Principles of Food, Beverage, and Labor

Cost Controls, Ninth Edition

 The first question operating managers
must ask themselves is very simple: "How
many guests will I serve today?" - "This
week?" - "This year?" The answer to
questions such as these are critical, since
these guests will provide the revenue from
which the operator will pay basic operating
expenses. 
 Forecasts of future sales are normally
based on your sales history since what has
happened in the past in your operation is
usually the best predictor of what will
happen in the future. 
 A sales forecast predicts the number of
guests you will serve and the revenues they
will generate in a given future time period. 
 You can determine your actual sales for a
current time period by using a
computerized system called a point of
sales (POS) system that has been
designed to provide specific sales
information. 
 Remember that a distinction is made in the
hospitality industry between sales
(revenue), and sales volume, which is the
number of units sold.
 Sales may be a blend of cash and non-cash.
 With accurate sales records, a sales history
can be developed for each foodservice
outlet you operate and better decisions will
be reached with regard to planning for each
unit’s operation.
 Sales to date is the cumulative total of
sales reported in the unit.
 Sales history is the systematic recording
of all sales achieved during a pre-
determined time period. Sales histories can
be created to record revenue, guests
served, or both.
 Guest count is the term used in the
hospitality industry to indicate the number of
people you have served, and is recorded on a
regular basis. For many other foodservice
operations, sales are recorded in terms of
sales revenue generated.
 Most POS systems are designed to tell you
the amount of revenue you have generated
in a given time period, the number of guests
you have served, and the average sales per
guest.
 When managers record both revenue and 
guest counts, information needed to compute 
average sales per guest, a term also known as 
check average, is provided.

Total Sales
Number of Guests Served=Average Sales per Guest
Maintaining Sales Histories 
Sales history may consist of revenue, 
number of guests served, and average 
sales per guest.  You may want to use 
even more detailed information, such as 
the number of a particular menu item 
served, the number of guests served in a 
specific meal or time period, or the 
method of meal delivery (for example, 
drive-through vs. counter sale).
1. By operating period, such as one week or
month, so that all sales records for an
entire operating period can be viewed
together on one page, card, or screen
2. By day of the week, so that all sales
records for a given day (Tuesday, for
example) for a period of several weeks
can be compared.
3. By entrée item, so that the degree of
popularity of a given item can be seen
over time.
 One of the most common of these conditions is
the weather. Most foodservice operators find that
weather conditions have a noticeable impact on
sales volume. In many establishments, bad
weather has a clearly negative impact on sales
volume.
 Hotels and motels in major metropolitan centers
often find the impact of weather on sales to be
the opposite: Bad weather seems to increase
food and beverage sales in these properties,
probably because it discourages guests from
going out to nearby restaurants.
 Special events can decidedly influence sales
and are often included in sales histories.
The occurrence of a national holiday on a
particular day or the presence of a
particular convention group in a hotel can
affect sales considerably. So can such
varied conditions as faulty kitchen
equipment, a torn-up street in front of the
restaurant, or a major sale at a nearby
store.
 In addition to keeping records of numbers of
portions sold, many foodservice operators
use the data to determine a popularity
index. Popularity index is defined as the
ratio of portion sales for a given menu item
to total portion sales for all menu items as
illustrated in Figure 8.4.
 The popularity index is calculated by
dividing portion sales for a given item by the
total portion sales for all menu items. The
index may be calculated for any time period.
 Popularity index = Portion sales for
Item A
Total portion sales
 A usual first step in forecasting is to
predict total anticipated volume: total
numbers of customers anticipated for
particular days or particular meals.
 To arrive at a figure, one refers to the
sales history to find the total number of
sales recorded on each of a number of
comparable dates in the recent past.
 When great differences are apparent,
reasonable efforts must be made to
determine the reasons for the differences.
 When the effects of surrounding conditions
have been evaluated, the next step is to
judge the extent to which these conditions
will exist and affect sales on the particular
date or dates for which one is preparing the
forecast.
 This may involve checking a local calendar
for coming events, following weather
forecasts, and looking into various other
relevant sources of information.
 After these steps have been taken, it is
possible to estimate the total business
volume that may be anticipated for the day
or dates for which the forecast is being
prepared.
◦ For example, if recent history indicated 300 to 315
sales for dinner on Mondays in pleasant weather,
one could reasonably anticipate that the next
Monday would bring approximately the same
volume of business if good weather were
expected. In this case, it would probably be safe to
predict 315 sales.
 The next step is to forecast the anticipated
number of sales of each item on the
menu. This is simpler to do if the menu is
identical to those that have appeared on
Mondays in the past.
 However, it can also be done for changing
menus if the sales history is set up to
reflect the relative popularity of individual
items as compared with a changing
variety of other items appearing on the
same menu. This type of forecasting is
more difficult, but by no means impossible
 A production sheet is a form on which
one lists the names and quantities of all
menu items that are to be prepared for a
given date.
 Production sheets translate management's
portion sales forecasts into production
targets. Production sheets list menu items
and quantities in terms that the chef and
staff can use in production.
 The production sheet is best viewed as a
tool used by management to control
production and eliminate waste
 Production sheets vary in form and
complexity from one kitchen to another.
 It would be filled out by a manager and
forwarded to the chef as many days in
advance as possible.
 Upon receiving it, the chef would have
valuable information about both total
anticipated volume for a particular meal and
the number of portion sales anticipated for
each item on the menu.
 With this information in hand, a chef is better
equipped to determine needs for perishable
for and for nonperishable foods.
There are two purposes for monitoring quantity
production:
1. To determine whether the sales forecast has
been reasonably accurate in predicting both
the total number of customers and their
individual preferences for particular menu
items
2. To judge how closely the chef has followed
the production standards established on the
production sheet.
 Whenever a portion is returned, an authorized
individual, such as a kitchen supervisor or chef,
records it on the void sheet, indicating the name
of the item, the number of the check on which it
appeared, and the reason for its return. These
entries can be most revealing to an alert manager
or food controller.
 If the number of returns is consistently high and
evenly distributed among job classifications,
investigation may indicate general understaffing.
This finding may suggest a need for additional
personnel to improve customer service.
 There are other important uses of the void sheet as
well, particularly when efforts are being made to
control portions by a certain method such as control
of preportioned entrées.
 If all returned portions must be recorded on the void
sheet and attested to by a member of the
management team, it is more difficult for kitchen
personnel to be careless with food.
 The recording of returned portions makes possible
the reconciliation of kitchen records of portions
produced and records of portions sold
 It is important to note that sales histories, 
regardless of how well they have been 
developed and maintained, are not sufficient 
alone to accurately predict future sales.  
 Your knowledge of potential price changes, 
new competitors, facility renovations, and 
improved selling programs are just a few of 
the many factors that you must consider when 
predicting future sales.  

© John Wiley & Sons, Inc.

2009