There are two types of known food loss in convenience-store foodservice, waste (finished goods) and spoilage (raw ingredients), and both must be controlled to prevent margin leakage.
This insight comes from Liza Salaria, merchandising and foodservice practice lead at Chicago-based W. Capra, speaking June 19 at CSP’s C-Store Foodservice Forum in Schaumburg, Illinois.
An example of waste is making a breakfast sandwich and later throwing it out, while spoilage is cutting up too many tomatoes and having to toss some in the garbage, she said.
“We have to report both,” Salaria said. “If you want to solve known loss, you have to report it. It is the most critical thing you do in your stores or you cannot solve against it, and you have to report it daily and you have to be accurate.”
With reporting, however, there must be more than just an aggregate number on waste, which Salaria said is “absolutely meaningless. You have to divide waste by sales so you get a rate of waste. That’s very important. And you got to look at it by day of the week because traditionally every report I’ve looked at, it’s the same thing: There’s no waste on Fridays, and we’ve got tons of waste on Mondays—but we’re making the same stuff.”
Developing this data helps a retailer interpret it and look at when they have too much and not enough available food—and subsequently aids in making adjustments to optimize sales.
“We’re not in the sales prevention department, which can happen very easily,” Salaria said.
The process of collecting and analyzing waste data leads to right-sizing the menu.
“And I know we love consistency,” Salaria said. “We want to have the same offering across all the stores.”
However, she said, “I’ve looked at so much data, and I can tell you that if you dump the same menu in a very low-volume store, you’re going to have high audits and high waste. They just can’t handle it.”
To combat waste, retailers must either right-size the menu or develop a growth plan, she said. Some stores might have to come to terms that they have a sales issue due to a shortage of store traffic—“as opposed to being a true overproduction issue,” she said—and adjust their menus.
Salaria shared a slide tracking known food loss:
“On Monday, I’ve got a real high waste,” she said. “Tuesday, it’s getting a little better. We don’t like zeros. Zeros are not good; that means we’ve suboptimized sales. We definitely want to be color-coding and analyzing and training our team members how to interpret it and make really good business decisions.”
Daypart Decisions
Part of controlling waste includes daypart management. “We want to strive for consistency, but we have to embrace individuality,” Salaria said. “So, if you do have relatively the same menu, how you optimize it is you think about better daypart management.”
One store that gets a large volume of traffic very early in the morning should plan differently than a store where people don't wake up until 7 or 8 a.m., she said. With the early store, “Coach those team members to get your stuff out there at 5 a.m.
“You’ve got a two- to three- hour shelf life on your breakfast sandwiches,” she said. “You have to time this stuff very accurately.”
There’s also the consideration of late-risers, prompting the retailer to determine when to end breakfast on certain days, she said. “You might offer breakfast on the weekends till 11 a.m. This is the art of daypart management.”
The same planning pertains to lunch—and when to begin it.
“Do we start at 10 a.m. converting our breakfast over to lunch, or do we wait till noon?” Salaria asked. “Depends on the store, right? I call this flexibility within a framework. We strive for consistency, but we embrace the individuality so we can maximize the profitability.”
These decisions can be compounded with a retailer making a concerted effort to grow sales in a later daypart, which would involve backing it with a promotion or marketing campaign and giving several months to see if it succeeds, she said. “You’re going to align your operational daypart management with your marketing strategy and you’re going to go for it.”
For retailers asking where to start in growing sales, Salaria said, the first step is looking at inside transactions, which are often “a good indicator of the propensity for you to sell food. If you’re really not sure today where to start, look at the transactions by hour and that’ll give you a good indicator.”
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