Do we charge for bread or not?

Replies to This Discussion

Permalink Reply by Steve on March 28, 2008 at 9:28am

Jeffrey
Warm Sourdough loaves of bread at seafood restaurants on the waterfronts of the west coast go hand in hand, especially if you have been in business for 30 years. It's an integral part of our brand. (Thanks for asking; just answering the question reconfirms this in my mind)

We offer bread as part of our service sequence and I would guess that about 95% eagerly accept. We have tried the “upon request only” approach but that generated too many guest complaints.

We serve a lot of bread. Last years complementary usage was close to $150,000 worth. With the huge increase in prices this year it will easily reach $210,000.

Since September 11 we have become a well oiled machine when it comes to cost efficiencies. Everything easy has been done and we are now looking for relief in the “Sacred Cow” fields. Bread is one of those areas. Because it is part of our brand and because historically it has been relatively inexpensive it just hasn’t been on the radar until now.

Other areas we are looking hard at are:-

Credit Card expense. $350,000 – We have changed providers several times already and have the lowest fees we can find. But wouldn’t it be great if we could figure out how to get people to use cash again or if not, at least add the fee at the bottom of the check the same as you do with tax?


-We operate in Seattle which has been one of the hottest (expensive) real estate markets in the country. We’re just now beginning to see the slowdown the rest of the country is talking about and are aggressively trying to lower our lease contracts, considering moving to more economically favorable locations or create a different brand altogether that is better suited for recessionary times.

- For example the state of Washington is one of only six states that does not recognize tips as part of minimum wage. Therefore all tipped employees get $8.07 per hour instead of the much, much lower wage the rest of the country pays tipped employees.

How could we reduce the number of FOH employees (60% of current work force) and still provide a great place for our guests to enjoy fabulous food and beverage with their friends or loved ones? There are some radical ideas I've thought about.

-And don’t even get me started on Repairs and Maintenance – there’s another couple hundred grand I wish we could eliminate. We have spent a great deal of time and effort in this area but between fuel charges, trip charges and increased service fees it seems to be a loosing battle. Again we have done all the easy stuff and the demand for HVAC, Refrigeration, Plumbing, Equipment Repair, IT, etc. has been so incredibly high for so long that this area is just plain expensive.

There’s more but that’s enough for now. Got any ideas?
Steve

Permalink Reply by Steve on March 31, 2008 at 8:41am

Thanks Jeff,
I agree on raising prices, the trick and art of course is to up the perceived value for he guest.

No we don’t bake the bread in house. Sometimes I wish we had the space and the equipment to do it. But then again it is not our expertise and may be just a distraction to our core business.

For now credit card expense is part of our pricing strategy but it would be nice to open up a “Blue Ocean” in this area. http://www.blueoceanstrategy.com/

Leases, leases, leases! And I thought I was in the restaurant business! I am in a fierce arbitration battle right now where the landlord is trying to move to an escalating lease that will double our current lease in five years! Be prepared for steep legal and arbitrator fees!

On tips I was referring to the fact that Washington State does not recognize tips as part of minimum wage. In most states, tips are recognized as income and you are allowed to deduct a portion of that wage from the hourly rate you pay the tipped employee. So instead of the $8.07 per hour we pay now it could be something like $3.00 per hour.

This is huge! The last 75 cent raise in minimum wage cost us $220,000! That goes a long to explaining why restaurants in Washington are smaller and less flamboyant than other parts of the country!
.
Have a great week

Steve

Permalink Reply by Steve Paterson on March 28, 2008 at 7:44pm

I say continue to give it away, and average out the $140,000 across how many tables your serve in a year, and raise your regular menu prices acordingly.

Permalink Reply by Steve Paterson on March 28, 2008 at 7:47pm

Steve
Since you're so spanked on FOH labor, have you looked at adding some sous vide items to reduce labor and improve portion control in the BOH?

Permalink Reply by Steve on March 31, 2008 at 8:16am

Good morning Steve
Sorry for my ingnorance, what are sous vide items?
Steve

Permalink Reply by Sean Cunningham on April 24, 2008 at 7:33am

These answers all seem good and well, however none seem to be fitting of what was learned at the CiA. At the CiA we were thought that the bread is part of the almighty "Q Factor"

What is the Q factor? Well it is part of operational costs, or rather part of food cost. Just like when you cost out how much each plate of food costs to put out, (rather each dish) the bread should be factored into that. So for example, your striped bass dish costs lets say 7 dollars to put out, so 8 oz fish, plus garnish and or sides. so lets triple that to 21 dollars... And then add labor, add "Q factor", and add whatever loss may be if you don't sell your fish. So lets assume that brings the dish to 25-27$ Which seems very reasonable depending on the establishment.

Or if 27 or 25 seems to expensive, lets bring it down to a 6oz portion, which still is very good at any restaurant. We can bring your plate costs down to 21-25.

Your customers is what keeps you alive, if preceived value goes down... you wont have a restaurant to serve bread in... So rather then charging for bread, which if someone did that to me in a restaurant i would flip shit! seriously, who pays for the bread. imagine if i had to pay for the tortilla chips i got at a Mexican restaurant!!! Grrr

Anyways, lets say that doesn't work out for you, SERVE CRACKERS!!! they are so much cheaper... or if that doesn't work, make a damn good bread dish. And sell it as an app, and in its place, serve an Amuse, make a soup (a thick one!) and serve it in a small shot like espresso cup.

I once ate at a steakhouse that did not serve any bread, however they did have a brioche app with a beshmel sauce that was fantastic, and thats how i got my carbs, everyone loved the dish, and no one noticed the lack of free bread. I hope this has helped more so.

Permalink Reply by Christopher Dressler on April 10, 2009 at 10:34am

Hi Steve,

If your bottom line is really feeling the pinch and the continuation of your operation is at stake, you have no choice but to generate revenues or cut expenses somewhere to cover it. If, on the other hand, the 150k is just a shock but the bottom line is still healthy, suck it up. Only you can make that call.

Any one of the thoughts mentioned already will have a impact on your predicament. In terms of raising prices, I think many of us look at it wrong. I may be a positivist, but ultimately I think necessary price increase are a service to our regular guests. If I know my operation is tight and I have no choice but to raise pricing, I tell my clients/guests the truth and raise them. If the option is ceasing operation, the guests would rather pay an extra buck and spend Saturday night at the place they have been comfortable with for the last 30 years. Either scenario, be it an average across table usage as one indicated, or the q factor which is indirectly tied forcasted usage will work. Use which solution is easier to manage. If your accounting organization gives you easier access to treating it as a semi-variable cost, do that. If you use a culinary management systems that is tied to food cost directly and lets you cost out items in seconds, use that.

However, I really think that if you are going through six figures worth of bread a year, you should be injecting capital and expanding operation to include baking facilities.

Permalink Reply by Christopher Dressler on April 10, 2009 at 10:56am

Heck, I forgot to address the obvious one mentioned by Mr. Cunningham--alternate usage. Two straight forward methods. One if there is a large disparity between raw and adjusted food cost for the particular item and ordering is already as tight as reasonable, it becomes a grocery item that should be used as ingredient elsewhere: bread crumbs, soup thickens, etc. Or, additional menu items that have bread as a salable food item. Bread pudding (I do a savory one as a starch equivelent kind of like a stuffing) Bread bouls for soup, retail sale of the item, etc.

Permalink Reply by Steve on April 10, 2009 at 12:55pm

It's been quite a while since I've been on fohboh - thanks for everyone’s input.

Here's an update:

We have two brands. The Arnies Restaurants (NW seafood waterfront destination $$$) and Coho Cafe (Neighborhood seafood - southwest, Asian, & northwest cuisine $$)

We felt the tradition of serving sour dough loaves in Northwest waterfront restaurants and the higher price point they command was to high of a hurdle to risk deleting the bread program. We did however eliminate the bread service from our neighborhood Coho Café brand in December 2008.

We were completely stunned at how easy it turned out to be. After the first 3-4 weeks all negative comments concerning bread virtually stopped. Only two parties said it bothered them enough they would not come back (one returned the following week) but by far the overwhelming majority said they would rather us do that than raise prices.

Things are so easy in hindsight!

Steve

Permalink Reply by Steve Paterson on April 12, 2009 at 7:05pm

...and I think it's safe to say your food ingredient COG's have come down quite a bit.
I'm curious how much.

Have you considered a monthly R&M program for preventative maintanance?

Sous Vide...super high quality prepared items, like Slow Braised Short Ribs, Duck Confit, Veal Osso Buco...killer CoP items with no prep, no waste, 100% Yield...and virtually no labor....just steam and serve.

Permalink Reply by Joe Koran on July 22, 2009 at 6:16am

The concept of charging for bread is interesting because many restaurants give the prision greeting; bread and water before anyone has a chance to order a thing. This canibalizes the potential for appetizer sales and possibly the simple upsale of water: would you prefer "city water" or bottled water?
Servers are sales people. Give them a chance to sell before the good are given for free!