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Schechter Perspective: Trading growth for efficiencies

Schechter Perspective: Trading growth for efficiencies

Editor’s note: The author is editor in chief of The Schechter Report, and a veteran journalist who has covered the foodservice industry, especially equipment news and information, for more than 20 years. The content here does not necessarily reflect the views of Nation’s Restaurant News.

With restaurant chain Chapter 11 filings increasingly in the news and solvency issues threatening banks and even entire countries, it’s time for suppliers and end-users of foodservice equipment to review their business practices to ensure they remain on a solid financial footing. Up until the last recessionary years, top-line growth was the Holy Grail, as a growing economy and ever-increasing consumer spending helped to preserve profit margins. Now, however, pursuing growth at any cost is looking more and more like an antiquated and even self-defeating strategy.

For equipment makers, this means reconsidering wholesale product line extensions to reduce manufacturing and inventory costs and the further implementation of JIT processes that allow raw materials and components to be purchased only after orders have been secured. Foodservice equipment manufacturers also need to listen more closely to commercial and noncommercial operators’ requests for greener, more resource-efficient kitchen appliances and to price these products more affordably to encourage end-users to trade-in outmoded models. Equipment dealers and reps, for their part, should re-examine the number of factories and lines they carry and represent to winnow out those products that cannot be sold at consistent profits and allow their salespersons to concentrate on moving the E&S best suited to operators’ current needs to produce more types of meals at lower prices.

Restaurateurs and foodservice managers facing declining sales and traffic need to revaluate just about every component of their operations. This can include switching to sous vide production equipment that enables the appealing service of cheaper types of animal proteins and reduces energy requirements. Blast chillers cannot only decrease costly safety hazards, but also increase food product yields. Switching to low-flow water faucets and commodes, more energy-efficient lighting and single-brand commodities such as paper goods and trash receptacles are all effective cost-cutting measures. Lower-priced convection steamers can replace costly combi ovens without significant loss of productivity or ability to produce a wide variety of menu items. Operators should also be aware that food disposers and pulping systems can cut water consumption and solid waste output, decreasing haulage costs and reducing the amount of trash sent to landfills while improving restaurants’ and foodservices sustainability profiles.

When economic conditions are deteriorating, it’s easy for foodservice businesses of all types to stand pat and not invest in new more efficient practices. The problem with this approach is doing what you’ve always done and expecting to achieve different results is not only a definition of insanity, it’s also a sure-fire recipe for failure.

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