Is your restaurant or food store struggling? Do you want to know top industry statistical secrets for improving your business’ metrics?
We put together a guide to understanding food industry statistics and how to use your restaurant or store’s metrics to your benefit.
Check out what we discovered!
Why Worry About Collecting Data?
The key to utilizing your business’ metrics is to actually understand what those metrics entail and how to properly record them.
There are quite a few things that contribute to valuable data you need to be keeping an eye on. These things include:
- Tweets and Facebook posts
- Customers walking through your business’ door daily
- Every item ordered
- Amount of food being wasted
- Shift rotations of employees and individual employee shifts worked
- Promotions, coupons, and daily deals
All of these contribute to your business’ metrics. If you’re ignoring this valuable data, you may be missing out on opportunities to use that data to make new business decisions.
Data equals money, period. So how do you measure all that data to your benefit? And how do you figure out what to do with it?
There are a ton of ways to measure and use this data, and it may be an easier challenge than you think!
Food Industry Statistics – Gathering And Using Valuable Data
These tips will help you analyze and use important food industry statistics and data within your business.
Cleaning And Prepping Data
This is the hardest part of the process. If you don’t want to hire a professional to take care of the calculations for you, the steps are typically as follows:
- Get that data at the transactions stage. Keep a record of what is purchased and how much money is spent at different times during the day, week, and month.
- Keep it clean. There are a lot of things that can make your data useless, such as more than one data source with conflicting or incorrect information, useless details being recorded, irregular frequency of capturing data, etc.
- There aren’t a ton of tools around that can capture data perfectly, and each business has different data capturing needs. Sorting out this information and finding what type of data capturing software can prove useful will take some time.
Luckily, there are some restaurant and food store specific software companies that can assist in getting food industry statistics at the transaction level.
Effectivity is the difference between visitors to your business and customers of your business. Some people don’t walk out with a purchase, and that’s okay sometimes– but you should keep track of that in order to figure out what is exactly turning them away.
Calculating customer conversion ratios, or how many visitors to your store or restaurant become buyers, is a fairly simple formula:
CCR (Customer conversion ratio) = The number of transactions / Customer traffic x 100
You’ll need to know the number of transactions happening daily (yet another reason why collecting data at the transaction level is so important) and what your customer traffic looks like in order to calculate this ratio.
So what do you do with a customer conversion ratio? The average conversion rate is about 3%, so compare your calculation to that. If you’re suffering, use the internet to find suitable benchmarks for your business.
Keep An Eye On Key Ratios
Key ratios are important tools that your can use to evaluate your restaurant or food store’s performance.
Inventory Turnover Ratio
This is one of the most important things to keep an eye on in the food and grocery industry. Inventory turnover calculates how often a business turns over its inventory in a specific time period.
High turnover rates may not be critical for all business, but it is necessary for the food and restaurant industries.
A toy company may be able to keep items stocked for months or years before it needs to be swapped out for the newest and hottest toy trend, but food has a significantly smaller and more critical window due to food expiration.
Aim for high turnover rates and keep up on this data.
Food products and restaurant dishes have a low-profit margin when compared to something like real estate or designer fashion industries.
Grocery stores and restaurants equalize these margin by selling a larger amount of goods and dishes.
Calculating your sales ratios will help you figure out if you’re selling enough at the right price.
Supermarkets, food stores, and restaurants are constantly coming into the market. There’s quite a bit of competition– which is unfortunate because that can suppress prices and make it hard to navigate those very low profit margins.
Calculating your profit margin will allow you to figure out your earnings to costs ratio. A higher margin means that your costs for supplies are low and your earnings are significant.
Calculating your profit ratio and gross margin, use this simple formula:
Gross profits / Revenue
If you have a profit of $1,000 and revenue of about $250, your gross profit margin would be 4.
Calculating And Minimizing Food Waste
Even if you think your restaurant or food store is fantastic at minimizing food waste, you may be surprised by what you see once that is measured.
In the United States alone, around 3.3 lbs of food per thousand dollars of revenue are wasted by restaurants. That roughly translates to nearly 16% of food loss across the food industry on average. That’s a lot of wasted food.
Not only are you throwing away money when it comes to food waste, 84% of the food your restaurant or food store wastes ends up in a landfill.
There are so many benefits to reducing food waste, including:
- Economic growth
- Social contribution
- Environmental protection
- Increasing revenue
Calculating and minimizing food waste increases revenue and saves the environment. There are many ways to do this, but by far the easiest method is to invest in predictive ordering software that focuses on reducing food waste.
Predictive ordering software is fairly simple– it calculates how much food you will realistically need to order per month by analyzing various monthly factors your business experiences.
Pricing packages for food waste reduction software are usually very affordable and eventually pays for itself after you begin to see major food waste changes in your business.
Start Taking Advantage Of Those Metrics!
Was our guide to understanding food industry statistics and store metrics useful? Tell us what you think in the comments below!