Revenue-revving routines . . . . .
Proper menu pricing is an important component of a successful concession, but it’s a tricky balance between bringing in dollars without scaring off your customers.
“Make sure the price points fall into fair market price for your venue,” Wilkinson says. “Go to the point where it’s as much as you can get without upsetting people to the point they won’t buy at all.”
That’s the trick.
“This is an inside-the-four-walls captive audience, similar to a movie theater,” Holtzman points out. At the movie theater, it seems acceptable to pay $4 for a soda, while at your neighborhood convenience store, you wouldn’t stand for it. “But 7-Eleven is not your competitor,” Holtzman adds, meaning that you don’t have to price your product that low. “Choose pricing in the middle of the road,” he says.
|PHOTO COURTESY OF STAR MANUFACTURING INTERNATIONAL INC.
|The appropriate equipment can make all the difference in your kitchen.
At the Wave Waterpark, Handler learned from working with the consultant that your cost for a menu item should be about 30 percent of what you’re selling it for.
“Let’s say a meal deal total cost [to us] is $1.50,” Handler explains. “We were selling it at $3. We should have been charging $4.50.” The consultant told him, simply, “You’re charging too low or you need to find a way to decrease cost,” Handler says.
No matter what your pricing, it makes sense to push the items with the highest profit margin, Wilkinson says. In general, soda sales offer high profitability. Selling brand-name soda already attracts customers. Selling it from a fountain machine rather than bottles offers even higher earning potential.
“If you have both [fountain and bottles], you’ll sell 50 percent of both,” Holtzman says. “But if you only have fountain, you’ll sell all fountain drinks, and it’s much cheaper.” Plus, it saves valuable inventory space, he adds.
Holtzman also suggests a clever marketing tactic when creating your menu: Include a menu item that out-prices other options, in turn making those other choices appear like a great deal.
“So when you have a $6.75 fish sandwich on your menu, the $3.50 hamburger starts looking really good,” Holtzman says. “Maybe you’ll sell a case of fish all season, but it’s a marketing ploy to sell other products.”
Another quick tip: “Don’t sell anything under $1,” Holtzman advises. “You don’t need to give anything away.”
Even the best-conceived menu won’t stand a chance if you can’t get customers through the line quickly. Sometimes the system hits a snag when employees get tired or lazy.
“Put some pressure on your staff to move faster,” Holtzman says. Good old-fashioned bribery can often do the trick. “Watch register A and register B and see who’s processing faster. Make it a contest to see who can ring the most orders faster—and then, watch them ring,” he says. Reward the faster of the two with some sort of bonus, maybe $5 or free tickets to another facility.
Problems can also arise when employees are unsupervised and inexperienced.
“Make sure you make your presence known often and unexpectedly,” Delaney suggests. “The hardest part with employees is not letting them give away food to their friends or themselves,” she adds. Besides serving as a check on your employees’ actions, your regular appearances send the message that you care about the concession, how it’s running and if the employees need anything.
|PHOTO COURTESY OF THE CITY OF VISTA&MDASH;WAVE WATERPARK
|Plenty of outdoor seating is included at Lilly’s Kitchen concession stand at the Wave Waterpark in Vista, Calif.
“When it’s really busy, we’ll go in and assist them,” Delaney says.
If certain processes are slowing down your employees, find out what they are and try to fix them.
“Listen to your staff and find out what problems they’re having,” Holtzman says. A common problem is long lines. When the heat is on, and you’ve got impatient, hungry customers, hand out menus to people as they wait or even take orders in line. Either way, when the customers get to the register, the cashiers don’t have to wait for an order. They just have to look at the ticket and ring in the order.
“And the customer doesn’t have to remember what he wanted,” Holtzman adds.
At the Wave Waterpark, Handler recalls that his grill would suffer huge backups.
“People used to wait up to an hour for a chicken sandwich at the barbecue,” he says. “So, we had a mob of people wanting their chicken and their money back.” Now, on busy days, the grill chefs have about 10 chicken sandwiches ready to go, so no one has to wait very long.
Cost-cutting concepts . . . . . . .
Those chicken sandwich revenues can also benefit from some solid cost-saving and dollar-stretching measures.
“Look at your supply channels to make sure you’re buying right,” Wilkinson advises. Handler used to purchase his sandwich buns from a large supplier and was unfairly charged for squashed buns. He now gets his buns from a warehouse store.
“They’re cheaper and more reliable than we were getting from our supplier, and they never run out,” Handler says.
It’s important to scrutinize your contracts with food vendors and subcontractors. Consultants have particular expertise with these contracts and can offer valuable assistance. When city of Aspen, Colo., Recreation Director Tim Anderson hired a food-service consultant to help develop the concession at his expanded recreation and golf center, he realized he and his staff were not well educated on how to negotiate the best contracts. While Anderson’s subcontractor had given him numbers as to what to expect in terms of sales, the consultant examined the contract closer.
|PHOTO COURTESY OF THE WILKINSON GROUP, INC.
|Vending machines are another food-service option, like these at Yerba Buena Ice Skating & Bowling Center, Mosconi Center, in San Francisco.
“We had numbers for a restaurant but nothing relevant to us,” Anderson says. “We thought they knew what they were talking about, but compared to the number of rounds of golf we do, it wasn’t on target.”
You might only give your contracts attention when they come up for renewal. At that point, you’re probably in the middle of so many other tasks that you hastily sign the contract to hustle it off your desk.
“When managers are in a hurry to dispense with this task, the easiest way to get rid of it is to just sign it,” Wilkinson says. “But more often than not, the circumstances of the contract are not as good as they could be.” You may save time in the short-run, but you could save money in the long haul if you take the time to examine the specifics upfront.
For one thing, the contract is typically created by the vendor or subcontractor, so it’s going to favor them and not you.
“Buyers have to make sure they put in their own safeguards,” Wilkinson says. For example, the Wave Waterpark was being charged a whopping $12 each time their food supplier made a delivery.
“We hadn’t even realized that,” Handler says. “They also had the power to send us, say, a more expensive cheese than we ordered and charge us for it saying that they had run out of the other cheese. We’re putting the power back into our hands.”
Handler also saved dough by making dough—for his pizza. He had been ordering 100 pizzas from a vendor, but they’d sit all day and suffer in quality.
“We tried doing a three-quarter cooked, and that was better, but it still requires effort, so we figured why not put that effort in and cut down on our costs at the same time,” Handler says. Now, he outsources the dough and can prepare crusts during lulls in concession activity.
|PHOTO COURTESY OF A.J. ANTUNES & CO.
|Like pizza, popcorn and nachos, hot dogs still remain good ol’ staples of the concession industry.
“We used to get an eight-slice pizza from a vendor for $6.25, and now I can make a pizza for $4.55,” he says, adding that his pizza also creates larger slices, providing a better product to his customers.
Another helpful change at the Wave Waterpark was investing in a point-of-sale system. While such software can cost thousands of dollars upfront, if you have the revenues to warrant it (the Wave now pulls in about $230,000 a year in concessions), it can make sense. Handler was able to track inventory and sales better than before, so he knew what was selling well and what was sitting on the shelves.
“For example, out of 10 ice cream flavors, we found that seven weren’t selling fast enough to make it worthwhile to keep them,” he says.
Whether you decide to purchase point-of-sale software, the important thing is to keep track of profit and loss.
“Really watch the numbers, and before the end of the season,” Holtzman says. “Don’t wait until July when you can’t really readjust anything.”
One element to consider is labor cost. Assess the number of employees and the hours they worked and determine the percentage of labor vs. the revenues for each day. You might realize that it’s not even worth opening the concession during certain hours.
“I see a lot of facilities staying open when they shouldn’t,” Wilkinson says.