1. Chapter 12 Controlling Food Sales
Principles of Food, Beverage, and Labour Cost Controls,
Second Canadian Edition

2. Learning Objectives
12.1 List and explain the three goals of sales control.
12.2 List and describe eight determinants of customer restaurant selection.
12.3 Describe the two principal means of maximizing profits.
12.4 Explain the three most common methods of establishing menu prices.
12.5 Describe the two principal means of selling products effectively in a restaurant.
12.6 List and explain the five most important elements of menu preparation.
12.7 Explain management’s attempts to maximize profits by establishing proper sales techniques.
12.8 Describe how technology has affected sales techniques.
12.9 Explain the importance of revenue control.
12.10 List and explain the three standards established to achieve the goals of revenue control.
12.11 List and describe the standard procedures for controlling revenue.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

3. Introduction
Control was defined as “a process used by managers to direct, regulate, and restrain the actions of people so that the established goals of an enterprise may be achieved.”
Revenue control is only one important goal of sales control.
An important maxim for any business is that “without sales it is impossible to control costs.”
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

4. Sales Control
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition
Discuss Sales Control concept: how to control revenue collection, optimizing the number of sales, and maximize profit through pricing and selling products

5. Goals of Sales Control Optimize number of customers Maximizing profit
attract a sufficient number of customers
Maximizing profit
obtain the maximum gross profit from customers
Controlling revenue
all of the revenue resulting from sales is realized
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

6. Optimizing the Number of Customers
Location
Menu item differentiation
Price acceptability and value
Décor and lighting
Portion sizes
Product quality
Service standards
Menu diversity
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

7. Location
Other things being equal, customers will choose the most conveniently located restaurant.
The greater the distance from a population centre, the fewer the customers a restaurant can expect to attract from that centre.
Having a good location is usually necessary for volume business.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

8. Menu Item Differentiation
Homogenous products or services are so similar to another, customers have no preference, choosing whichever costs less.
Differentiated goods and services are sufficiently different that customers develop preferences.
Unique menu items are called signature items.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

9. Price Acceptability & Value
If restaurants are alike in every way except menu prices, the one with the lowest prices will have the greatest sales volume.
The more homogeneous an item, the more price sensitive it is.
If menu items are price sensitive, a relationship exists between sales price and sales volume.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

10. Décor & Lighting Décor differentiates one restaurant from another.
Décor that appeals to a large segment of the targeted market should be selected.
Evaluate the decors of local restaurants.
Professional help is recommended.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

11. Portion Sizes & Product Quality
Portion sizes must be appropriate to a restaurant’s clientele.
Large portions do not always attract the greatest number of customers.
Various customer segments demand food products of various levels of quality.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

12. Service Standards
Customers select restaurants offering a type and level of service that they find appropriate to the occasion.
Managers must be able to adjust some aspects of service in order to increase customer satisfaction.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

13. Menu Diversity
Most restaurants find it necessary to have a broad range of menu items.
The number and range of menu items are governed by:
cost considerations
available equipment
the culinary abilities of the kitchen staff
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

14. Maximizing Profit 2 principal means to maximize profits:
Pricing Products Properly
Matching competitors’ prices
Calculating prices from costs and cost percents
Adding desired contribution margins to portion costs
Selling Products Effectively
The menu
The sales techniques used by the staff
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

15. Pricing Products Properly
Cost is usually the most significant factor in establishing sales prices.
Restaurants with differentiated products have more flexibility to change menu prices than those with homogenous products.
The proper sales price for an item is that which will produce an acceptable number of sales.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

16. Setting Menu Prices Matching competitors’ prices
Common by those with no idea of cost
Calculating prices from costs and cost percents
Create the price by using a fixed food cost %
Use portion cost and forecast sales volume
Adding contribution margins to portion costs
Often used and equitable
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

17. The Importance of the Menu
The menu is the primary sales tool.
The five most important elements of menu preparation are:
Layout and design
Variety
Item arrangement and location
Descriptive language
Kitchen personnel and equipment
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

18. Sales Techniques
Managers hold daily meetings with servers before opening time and benefit:
Management
Customers
Servers
Training servers:
Suggestive selling
Suggest specific menu items
Empower = Total Quality Management
Technology
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

19. Controlling Revenue
There are three standards for achieving the goal of revenue control:
Documenting all sales
Pricing all sales correctly
Verifying that all sales are recorded and deposited
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

20. Documenting Food Sales – Manual
Using guest cheques:
Helps servers remember orders
Provides a written order for the kitchen
Gives itemized bills to guests
Maintains records for sales history
Proves accuracy of cashiers’ work
Verifies the accuracy of prices charged
Records for tax purposes
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

21. Using Numbered Cheques
Using cheques numbered sequentially
Signature book for control
Dupes for follow-up
Concerns with using hand-written guest cheques
Legibility
Accuracy
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

22. Pricing All Sales Correctly
Control is required to ensure:
correct menu selection
accuracy of prices
accuracy of arithmetic
accurate subtotal of menu prices
tax calculated as a percentage of subtotal
grand total for the cheque
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

23. Recording Revenue Restaurant sales control sheet Using a register
Breaking down sales into categories
Errors
Labour
Consider benefits of electronic
Touch screens, PDA
Accurate
Monitor
Reports
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

24. Key Terms Control sheet, p. 325 Revenue control, p. 300
Data mining, p. 319
Sales control, p. 300
Differentiated product, p. 303
Signature book, p. 322
Dupe system, p. 324
Signature item, p. 304
Guest cheque, p. 322
Total Quality Management, p. 318
Homogeneous product, p. 303
Truth in advertising, p. 316
Price sensitive, p. 304
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition

25. Copyright
Copyright © 2014 John Wiley & Sons Canada, Ltd. All rights reserved. Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.
Principles of Food, Beverage, and Labour Cost Controls, Second Canadian Edition