Weathering the Storm: Best Practices to Keep Your Restaurant Successful During Uncertain Times 


The restaurant industry is currently dealing with a number of factors impacting growth and profitability. Same store sales are declining and no sector is exempt from that trend. Consumers are opting to eat at home, while Baby Boomers are retiring and their incomes are shrinking. Millennials don’t spend a lot of money when they go out because they are balancing mounting student loan debt, and the rising minimum wage is becoming a national trend.


But when industry trends seem like they are headed in the wrong direction, and even when things are looking up, here are a number of best practices that operators should employ:

  1. Conduct a comprehensive menu review. Spend time analyzing what sells, what doesn’t, what is easy to prepare, and what is labor intensive. Can you increase prices on some items and eliminate others? Check the marketplace, are you competitive?
  2. Drill down on the contribution margin of menu items. Dollars pay the rent, not percentages. If a menu item isn’t generating dollars - should you keep it?  Go over recipes with chefs, implement weekly budgets for spending.
  3. Look at your hours of operation. Would it be beneficial to open later, close for lunch, or close earlier at night? A change in your hours of operation may allow you to reduce labor hours and costs.
  4. Reward top performers. Create incentive plans for employees who produce better sales. Keep the best staff and pay them well. This will ensure a more profitable operation and a more successful brand. 
  5. Control your cost of goods. Utilize smart purchasing.  Ask vendors to give you discounts for early payment, vet out alternative vendors. Focus and incentivize the kitchen staff, eliminate waste, and count the inventory! 
  6. Re-run your budgets. Make adjustments for new menu pricing and items and tweak your labor schedule. If you don’t have budgets, build them now. Review flash reports daily with your management team.

Learn More

Contact Gary Levy, CohnReznick Partner and Hospitality Industry Practice Leader, at gary.levy@cohnreznick.com, 646-254-7403, or Kelly A. O’Callaghan, Partner and Hospitality Industry Practice Leader in CohnReznick’s New Jersey offices, at 973-618-6221, Kelly.ocallaghan@cohnreznick.com.

For information on CohnReznick’s Hospitality Industry Practice, visit our website.