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Clarion Group Announces New Ways to Cut Costs in Food Service Management

Rising food prices, especially for meats, can cause budget concerns for operators of corporate food services, but there are ways to reduce their impact, according to Tom Mac Dermott, president of Clarion Group, a food service management consulting firm.

Kingston, NH, June 05, 2014 --( “Managers who plan menus without considering market conditions are literally throwing dollars away,” he said. “Just raising prices to cover higher costs isn’t always a good answer and may be counterproductive. Customers are feeling the pinch too, and are likely to reduce their spending to offset higher café prices or find an alternative.”

“Having a good strategy for increasing customer satisfaction and sales and controlling costs is important at all times, but is critical when facing rapidly rising costs,” Mac Dermott says. “There are ways to work around rising prices.”

Prices on all foods, or foods in a category like meat, dairy, vegetables or fruit, don’t all rise at the same time or at the same rate – and some items may decline while others are going up. An astute corporate food service manager will keep revising menus to feature the less expensive products in a category, according to Mac Dermott.

“If your most popular entrees are rising in price, you can space them out a little further in the menu,” he adds, “such as every eighth day instead of every sixth.”

“Of course, that won’t work for standard menu items, like burgers and other grill foods, pizza and sandwiches customers expect to see every day,” he says. “But you can add different versions of the standard fare at price points that have a better margin.”

Introducing new menu items also works, he says. “Since the item is new, the price has no reference point. It will be most effective if it’s featured and promoted. Creating and promoting ‘combos’ – say, an entree with side orders and/or a dessert or beverage at a price that yields a lower percentage food cost – also can be successful.”

“Salads are an excellent item to promote,” Mac Dermott says. “The salad bar and prepared salads are often the highest-volume product category in a corporate food service operation, especially a location with a high percentage of women employees. Salads have an almost infinite variety of ingredients and ways to prepare, dress and present them.”

An “action station,” where a chef prepares specialty meals to order is both popular and cost-effective, according to Mac Dermott. The food isn’t cooked until the customer orders it. The leftover are raw ingredients, ready to be reused in a new, freshly made dish.

When it becomes necessary to raise prices, don’t increase them all at once. “Have a strategy and be selective,” he advises. “A price increase will be more easily accepted when customers are aware a product’s cost is going up. Check the prices in the restaurants in the surrounding area that your customers. When their prices go up, your increases will be more easily understood. You can safely raise prices on two or three items at a time, wait a month or two and raise a few more.”

“The absolutely worst way to try to counter rising prices is by ‘buying down’ – substituting lower-quality products for your standard ingredients. Lower grade foods may be less expensive,” he says, “but the other word for less expensive is cheap. Corporate food service customers are sharp and will notice the lower quality. They’ll notice and resent it. They’ll look for alternatives outside your café.”

About Clarion Group

Clarion Group is an consulting firm that advises companies, professional firms, colleges and universities, independent schools and institutions in the management, operation and improvement of their in-house employee/student food services, catering, conference, lodging and related hospitality services throughout the U.S. and Canada.

For information, contact:

Tom Mac Dermott, FCSI, President

Clarion Group
PO Box 158, Kingston, NH 03848-0158
603/642-8011 or Website:
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Clarion Group
Tom Mac Dermott

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