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How big data can drive big profits for restaurants

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While much of the focus on the use of big data by restaurant operators has been on the potential for personalizing the guest experience, data analytics is also being put to use to streamline back-of-the-house processes.

In fact, Restaurant Business reported that the use of data is becoming thoroughly entrenched in all aspects of restaurant operations.

“Data will drive virtually every element of restaurant operations, from personalized marketing appeals to hyper-customized menu suggestions and ultra-efficient kitchen design loaded with ‘smart’ data gathering equipment,” RB reported in an article on key industry trends.

Inventory, procurement, and food cost management are among the back-of-the-house functions that can be enhanced through the analysis of accurate data. Operators who view procurement as a strategic financial management tactic, rather than as a routine task, can shave percentage points off their food costs and gain competitive leverage.

Proper inventory management can not only help quite a bit with minimizing food waste (and as a result help lower food costs) but, when combined with a real-time, automated data collection tool, can shore up financial statements, such as a restaurant’s Profit & Loss report. By keeping inventory values updated with fluctuating ingredient prices, operators won’t be left guessing on how much cash is sitting on shelves or in the walk-in.

Timely access to both sales and purchase data will allow operators to track what menu items are popular and evaluate the cost of ingredients used in those items to determine which items may need to be emphasized versus phased out. This input can help operators make decisions that lead to significant cost-savings and profits.

With xtraCHEF’s automated data collection tools, operators can easily access the data they need to cost out recipes more accurately, purchase ingredients more intelligently, and squeeze more margin out of every dollar that they earn.

xtraCHEF’s back of house business intelligence platform gives their customers unique insights into how their dollars are being spent. This information can then be used to drive negotiations around pricing, contracts, payment terms, rebates and other financial management strategies that help minimize the cost of goods sold and add dollars to the bottom line.

The ease of use of these systems, including the mobile app, keeps operations teams in mind while the reporting and dashboards make them ideal tools for using data strategically to reduce costs and add transparency to the supply chain. Being a cloud-based system, xtraCHEF easily integrates with other restaurant management systems and is accessible anywhere there’s an internet connection. Their mobile app even allows inventory counts in places without an internet connection, such as the walk-in or basement.

“Many of the restaurant inventory and ordering systems in the market today require significant manual upkeep and maintenance in order to represent an accurate reflection of inventory values,” said Bhavik Patel, co-founder and CTO of xtraCHEF. “By leveraging xtraCHEF’s core data extraction technology, we are able to monitor price fluctuations and modify inventory values in real time with zero manual intervention.”

Restaurants have lagged behind other industries in their use of big data, but the opportunity remains strong, according to a report from Boston Consulting Group.

“This is a big opportunity for the brands that move fast,” BCG said in the report. “We’ve seen data and analytics programs yield 5% to 10% increases in revenue, 10% to 15% reductions in store-level operating costs and 10% to 20% improvements in EBITDA.”

The report cites inventory replenishment as one of the key areas where operators can streamline their processes and save costs using sales data.

For more information about inventory management and procurement systems from xtraCHEF, visit xtrachef.com today.

This post is sponsored by xtraCHEF

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