In the world of hospitality, restaurant stocktaking helps control waste, inefficiency, and theft. It also helps us keep a tight rein on costs and handle the twin problems of overstocking and understocking.
It’s about counting food and beverage stock so we know that the theoretical amount we used and sold, reflects the amount of stock that was delivered and we still have left over. In hospitality, we handle huge quantities of food, alcohol and cash – all items with very good street value. When there is poor stock management and loose security, thieves will soon find you.
Explain restaurant stocktaking to your staff
Opening Stock + Purchases – Closing Stock = Consumption (COGS). The stocktake works out the value of the Opening and Closing Stock.
Use the example of wine bottles: We started the week with 6 bottles, bought 12 more and finished with 4, so the calculation is: 6 + 12 =18, less the 4 remaining = 14 used. Stocktaking uses this principle on a much larger scale. Ask applicants for manager positions to explain this – the results may surprise you!
‘Stock takes aren’t fun, but you can save hours if you are organised and lose thousands if you don’t bother!’ Jimmy Griffin, senior coach at Foodie Coaches.
How to do efficient stocktaking
Use stock lists generated by your kitchen management, POS or recipe system. Whatever you use, the lists are already done and waiting to reuse – pull them up on an iPad, tablet, or laptop and enter the figures directly. Printed lists and spreadsheets are just creating double handling and an opportunity for errors.
Do one storeroom at a time – if you have stock items stored in multiple locations (dry store, cool room and service fridges), don’t run around the kitchen to find all instances. Count methodically through one store location at a time.
Store items on shelves in a similar order to how they are on the stocktake list, if possible.
Count each storage location in the same way eg left to right, top to bottom – start at the top left of each shelf, then work your way down to the bottom right. That way you won’t miss anything.
Check that the sizes listed match actual portion sizes eg 2 boxes of cans, not just 2 cans.
Value cooked items from your recipe costing system eg sauces, baked pasta, desserts – this will show the cost for the individual items, weight or litres in trays or containers.
Adjust the value of cooked ingredients in your recipes to reflect the original purchase price eg 10kg of mushrooms will cook down to 5 kg or less in cooked weight – if the !0 kg cost $90, the value of the cooked mushrooms is $90/5 or $18 kg for recipe purposes eg as an add-on for a breakfast dish.
Count with a helper – it’s faster and easier. One counts the stock, and the other records the result. It’s also a double-check to avoid missing anything.
Make it a ritual – undertaken on the same day of the week or month and counted in the same order.
A Top-20 stocktake can be helpful – when you take the 20 items you spend the most on each week (shown by your bookkeeping system) and focus the stocktake on them. A complete stocktake is better, but this will still be valuable.
How often to stocktake? Weekly for liquor and monthly for food is sufficient. Weekly for your Top-20 food items will also be very beneficial./li>
Costs and issues you discover with proper restaurant stocktaking
You have more stock than necessary. A very common problem, even with deliveries 5 or 6 days a week. Staff usually get into more trouble because of running out than being overstocked, so they will overstock to avoid drama. But it’s like cash on your shelf, rather than in the bank. If you’re buying 10 cases of a product to get one extra free, waste and shrinkage also increase – these deals are usually about the sales rep’s bonus rather than saving you money.
Stock turns over too slowly. This is less common with food, but quite common with liquor. To work out the turnover rate, calculate how much you need for a week (multiply your sales by the typical cost of goods %) and divide this into your total stock on hand.
Eg. if your liquor sales are $10,000 and costs are usually 40%, you will need $4,000 of weekly stock. When the stocktake shows you have $24,000 of stock on hand, that’s 6 weeks supply! Most operators like to keep it to 4 weeks or less, so in this case, you’d have to reduce the stock from $24,000 to $16,000. That’s $8,000 cash back into the bank! See How to Measure and Dramatically Improve Your Bar Profits.
To do a similar calculation with food, work out the number of days of stock you hold. If it’s more than a week, you are probably overstocked.
Is your whole business overstocked? Are store room shelves loaded with old plates, bowls and saucers that won’t be used, or broken appliances? Is the office stuffed with years of old invoices and paperwork? Chances are the rosters are also overstocked with staff hours.
Other restaurant stocktaking considerations:
Disposables, packaging and napkins – what’s the value on hand? Is it added to recipe costs for takeaway items?
Do you pay too much attention to things that don’t matter eg weighing salt?
Do you assume basic commodities are of little value eg spices in large cans are very costly.
How many items are entered in the stocktake as ‘the same as last time’?
Watch for transfers between bar and kitchen e.g. Guinness for the ‘Beef & Guinness Pie’ or strawberries going to the bar for cocktail garnishes.
Would the cost of an external stocktaker pay for itself with the savings and discipline that would be created? This is usually the case with liquor.
Remember the 80-20 Rule – most of your sales come from a small number of menu items e.g. if you have 50 items on the menu, probably 80% of your sales come from 10-12 items (20%), Weekly POS figures will identify what these are – can you eliminate some of the other 40? The same applies to your stock – if you have 200 stock items (from meat and vegetables to spice and sauces), probably 80% of what you serve is made using 20% of what’s in your fridge or storeroom (approx 40 stock items).
Advice from Foodie Coaches senior coach Jimmy Griffin:
Always count to the room – not the sheet. Count the same way every time, just like you train the same way every time.
If you’re not using scales, you’re not stocktaking!
Always recount outliers i.e. unexpectedly large or small quantities. What happened?
Take the time to compare your total dollar variance to individual item variances. It’s a reminder that little bits add up and consider what you could do with that cash.
Take the time to set up your inventory and decrements properly (the amount of stock reduced each time you sell an item). If you don’t trust your own data you’ll waste hours investigating every possible discrepancy instead of being able to narrow it down to a particular area.
‘When I first started stocktaking as Duty Manager in a pub I’d go down the sheet and then count how many of each item I saw. This meant that I was looking for the items on the sheet, not recording the items that were in the area. If a stock item wasn’t added to the inventory properly, I could miss it. I felt silly flipping through 8 sheets to find each item as I counted until I understood the reason behind it. So, if you can organize your areas vaguely alphabetically (or however else your inventory reports), it will minimise sheet flipping! Eg. I’d try to keep my spirits store organized by category (liqueurs) and then alphabetically so I could just count an area on one sheet rather than flipping from Aperol to Chartreuse on the next page.’
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In the world of hospitality, restaurant stocktaking helps control waste, inefficiency, and theft. It also helps us keep a tight rein on costs and handle the twin problems of overstocking and understocking.
It’s about counting food and beverage stock so we know that the theoretical amount we used and sold, reflects the amount of stock that was delivered and we still have left over. In hospitality, we handle huge quantities of food, alcohol and cash – all items with very good street value. When there is poor stock management and loose security, thieves will soon find you.
Explain restaurant stocktaking to your staff
Opening Stock + Purchases – Closing Stock = Consumption (COGS). The stocktake works out the value of the Opening and Closing Stock.
Use the example of wine bottles: We started the week with 6 bottles, bought 12 more and finished with 4, so the calculation is: 6 + 12 =18, less the 4 remaining = 14 used. Stocktaking uses this principle on a much larger scale. Ask applicants for manager positions to explain this – the results may surprise you!
‘Stock takes aren’t fun, but you can save hours if you are organised and lose thousands if you don’t bother!’ Jimmy Griffin, senior coach at Foodie Coaches.
How to do efficient stocktaking
Costs and issues you discover with proper restaurant stocktaking
You have more stock than necessary. A very common problem, even with deliveries 5 or 6 days a week. Staff usually get into more trouble because of running out than being overstocked, so they will overstock to avoid drama. But it’s like cash on your shelf, rather than in the bank. If you’re buying 10 cases of a product to get one extra free, waste and shrinkage also increase – these deals are usually about the sales rep’s bonus rather than saving you money.
Stock turns over too slowly. This is less common with food, but quite common with liquor. To work out the turnover rate, calculate how much you need for a week (multiply your sales by the typical cost of goods %) and divide this into your total stock on hand.
Eg. if your liquor sales are $10,000 and costs are usually 40%, you will need $4,000 of weekly stock. When the stocktake shows you have $24,000 of stock on hand, that’s 6 weeks supply! Most operators like to keep it to 4 weeks or less, so in this case, you’d have to reduce the stock from $24,000 to $16,000. That’s $8,000 cash back into the bank! See How to Measure and Dramatically Improve Your Bar Profits.
To do a similar calculation with food, work out the number of days of stock you hold. If it’s more than a week, you are probably overstocked.
Is your whole business overstocked? Are store room shelves loaded with old plates, bowls and saucers that won’t be used, or broken appliances? Is the office stuffed with years of old invoices and paperwork? Chances are the rosters are also overstocked with staff hours.
Other restaurant stocktaking considerations:
Remember the 80-20 Rule – most of your sales come from a small number of menu items e.g. if you have 50 items on the menu, probably 80% of your sales come from 10-12 items (20%), Weekly POS figures will identify what these are – can you eliminate some of the other 40? The same applies to your stock – if you have 200 stock items (from meat and vegetables to spice and sauces), probably 80% of what you serve is made using 20% of what’s in your fridge or storeroom (approx 40 stock items).
Advice from Foodie Coaches senior coach Jimmy Griffin:
‘When I first started stocktaking as Duty Manager in a pub I’d go down the sheet and then count how many of each item I saw. This meant that I was looking for the items on the sheet, not recording the items that were in the area. If a stock item wasn’t added to the inventory properly, I could miss it. I felt silly flipping through 8 sheets to find each item as I counted until I understood the reason behind it. So, if you can organize your areas vaguely alphabetically (or however else your inventory reports), it will minimise sheet flipping! Eg. I’d try to keep my spirits store organized by category (liqueurs) and then alphabetically so I could just count an area on one sheet rather than flipping from Aperol to Chartreuse on the next page.’
Check the other useful blog posts on the Foodie Coaches website…
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