Controlling Spiralling Costs: Six top tips to help foodservice operators maintain and improve profitability

23 September, 2022

When you combine growing costs with ongoing supply chain challenges, labour shortages and the after-effects of the pandemic and Brexit, it’s very hard to imagine a more challenging time for the hospitality industry. So much so that many operators have found themselves simply focusing on staying in business, as turning a profit feels like a near-impossible task.

While rising costs are mostly beyond our control, there are still a number of ways in which operators can improve profitability. So let’s focus on what we can control…

We’ve put together our six top tips for controlling costs within your business:

1. Soften your labour costs

It’s important to try to keep things simple in the kitchen whenever possible.

While streamlining your menus can take the pressure off kitchen and front of house staff, by understanding labour costs per menu item, exploring lower-skill recipes and introducing simple-to-serve food concepts, it’s possible to significantly reduce your labour costs. This could also help alleviate some of your recruitment challenges.

Once you have visibility of the costs associated with each individual dish on your menu, you can look into ways to reduce prep time; by simplifying processes, you may also remove the necessity for highly-skilled (and expensive!) chefs.

Of course, we understand that this isn’t possible for all foodservice operators, but by really getting under the skin of your labour costs and in particular, your cost-per-dish, you’re likely to find ways to streamline processes and improve operational efficiencies.

We’re here should you require ideas and inspiration for new, exciting and innovative fast-serve or grab-and-go food concepts. We have an extensive supplier and brand owner network offering hundreds of products and dishes that can be cooked and served in just a few minutes. 

2. Menu engineering

Now more than ever, your menus need to work hard for you.

During the pandemic, many operators made the decision to streamline their menus, and with research suggesting that 77% of consumers are happy to visit a restaurant with a limited menu, many operators have continued to offer fewer options and/or all-day dining menus.

If possible, we recommend condensing menus by prioritising the most popular dishes and customer-favourites. These could be offered alongside a number of healthy and well-balanced, vegetarian, vegan and gluten-free options to meet current consumer demand, plus seasonal specials to add variety. Specials can also be used to upsell more profitable dishes and utilise surplus stock/reduce wastage.

Menus can also be engineered to use fewer ingredients, making use of the same products across multiple dishes…

For example, the same tomato base could be used in pasta dishes, soups and on pizzas, as well as being mixed with other more premium flavours, such as harissa, to create salsas and dips. This also reduces food waste and therefore costs.

Additionally, there are numerous ways in which you can ‘premium-ise’ existing dishes on your menus…

By adding high-quality ingredients sparingly, such as pre-prepared rubs, already-stocked fresh ingredients and readymade toppings and sauces, simple dishes can be quickly and easily transformed into dishes which customers perceive as being more premium. For example, a handful of rocket and parmesan shavings on top of a pizza or a sprinkle a Biscoff or Oreo crumb onto a simple cheesecake can increase perception and most importantly, justify a higher price thus improving margins!

As owner-operators of a portfolio of foodservice outlets, we have first-hand experience of menu engineering like this – and we know exactly what works (and what doesn’t!) Should you need assistance, we’re always here to help.

3. Review utility usage

Energy prices are skyrocketing causing one of the biggest challenges the industry has faced – it’s so severe that, for some businesses, the increase in energy costs could be even more damaging than the effects of the pandemic!

We recommend that all operators conduct a full kitchen energy audit to gain a full understanding of what appliances are being used, when they’re being used and how much this is costing.

Regularly cleaning and servicing equipment can help with energy cost savings…

Every piece of equipment should be checked to ensure it’s not working harder than necessary. Start by checking your fridge – if the condenser coils becomes clogged, it could prevent it from expelling heat meaning the appliance has to work extra hard to reach food-safe temperatures.

If you’re using older equipment, you may want to consider switching to more energy-efficient alternatives. While this will involve upfront costs, you will benefit from long term cost savings. For example, using an energy-efficient dishwasher could generate savings of around £1,500 every year!

You should also review your energy usage alongside your menus and trading hours. There may be an opportunity to introduce an ‘off-peak’ menu carefully engineered to use less kitchen appliances, offered to customers during quieter trading periods.

We’ve conducted detailed energy audits in our own venues and within our member’s businesses. Should you need assistance, we’re always here to help.

4. Systems and technology

The right technology can save you time and money.

While most restaurant management systems require an initial financial outlay, investing in the right technology for your business will provide benefits that will undoubtedly reduce your costs in the long run.  

Whether it’s customer-facing technology such as digital menus and online ordering, menu management solutions to manage your costs and keep your profit margins on track, or back-of-house applications to reduce manual tasks and labour-intensive processes, technology will significantly reduce your labour costs allowing you to redeploy staff and allocate their time more efficiently.

Our team can provide advice on suitable technology for your business and can offer demonstrations and training on any of our IQ systems - a suite of powerful, yet affordable systems developed by our in-house team of software specialists: MenuIQ | AccountancyIQ | RegencyIQ

5. Control your profit margins

The key to achieving and maintaining sustainable gross profit lies in developing accurately-costed, consistent recipes with full visibility of live ingredient costs.

All too often, operators are unaware of the actual GPs achieved per dish until they review their accounts at the end of the trading period – and that’s often not until the end of a quarter! This means that a loss-making dish could be on the menu for up to three months without anyone knowing (or doing anything!) about it.

With ongoing market volatility and constant price movements for key ingredients, it’s vital that you have access to live ingredient prices.

While it’s possible to manage GPs via Excel spreadsheets and manual processes, one of the best ways to stay on top of price movements is to use a menu management system. With the right system in place, operators have instant visibility of live product and price data direct from suppliers, providing the information and tools required to control and maximise the profitability of every product/dish, with no hidden surprises when it’s time to review P&Ls.

You might like to take a look at MenuIQ, our advanced menu management system developed by operators, for operators.

6. Smarter buying

Food and drink costs are continuing to rise, but by closely examining what you’re buying and when you’re buying it alongside the ordering processes within your business, it’s still possible to unlock cost savings and protect your bottom line.

You may consider switching from branded to own-brand product alternatives, forward planning and buying on promotion or simply buying from suppliers with more competitive pricing and/or better service levels.

And while we continue to experience constant price fluctuations, ordering processes should be reviewed to ensure effectiveness; regularly updating stock and order sheets to ensure accurate and up-to-date product pricing is absolutely crucial.

By conducting an in-depth review of the purchasing across your entire business (not just food and drink), immediate cost savings can almost certainly be achieved. However, one of the biggest challenges operators are currently facing is simply finding the time to do this…

Every day, our procurement specialists conduct in-depth purchasing analyses, price comparisons across more than 130 local and national suppliers and market-price benchmarking using real-time price data from almost 4,000 Regency members, helping operators make fully informed purchasing decisions.

Should you need assistance, our team is on hand to provide operators with advice and guidance on the best and fastest ways to save money.


The cost of living crisis and soaring inflation rates mean that controlling costs will continue to be top priority for foodservice operators.

With visibility of live ingredient prices, by fully understanding your menu costs and making purposeful changes to your menu, and by having the right staff working at the right times, even in such challenging times, there are cost saving opportunities that can enable you to protect your business.

By focusing on and carefully managing the costs that you can control, and by investing in time and cost saving technology and energy-saving efficiencies, you’ll be better equipped to mitigate the damage of unexpected or uncontrollable costs that you may face in the future.

If you’d like to discuss anything covered in this article in more detail, either to help you decide where best to focus your efforts or to request our assistance and involve our team in the process, please get in touch.

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