Foodservice sales have soared for convenience retailers, hitting 23% of total revenues for the typical store in 2018, according to NACS State of the Industry Report of 2018 data.
With the boom has come an increased need for labor, ingredients and smarts about how much product to order and prepare. Fortunately for retailers, new technology is serving as an effective tool for handling all of those challenges.
Inventory tracking
The right software can help convenience store retailers keep a pulse on their food production needs. Having too much product creates excess waste, while having too little impedes growth and negatively affects customer experience. Time-of-day reporting and notifications can alert operators to what products are selling and selling out—and when—to help operators decide whether to modify menu offerings.
Software can also help identify what items sell well both across the chain as well as at particular stores. That store-by-store analysis enhances inventory turns, increases customer satisfaction and reduces waste all in one step.
Additionally, software can offer the efficiency of exception reporting and automatic alerts if key indicators like margin, cost and write-off fall outside an acceptable range—there’s no need to sift through pages of reports. Instead, the issue can be automatically highlighted.
Gauging expenses
A solid technology partner ultimately can help an operator improve profitability in foodservice. Getting a grip on all expenses, including recipe items as well as costs associated with waste, can go a long way toward this goal. Foodservice item costs include more than just the meat on the sandwich—they also include costs for items such as the plate and napkin with which the sandwich is served, plus items such as the cup, stirrers, sugar and cream offered for coffee.
Software can help by having accurate recipe item costs and item-level pricing, so that the true margin can be tracked and maintained. A centralized pricebook and both point-of-sale and invoice scanning help automate the process. Automatic notifications related to low-margin items, high write-offs and vendor invoices with unexpected costs also can lead to a healthy bottom line. Additionally, with strong data behind your true margins, retailers are in a better position to negotiate with vendors on all costs related to item sales.
Predicting success
To get the most out of foodservice technology today, software should be able to analyze how successful promotions are and how well items sell when bundled with other items. Good data can help a retailer see how promotions fare currently versus in the past. Also, understanding bundling success can help predict buyer behavior and help retailers tailor specials, such as mix-and-match and combos, to drive larger basket sizes and meet the needs of specific consumers. At the same time, retailers can learn from the software what items do not do particularly well in a bundle, so they can course-correct as needed.
There is no question that technology can help to unlock profit margins for convenience store foodservice. Managing inventory, expenses and promotions and providing the data to support it will give operators the information they need to build a successful foodservice business.
This post is sponsored by ADD Systems