10 Ways Restaurants Can Cut Costs Without Sacrificing on Experience

Hengam Stanfield’s story is proof that you can make serious money in the restaurant industry without compromising on quality – and she has the numbers to back it up.

“We launched our first location in 2014 and had gross sales of $500,000 per year, which unfortunately was a few hundred thousand dollars below break-even,” says Stanfield, who is co-owner (with her husband Matt) of Mattenga’s Pizzeria – an eatery that now has six locations in and around San Antonio, Texas. “Currently we have $5 million in gross sales and we are profitable, investing money back in our business. We started 2022 with 45 staff and increased it to 100 just last year.”

The couple are now so successful that they’re the co-hosts of the Making Dough Show, a podcast and YouTube channel dedicated to helping restauranteurs grow their sales. Here, Stanfield, along with other restaurant veterans, share their best tips for cutting costs while keeping the customer experience high.

1. Create a portion control standard.

Stanfield recommends looking at the five items on your menu that cost the most. For Mattenga’s Pizzeria, these include meat and cheese. From there, make a standard portion size for each of those items – something your staff can follow. Then, communicate and enforce those standards.

“We need to be meticulous on portions because an extra ounce of cheese here and there adds up to a lot when we are making two thousand pizzas a week,” she says. “Put a chart or image or numbers on the wall of the kitchen – just create your own poster, it can even be in a Google Doc – and train your staff on the standards and expectations.”

2. Ask customers before dishing out condiments and cutlery.

Consider having refillable options for condiments instead of pouring each customer individual portions, suggests Paul Kushner, a longtime restaurant owner in Pennsylvania and CEO of MyBartender, an online bartending resource.

“And for takeout, ask if the customer needs cutlery or napkins instead of tossing in a handful of each,” he says.

3. Opt for a small menu.

During the pandemic, many restaurants fought to survive by reducing the number of items on their menus. Rick Camac, executive director of industry relations (and longtime restaurant owner) at the New York City-based Institute of Culinary Education, is seeing eateries stick with this strategy and benefit financially.

“We’ve all learned that we don’t need 25 items on a menu,” he says. “The old school menu style was to have 10 starters, 10 entrees, and five desserts. Today’s restaurants on the leading edge are sticking with 12 to 16 items, tops.”

He explains that the monetary upside to focusing on top selling items (and sometimes changing them out seasonally) is enormous.

“If you start off your week knowing you need $5,000 to fulfill all of your menu items and then end the week realizing you sold $10,000, you are stuck with a 50% cost,” he says. “But if you narrow your menu, you might then only need $3,000 for every menu item and there is a better chance you may do $10,000 in sales anyway, but now you are looking at a better margin.”

4. Reconsider offering food comps.

“Rein in complimentary dishes as a guest recovery tactic,” Kushner advises. “I know a lot of managers and servers who just want to avoid conflict will default to offering a free dessert or appetizer instead of hearing out the customer’s concerns.”

Instead, he recommends paying attention to concerns and considering reviewing policies to meet frequent customer complaints.

5. Engineer your menu.

Not sure how to determine which menu item is a cash cow and which is a cash burner? Camac recommends an exercise in menu engineering.

Tap into your purchase order system and get your product mix report. This will spell out what you sold and what you purchased it for.

“For example, you may have purchased fries for $1 and sold them for $4,” Camac says. “It shows everything on your menu and what you have left over after sales to pay your bills.”

Then draw out a four-part quadrant on a piece of paper. In one square write down your ‘stars,’ the items that are high profit and high sales.

“In another you will have your ‘work horses,’ which are those items that don’t give you as much profit, but you make a ton of them,” he says.

In the third square write down your ‘dogs,’ which are low sales and low profit (you’ll want to take those off your menu).

And in the fourth square write down your ‘puzzles,’ those items that are high profit but you don’t sell very many of them.

“You can move things from one quadrant to another,” he says. “Think about how to engineering items – you could lower an item by $1 to sell more of them, for example. It can make a huge difference on your bottom line.”

6. Describe your menu items better.

In addition to menu engineering, Camac recommends flowering-up the way you write and talk about your items.

Get creative. Think of how you can serve what you’re already serving, but differently.

—Hengam Stanfield, co-owner, Mattenga's Pizzeria

“You can make a 26-27% increase in sales just by describing your menu items better,” he says.

7. Optimize staff scheduling.

Baruch Silvermann is CEO of The Smart Investor, a site that helps people make better financial decisions, and he says restauranteurs are smart to closely monitor customer traffic patterns and book staff accordingly.

“Try utilizing a flexible shift system,” he recommends. “This involves categorizing employees into different roles and having them rotate between front-of-the-house and back-of-the-house tasks based on customer demand. For instance, servers can assist with food preparation and cleaning duties, minimizing the need for additional kitchen staff.”

8. Utilize technology.

Stanfield and her husband are looking at ways to use software solutions to cut labor costs without impacting the guest experience. One way is to use online ordering and restaurant apps.

“We will often ask ourselves, ‘How do we do more with less people?’” says Stanfield. “If we do online ordering, we can allocate team members to do something else.

“Interestingly, we’ve tracked our average ticket sales and online orders are always higher than in-person or phone orders. That is one of the reasons you see bigger companies invest heavily in technology. Apps can suggest add-ons and people are usually hungry when they are ordering online, so they are more likely to add items.”

9. Negotiate on packaging.

Stanfield says she has reduced costs on packaging (to-go boxes, pizza boxes) by 3-5% by buying in bulk and negotiating with packaging vendors.

“Our restaurants spend $100,000 per year on pizza boxes alone,” she says. “You can get pizza boxes that are unbranded, which doesn’t impact the quality of the food, but it does impact us financially. I recommend working with different vendors when it comes to packaging and finding ways to reduce your costs.”

10. Make your offerings fun for customers.

Get creative with your revenue streams. Mattenga’s Pizzeria started adding pizza kits to the menu for people who wanted to take home pizza ingredients and make them on their own.

“It helps people create a great family night or even a romantic date,” Stanfield says. “Get creative. Think of how you can serve what you’re already serving, but differently.”