CONTROLLING FOOD

SALES
Sales Control

Sales Control is merely synonym for revenue control, a

collection of activities designed to ensure that each order
place by a costumer results in appropriate revenue for the
enterprise.
Critically important to the financial health
Goals of Sales Control

 Optimize the number of sales – to undertake those activities

that are likely to maximize the numbers of customers – that is
to attract a sufficient number of customers for the type of
restaurant one intends to operate.
 Maximize profit – that is, obtain the maximum gross profit
from customers who are within the foodservice facility.
Goals of Sales Control
Maximization requires the following:
Pricing products properly
Selling those products effectively

Principal Goals:
Optimizing the number of customers, maximizing profit and
controlling revenue
OPTIMIZING THE NUMBER OF CUSTOMERS
 Assuming the sufficient numbers of potential customers available within the
distance.
 Target market
 Advertisement
 Incentives
 These are the eight following eight factors for most people:
1. Location
2. Menu item differentiation
3. Price acceptability
OPTIMIZING THE NUMBER OF CUSTOMERS

4. Lighting and Décor

5. Portion sizes
6. Product quality
7. Service Standards
8. Menu diversity
OPTIMIZING THE NUMBER OF CUSTOMERS

1. LOCATION
OPTIMIZING THE NUMBER OF CUSTOMERS

HOMOGENEOUS

DIFFERENTIAT
ED
2. Menu Item Differentiation
OPTIMIZING THE NUMBER OF CUSTOMERS

HOMOGENEOUS product
- Is one that is so similar to another that customers do not
have a preference and will purchase whichever costs less.

2. Menu Item Differentiation

OPTIMIZING THE NUMBER OF CUSTOMERS

***Grilled Chicken Ceasar Salad

The quality may vary from one location to the next, but, when two
or more establishments of similar quality standards offer this item
on their menu.

2. Menu Item Differentiation

OPTIMIZING THE NUMBER OF CUSTOMERS

DIFFERENTIATED product
- Are sufficiently different from others in their class that
customers develop preferences for them. Customers may
actually consider differentiated products unique.

2. Menu Item Differentiation

OPTIMIZING THE NUMBER OF CUSTOMERS

***Grandview Bistro
They are not the same as other restaurants
vicinity.

***Signature Items***
2. Menu Item Differentiation
OPTIMIZING THE NUMBER OF CUSTOMERS

One of the most important factors in customer

selection of one restaurant over another is price.

3. Price Acceptability
OPTIMIZING THE NUMBER OF CUSTOMERS
PRICE SENSITIVE
- Meaning that there is no relationship between sales price and sales
volume.
- As the price of menu item is increased, it can be expected that fewer
customer will order that item.
- In food and beverage business, the more homogeneous a men item the
more price sensitive it is.
3. Price Acceptability
OPTIMIZING THE NUMBER OF CUSTOMERS
“Beauty is in the eye of the beholder”

Each establishments attracts customers who prefer or at least accept

its lighting and décor. Lighting and décor also do that some
costumers may find pleasing are likely to be less so to others.

4. Lighting and Decor

OPTIMIZING THE NUMBER OF CUSTOMERS

The quantity of the product given a customer

must be appropriate to the clientele that a food
and beverage operator wishes to attract.

5. Portion Sizes
OPTIMIZING THE NUMBER OF CUSTOMERS

QUALITY – a term that conveys different

meanings to different people

This are the rating system created by the AAA

(American Automobile Association) and the mobil travel guide

6. Product Quality
OPTIMIZING THE NUMBER OF CUSTOMERS
Figure 12.2
Diamond and Star Ratings
AAA Diamond Ratings
• 1 Diamond – Affordable, good, casual dining
• 2 Diamonds – Informal, family-oriented dining
• 3 Diamonds – Creative, upscale, adult-oriented dining
• 4 Diamonds – Luxurious fine dining, excellent service
• 5 Diamonds – World-class dining experience, impeccable service

Mobil Star Ratings

• One Star – Culinary specialty, local flair, or unique atmosphere. Value is considered in this category.
• Two Star – Freshly prepared food, cordial, efficient, and clean, often showcase a distinct cuisine.
• Three Star – Skillfully prepared food, specific style, professional service, décor of excellent quality.
• Four Star – Exceptional, Creative, complex, refined personal service.
• Five Star – Elite, flawless, exceptional food, superlative service, elegant décor, and exquisite
presentations.

6. Product Quality
OPTIMIZING THE NUMBER OF CUSTOMERS
Anyone who has patronized restaurants and other foodservice operations
can recognize that many different types of service are available. Some
service is of very high quality: some much less so. Fast-food restaurants
and cafeterias tend to provide comparatively little service beyond the basic
requirements, whereas some classic hotel dining rooms and large number of
fine restaurants offer extraordinary levels of service, with some appearing to
have more staff than customers.
7. Service Standards
OPTIMIZING THE NUMBER OF CUSTOMERS

In establishments offering extensive service, it is

sometimes of the very highest quality – swift,
unobtrusive, and approximating an art form. More
commonly, however, the service is likely to be indifferent
– slow, disorganized, intrusive – and the servers obviously
untrained.

7. Service Standards
OPTIMIZING THE NUMBER OF CUSTOMERS

Exception of those offering relatively homogeneous products that are

commonly accepted and consumed in vast quantities because of their
comparatively low prices, most restaurants find it necessary to have a
broad range of items on the menu.

8. Menu Diversity
OPTIMIZING THE NUMBER OF CUSTOMERS

A menu that includes only two or three entrée choices is clearly of

more limited appeal than one offering 12 or 15. Any given diner
would be more likely to find an acceptable entrée on the longer menu.
In restaurants that depend heavily on repeat business, a limited
menu can have significant negative impact on the number of times
any given customer will return within a specific period of time.

8. Menu Diversity
OPTIMIZING THE NUMBER OF CUSTOMERS
The number and range of items on many menu are governed by
several important considerations, including the equipment available in
the kitchen, the culinary abilities of the kitchen staff, and the cost
considerations that arise when the large number of items offered
results in considerable leftover food. As a general rule, the greater the
scope of the menu consistent with these other considerations, the
larger the segment of the market to which the menu will appeal, and
the more likely the restaurant will be to succeed.
8. Menu Diversity
MAXIMIZING PROFIT
1
Pricing Products Properly
2
Selling Effectively
MAXIMIZING PROFIT
Pricing Products
Properly
Restaurants normally have standard sales price for the menu items they
offer. The sales price for menu items are usually established by restaurant
owners or managers and are communicated to customers via printed menus or
conspicuously posted signs. Because the sum of the prices paid by all
customer for their menu selections is the total food revenue for a restaurant,
it should be evident that these sales prices are critically important n
determining the degree of profitability for any restaurants.
MAXIMIZING PROFIT
Pricing Products
Properly
Methods for establishing menu prices:
1. Matching competitors’ prices
2. Calculating prices from costs and cost percent
3. Adding desired contribution margins to portion costs.
MAXIMIZING PROFIT
Pricing Products
Perhaps the most widely used approach to menu pricing is one that may best be
described as FOLLOW THE Properly
LEADER – establishing prices that meet hose
of competitors.
The use of imitative approach is not restricted to those who lack the knowledge to do
otherwise; it is not uncommon among seasoned and successful operators. Many
restaurateurs believe that if their prices are higher of those than nearby competitors,
they will lose business to the competition. Tacitly, they are defining their products as
homogeneous rather than deferentiate.
MATCHING COMPETITORS’
PRICES
MAXIMIZING PROFIT
Pricing Products
Properly
Although a policy of pricing to meet the competition may be
satisfactory for some operators in some markets, it can lead to
disastrous consequences for others. If menu prices are low, so are
contribution margins; therefore, greater number of customers are
required to cover fixed cost and provide a given level of profit.

MATCHING COMPETITORS’
PRICES
MAXIMIZING PROFIT
Pricing Products
The second approach to menu pricing, calculating prices from costs and cost percents,
has two variations. Properly
The first variation proceeds as follows:
Given portion cost for any menu item, one can calculate a menu price so that the
portion cost will be some fixed percentage of that price. If, for example,
arestaurateur wanted food cost-to-sales ratio to be 40 percent, he or she could set a
menu price for each item merely by dividing 0.4 into the portion cost and adjusting
the resulting answer to a suitable amount to print in a menu.CALCULATING PRICES
FROM COST AND COST
PERCENTS
MAXIMIZING PROFIT
Pricing Products
Thus, a figure such $14.24 would be adjusted to $ 14.25, a more common
Properly
menu price. If this approach were followed with literally every menu item ,
the cost percent for operation for any period would be 40 percent , provided
that the staff followed all established standards and standard procedures for
purchasing, receiving, storing, issuing, and producing food. The food cost
percent figure to use could be determined by subtracting profit, fixed cost,
and labor cost as percentage of sales, from 100%. CALCULATING PRICES
FROM COST AND COST
PERCENTS
MAXIMIZING PROFIT
Pricing Products
The second variation is slightly different. With portion cost
Properly
known, a manager sets tentative menu prices and then forecasts
sales volume for an upcoming period. Projected figures for total
cost, total sales, and food cost percent may be determined by using
the Menu Pre-Cost and Abstract illustrated and discussed. If the
projected cost percent is judged unsatisfactory, then portion costs
menu prices and even the forecast can be adjusted until a realistic
CALCULATING PRICES
and satisfactory potential result is achieved. FROM COST AND COST
PERCENTS
MAXIMIZING PROFIT
Pricing Products
Properly
The third approach, adding contribution margins to portion costs,
I becoming more common in the industry. This approach requires
that the foodservice operator determine the average contribution
margin required to cover costs other than food and to yield the
desired level of profit at the expected level of sales volume.

Adding Contribution Margins to

Portion Cost
MAXIMIZING PROFIT
Pricing Products
Properly
This average contribution margin is then added to the portion
costs of menu items to determine their menu prices. The use if this
approach can be illustrated with figures abstracted from the
statement of income for Julio’s, a hypothetical restaurant adjacent
to a large shopping mall. The statement of income indicates the
following for a period during which 30,000 customers were served.
Adding Contribution Margins to
Portion Cost
MAXIMIZING PROFIT
Pricing Products
Food salesProperly
$500,000
-- Cost of Sales 200,000
= Gross profit $300,000
-- All other cost 250,000
= Profit $ 50,000
Adding Contribution Margins to
Portion Cost
MAXIMIZING PROFIT
Pricing Products
Properly
If one divides the $ 500,000 food sales by the 30,000 customers, it is
apparent that each customer in this example spent an average of
$16.67. This figure is known as the average sale per customer, as
described from first chapter. Dividing the $300,000 gross profit by
the 30,000 customers, it is also apparent that each customer
contributed an average of $10.00 to covering cots other than food and
providing profit. Adding Contribution Margins to
Portion Cost
MAXIMIZING PROFIT
Pricing Products
This method suggest thatProperly
each menu item should be priced at $ 10.00
above portion cost, regardless of the item. For example, a steak with a
portion cost of $ 8.00 would be priced at $ 18.00, and a pasta item
costing $2.50 would be priced at $12.50. If this approach were
followed, and if sales volume matched or exceeded forecasts, the
minimum acceptable dollar profit would be ensured, provided that costs
were kept strictly under control in all areas.
Adding Contribution Margins to
Portion Cost
MAXIMIZING PROFIT
Selling Products
Effectively
Essentials, a restaurant has two principal means available for selling
products effectively:

 The Menu
 The Sales Techniques used by the Staff
MAXIMIZING PROFIT
Selling Products
Effectively
The menu is the primary sales tool in most restaurants. Because
menu items normally have different costs, contribution margins,
and cost percents, the foodservice operator has an opportunity to
exercise some measure of control over cost percent and gross
margin by preparing menu that achieve maximum sales volume.

The Menu
MAXIMIZING PROFIT
Selling Products
Effectively
Most important elements in menu preparation:
1. Layout and design
2. Variety
3. Item arrangement and location
4. Descriptive language
5. Kitchen personnel and equipment
The Menu
MAXIMIZING PROFIT
Selling Products
1. Layout and Design
Effectively
The layout of a menu is the way in which the menu items will placed on the
menu. It is important to note that the menu mix, also known as the menu
item popularity index, as discussed in the previous chapter, will be very
different for two identical menus in which the only modification was to
rearrange the order of the items. This knowledge has been used to identify
areas of the menu known as prime space; this is the area that the guest is
likely to read first.
The Menu
MAXIMIZING PROFIT
Selling Products
2. Variety
Effectively
For a menu to have maximum public appeal, it should offer a suitable variety of
foods, preparation methods and prices. Variety will satisfy the needs of a broad
market and will help the restaurant operator capture the largest possible number of
customer. Appearance f foods is of great importance. The number of combinations of
foods that may appear together on plates is vast, and some more interesting and
attractive than others. The possibilities for providing pleasant and appropriate
contrast in color, contour and texture are always in the mind of the experience menu
writer.
The Menu
MAXIMIZING PROFIT
Selling Products
3. Item Arrangement and Location
Effectively
One of the most significant menu-making principles involves the physical
arrangement of items on the menu. Items on the menu seen first by customers tend
to be ordered more frequently than those seen later. It is generally agreed that a
person’s eyes are first focused on the center of a menu. And unless that persons
attention is otherwise directed, items listed first and at the top of a list are seen first
and make the greatest impression. It stands to reason that those items will sell in
greater quantities than if they were placed a the bottom of the list.
The Menu
MAXIMIZING PROFIT
Selling Products
4. Descriptive Language
Effectively
The dining experience begins well before customers taste the food they have
ordered. It may begin with the first impression of the food operation, when the
restaurant is first described by a friend, when a potential customers read a
review or an advertisement or when they first enter the premises. The physical
appearance of the establishment and its staff and the attitude of the staff
toward customers will make or reinforce an initial impression, or change it.

The Menu
MAXIMIZING PROFIT
Selling Products
4. Descriptive Language
Effectively
The menu and the language used to describe menu items may make a good
impression and induce customer orders. On one hand, the descriptions of foods
may help make the customer hungry and may increase the number o sales to a
level that might otherwise have been impossible. On the other hand, a menu that
describes available items poorly may actually decrease sales. A food and
beverage operator can exercise great influence over the average check by using
written descriptions that make menu items sound interesting.
The Menu
MAXIMIZING PROFIT
Selling Products
5. Kitchen Personnel and Equipment
Over the years, there Effectively
have been many horrible examples of foodservice operators
adding various items to their menus that were completely beyond the culinary skills of
the kitchen staff. There have been instances of foodservice consultants creating menus
with items requiring higher levels of culinary skill than were available in the local
labor market. And everyone knows of at least one case in which a specific chef who
has preparing menu items that were perfect delights to a restaurant’s customers quit
and left behind a staff that wa unable to prepare the items satisfactorily.
The Menu
MAXIMIZING PROFIT
Selling Products
6. Sales Techniques
Effectively
The second means for selling products effectively is to develop appropriate
sales techniques to be used by servers, who are, after all, a restaurants
sales force. In many instances, the customers decision to order an item (or
not to order it) is influenced by the server. Because of the important role
that servers play in influencing customers selections, restaurants mangers
are usually interested in developing appropriate sales techniques for their
servers and in providing some basic sales training.
The Menu
Revenue Control are aimed t one clear and simple goal: to ensure
that all food served produces the appropriate revenue for the
enterprise.
CONTROLLING REVENUE
The Goal of Revenue Control
Accurate recording of sales and inflows of appropriate revenue are both
desirable and necessary to the successful operation of a restaurant, neither can
be assumed. There are many possibilities for errors to occur in the recording of
sales some are accidental; others are not. Sales may be incorrectly recorded;
incorrect prices may be charged; checks may be lost, stolen, or simply not used
at all and sales that have been correctly recorded may not always bring revenue
to an establishments because of the actions of dishonest employees or
customers.
CONTROLLING REVENUE
The Goal of Revenue Control
Accurate recording of sales and inflows of appropriate revenue are both
desirable and necessary to the successful operation of a restaurant, neither can
be assumed. There are many possibilities for errors to occur in the recording of
sales some are accidental; others are not. Sales may be incorrectly recorded;
incorrect prices may be charged; checks may be lost, stolen, or simply not used
at all and sales that have been correctly recorded may not always bring revenue
to an establishments because of the actions of dishonest employees or
customers.
 CONTROLLING REVENUE

Establishing Standards for Revenue

Control
Documenting all sales
Pricing all sales correctly
Verifying that all sales are recorded
REVENUE CONTROL USING MANUAL MEANS

The specifics required to achieve the necessary level of control in

those establishments using manual means require that guest checks
be used to record sales. A great many systems and procedures for
manually controlling food sales using guests checks are currently in
use in the industry.
REVENUE CONTROL USING MANUAL MEANS

One of the most basic steps in manual food sales control is o require
that each menu item ordered be recorded in some way. The traditional
method for attending to his has been to require that servers record
guest’s menu selection and the menu prices of those selections on paper
form called guest check or sales checks. Guest checks are used almost
universally to handle seven functions.:
REVENUE CONTROL USING MANUAL MEANS

Guest Checks function:

1. Help servers remember the specifics of guests’ orders
2. Provide a written food order to kitchen personnel
3. Give itemized bills to guest
4. Maintain written records of portion sales to add to a sales history
5. Prove the accuracy of cashiers work
6. Verify the accuracy of prices charged
7. Provide the records required for tax purpose.
REVENUE CONTROL USING MANUAL MEANS

USING NUMBERED CHECKS

Most establishments that use guest checks order sequentially
numbered checks. These are purchased from printers or
stationaries. When placing orders for new guest checks , managers
are careful to specify their serial number. This normally starts
with he next number in a sequence of checks previously ordered –
not unlike the numbering system use on checks from a checking
account with the bank.
 REVENUE CONTROL USING MANUAL MEANS
FIGURE 12.4
Cashier’s Record of Checks Distributed to Servers
Cashier H. Martin Date 3-Sep
Check No. Waiter No. No. Served Table No. Waiters
Signature
500 1 4 2 J. Jones
501 1 3 3 J. Jones
502 1
503 1
504 1
505 2 3 5 Peter Smith
506 2 6 6 Peter Smith
507 2
508 2
509
510
REVENUE CONTROL USING MANUAL MEANS

Assigning responsibility for specific individual checks makes it

possible to monitor other elements of servers work as well. One of
these is the legibility of the writing. If guest checks provide the
raw data that must be summarized before being added to a sales
history, then it is obviously important that management be able to
read the guest checks. For this purpose, illegibility is likely to
mean inaccuracy
REVENUE CONTROL USING MANUAL MEANS

To retain the desirable qualities of the food checker

system while eliminating the problems, some restaurants
follow a standard procedure that is usually referred to
as the DUPE SYSTEM. Dupe is an
abbreviation of the word duplicate. A standard
requirement of this system is that a duplicate copy be
made of each order.
REVENUE CONTROL USING MANUAL MEANS

Busy servers can make errors. Incorrect prices may be charged for
menu selections and incorrect selections can be written on checks.
Errors of this nature are normally accidental; sometimes they are
purposeful. For example, a price of $19.95 may be written for a
sirloin steak that is listed at $29.95 on the menu. Or the $29.95
steak order may be written on the check as a chopped steak with a
menu price of $14.95
REVENUE CONTROL USING MANUAL MEANS

Some establishments that use the dupe system require that servers write food order,
but no prices, on checks as the orders are taken. Then, on the way to the kitchen
to place the orders, each server records prices on the checks and dupes with a
machine similar to a cash register. The register dispenses a printed receipt, which
is attached to the dupe before kitchen personnel will issue any food. When this
procedure is followed, it is possible at the end of a meal period to compare the
readings from the kitchen register with the cashier’s register and to locate missing
amounts.
REVENUE CONTROL USING MANUAL MEANS

Most restaurants employ cashiers who are assigned responsibility for

taking care payments from customers and recording sales as the customers
leave the restaurants. They usually stationed near restaurant exits,
although some work in other locations. Many establishment upgraded the
equipment that cashier’s use to record sales (cash sales, charge sales, and
portion sales for a sales history) but continue to place cashier’s at the
familiar workstations adjacent to the front door. Although today’s
equipment is different, the basic requirements of the job are not.
REVENUE CONTROL USING MANUAL MEANS

Restaurants cashier’s today are following the same general principles

established by restaurant mangers in years gone by. For proper revenue
control, sales are always recorded in a register as the sale is being recorded
so that the amount recorded is printed on the check. Thus, all guest
checks are endorsed, regardless of how they were settled. The printed
endorsement helps differentiate between guest checks that have been settled
and those that had not.
REVENUE CONTROL USING MANUAL MEANS

It is still common practice to require cashiers to record the breakdown of

checks into appropriate categories (food sales, taxes, and tips, for example
in one category and cash sales and charge sales in another). Although
this is no longer done on paper – mechanical cash registers, electronic cash
registers, and now computers are used to do the breakdown – the results
are perhaps best illustrated by the traditional control sheet.
 REVENUE CONTROL USING MANUAL MEANS

Figure 12.5
Restaurant Sales Control Sheet
Check # Waiter # # Covers Food Beverage Tax Tip Total Cash Charge Detail
Sales Sales
600 2 3 $ 35.75 $ 20.50 $ 3.38 $ 9.00 $ 68.63 $ 68.63 M/C
601 1 4 $ 56.80 $ 25.00 $ 4.91 $ 12.00 $ 98.71 $ 98.71 VISA
602 2 2 $ 42.80 $ 10.00 $ 3.17 $ 55.97 $ 55.97
603 2 2 $ 36.90 $ 2.21 $ 39.11 $ 39.11
604 1 4 $ 72.80 $ 22.00 $ 5.69 $ 18.00 $ 118.49 $ 118.49 AMEX
605 1 4 $ 56.70 $ 35.60 $ 5.54 $ 13.00 $ 110.84 $ 110.84 M/C
Totals $ 301.75 $ 113.10 $ 24.90 $ 52.00 $ 491.75 $ 95.08 $ 396.67
REVENUE CONTROL USING MANUAL MEANS

In this illustration, it should be noted that the total

of food sales, beverage sales, taxes, and tips is equal
to the total of cash sales and charge sales. Thus,
$ 301.75 + $ 113.10 + $ 24.90 + $ 52.00 = $
491.75; also
$ 95.08 + $ 396.67 = $ 491.75.
REVENUE CONTROL USING MANUAL MEANS

In this illustration, it should be noted that the total

of food sales, beverage sales, taxes, and tips is equal
to the total of cash sales and charge sales. Thus,
$ 301.75 + $ 113.10 + $ 24.90 + $ 52.00 = $
491.75; also
$ 95.08 + $ 396.67 = $ 491.75.
REVENUE CONTROL USING COMPUTERS
Today, because of technological advances, many food service operators have
been able to end their dependence on the traditional guest check. Fast food
operations with limited menus, for example, record guest’s selection at
computer terminals by depressing keys marked with the names of menu
items. Even in restaurants dedicated to fine dining, servers can be observed
recording guests selection in small terminals located at side stands using
three digit or four digit codes assigned to the menu items, or using touch
screen monitors that transfer orders to the kitchen or bar.
REVENUE CONTROL USING COMPUTERS
Some innovative restaurants have incorporated the use of
personal digit assistant (PDA) types devices with their computer
systems. These wireless handheld device allow servers to take
orders tableside and send them to the compute system then on to
the kitchen and bar. These system eliminate the need to wait in
line at busy terminal. In both fast food and fine dining
establishments additional features automatically look up correct
menu prices for the item selected and then calculate both tax and
total, printing itemized checks or bills for guest.
Ronald Arzaga
Aileen Joy Dagsa
Darwin Garcia
Jessa Mae Legaspi
Mark Vergel Bitalo
GROUP REPORTER