence:
Sales trend: Are your current program’s year-to-date comparable sales positive? Net profit: Is your program profitable by double digits after waste and direct labor (i.e., sales less cost of goods and services, waste and labor equals positive profit of 10% or more)?
Menu variety: Have you improved your selection since the same season last year, and does your menu reflect market trends?
Presentation: Is your display consistently attractive and clean 24/7?
Service: Can your employees proactively describe menu features to customers and answer basic questions about ingredient quality and/or nutritional attributes (i.e., vegetarian, gluten-free, low-fat, nut-free)?
Deborah Holand is chief consultant and owner of foodservice911.com, specializing in new concept and revitalization growth strategies. Have a question for Deborah? Email awestra@winsightmedia.com, subject Ops Talk.
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