Cost of errors high for Kiwi bars and restaurants
Avoidable errors are costing New Zealand bars and restaurants thousands of dollars in lost profit each year, according to auditors of the industry.
Peter Nelson, the managing director of Sculpture Hospitality, which audits beverage usage in cafes, bars, and restaurants, says issues such as over pouring, wastage, not checking incoming supplies, and incorrect keying and charging are adding up and hitting the industry in the back pocket.
“When we first start working with venues we find, almost without exception, that they are suffering 15 to 20 per cent losses from their beverages, Peter says, “we are often called in to investigate suspected theft but 80 per cent of the time businesses are hurting from other issues, related to not having the right checks and balances in place,” he says. “The reality is that people are so busy in hospitality that it’s incredibly hard to keep on top of everything.”
Peter says many venues could make a significant difference to their profits by simply putting stock ordering and receiving systems in place. “We regularly find that there is no record of what is being ordered, so that there is nothing to check incoming supplies against or any price check to ensure the venue is paying the right amount.”Orders also need to be cross-checked against invoices. “To limit the risk of stock going missing, it is also best to have different people checking in the stock, from those putting it away.”
As part of any venue audit, Scuplture Hospitality cross checks the prices that venues have agreed with suppliers, against those that they have been most recently charged. “Most venues have contracted prices and yet we continually find pricing outside the terms of the agreement,” Peter says. “We’ll often more than pay for our fees by finding anomalies between agreed prices and those that venues are actually being charged.”
Venues also need to be wary of beverage suppliers promoting brands at their expense. “Promotions can significantly reduce the margins for venues and make a special offer for customers, a poor deal for the café, bar or restaurant.” People running bars and restaurants also need to be vigilant when beverage suppliers offer to develop their winelists and pay for the printing. “Some wines are returning good margins of 70 per cent, while others are as low as 40 per cent, so it’s really important to understand what is being offered and what the venue will receive from the selection,” Peter says.
One of the overarching issues for the industry is that in New Zealand “working in hospitality is seen as a job not a career”. High staff turnovers are the norm, which makes it difficult to train people and keep strong systems in place. Peter says the same issues don’t affect the industry in other parts of the world, where hospitality is seen as a career and training is more evident, however issues such as tipping and freepouring make it harder for business owners in places such as the United States.
Sculpture Hospitality is working with about 300 businesses in New Zealand. “Our biggest advantage is that we are independent and don’t arrive with pre-conceived ideas about what we’re going to find. We help owners to identify what’s happening, so that they can then train their staff and put a plan in place,” Peter says.
Peter Nelson is the Managing Director of Sculpture Hospitality for New Zealand and Australia. Sculpture Hospitality is also a Preferred Supplier and partner with Hospitality NZ. It has offices in Auckland, Wellington, Hamilton, Tauranga, New Plymouth and Christchurch.