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Restaurant inventory management: how to control stock for higher profits

19 February 2020 Small Business Advice

Picture this, it’s a Saturday, it’s your busiest hour, you’ve just seated down a 12 person booking…only to find out from your head chef that you’ve run out of all of the specials and you’re on your last seabass… a weekend favourite.

 A living nightmare, but one that a number of restaurants have had to navigate, one too many times. So how do you avoid utter pandemonium in your kitchens, on the floor and at your tables?

You need a smarter food stock management system.

What is good inventory management?

Inventory management, also known as supply-chain management is an important business process which ensures that companies have the right quantity of products at the right time, in order to reduce hefty business costs that come from waste, storage and spoilage.

Additionally, a solid stock and ordering process can help increase profits that come from selling the right amounts at the right time, by meeting your customer’s demands.  

This is true for every business, but when it comes to the food industry, it’s especially important as perishable goods can’t be sold later down the line in the ‘last season’ section. So here’s some easy-to implement tips on how to improve your stock control and increase profits in your restaurant this year.

Use your EPoS

One of the advantages of having an EPoS is that you can automate and integrate pretty much everything. Instead of having separate Excel sheets or even hand-written order forms sat with different staff members who have to cross-reference everything at the end of a long tiresome shift, why not let the machines do it?

Simply add your entire stock list to your EPoS and it will link directly with your sales to give you complete visibility over inventory levels. EPoS inventory software varies depending on the provider, however many systems allow users to formulate inventory reports with engaging data visualisation.  

 Tracking your inventory in real time, and also across a number of different locations means that you can work reactively to iron out any disruptions and avoid missed sales opportunities which is especially important if you’re managing a few different restaurants.

Use the FIFO approach 

FIFO, short for First In First Out is a method of food rotation used to control inventory management and the sale of goods to avoid ghastly food waste. The concept is relatively logical and you’ve probably been implementing it without even knowing. The stock that you ordered first, and therefore the oldest, is the stock you should be selling first, based on the lifespan of your produce.

As stock for restaurants depreciates in value quicker than most other services, there is more importance in avoiding losses on stock.

FIFO allows restaurants to sell goods is a close chronology that minimises the risk of loss and helps them keep track of their store rooms in an orderly fashion.

Maintain consistency

The old proverb ‘too many cooks spoil the broth’ goes for inventory management too. If you allow too many people to get involved with stock control, it will become inefficient and messy.

Although waiting staff will have a good idea of what is being sold, food supplies should be left to designated experts, such as a chef or member of management. Perhaps there is a specialist role for stock control in your restaurant, a person who is able to manage all parts of the supply chain and report back to team members in debriefs.

Create an events calendar

As well as having a granular understanding of your own business— from the dead periods, to the infamous rush hours, and the 30 minute mayhem before closing time, it’s also crucial for the hospitality industry to keep up with cultural awareness days and events happening in the area. This will undoubtedly impact on custom, and therefore stock levels. 

Local music events, marathons, carnivals etc. are all likely to increase footfall in your restaurant, which is great news if you’ve stocked up, lesser so if you’ve ran out of main dishes.

Alternatively, as well as predicting the amount of stock you need, awareness days and events can inform what types of stock you’re ordering. Veganuary has gained real traction across the last two years so by planning ahead to tweak your menu and ingredients to capitalise on this!

Nurture supplier relationships

Regardless of how prepared you are, situations happen that are out of your control. Extreme weather conditions mean you have to shut and you’ve got a day’s extra stock to use. Your chef has accidently dropped a box of 50 eggs… it’s all part of the fun of being a restaurant owner, right?

But building great relations with your suppliers means that when you have sticky situations that you need to get out of fast, (like asking for emergency rhubarb an hour before your dessert club starts) you’re more likely to earn special favours. 

Creating earnest relations with local suppliers is also much more of a ethical and human way of trading, and when you’re stuck in a rut, running across the road to let off steam with your local baker is a lot easier than calling a large corporation located in the other end of the country.

Be agile

The reason restaurants need to stay vigilant about their food stock control is to manage their losses, but sometimes to do this, not only do you need to plan in advance, but you need to rework your plans, on the spot. 

Reinventing your specials board so that you use up some meat that is about to expire, or creating lunch time deals so you can shift more of your smashed avocado while it’s ripe often requires creativity and agility from your chefs and waiting staff. Given the opportunity to think fast though means that you’re not only reducing costs, but also your food wastage.

Learn from your mistakes

This may sound obvious, but unfortunately the best way to improve upon your inventory shortcomings, is to learn the hard way, by experiencing them first-hand. 

Create an internal process to relay feedback from all members of the team, from waiting staff to head chefs. This way you can allow all of your employees to be more accountable for food stock, shortages and waste.


If you’re looking for more actionable insights on how to improve your restaurant’s efficiency, why not check out the data in our Restaurant Insights Report 2020.

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