Restaurants

Columnist Richard D. McHugh is president of Skier Feeding Inc., a food-service consulting firm specializing in ski area feeding. He is the hotel and resort management department head of the Washington County Vocational Technical School in Calais, Me., and was general manager of food and beverage concessions at Mt. Snow, Vt., for A.B.C. Consolidated, a subsidiary of Ogden Foods. He is a graduate of the Hotel and Restaurant Management School at the University of Massachusetts.

Labor: or where the time goes

To effectively combat rising labor costs (the current $1.60 minimum wage is scheduled to jump to $2 in early ’72), area operators will have to do some astute planning to improve the productivity of their labor. And there is definitely room for improvement. According to Cooking for Profit magazine, food service employees have a productivity rate of 45 per cent, with the remaining 55 per cent of payroll time lost to waiting, walking and idling.

Many area operators do not realize how much of their labor time is wasted because they have never tried to measure the productivity of their food operation. They know what their labor costs are in terms of percentage of sales, but this is not sufficient. They should also know how much labor costs at peak demand periods and during midweek. There is also considerable variation in labor cost on a per-hour basis and this cannot be determined by the gross aggregate labor cost figures most operators rely on. Table I illustrates labor cost percentage variation at different levels, while Table II shows labor cost variations on an hour-to-hour basis.

Because of the fluctuations in customer traffic, it isn’t an easy job to analyze cafeteria productivity. But if costs are to be kept under control, area operators must be prepared to do more analytical work, especially since they have such a short operating season during which to make a profit.

There are several other ways to measure productivity, in addition to looking at labor as a percentage of sales.

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One method is to examine sales per employee. Eating and drinking establishments average only $10,000 per employee per year, based on all direct labor, but these comparisons have limited value on an annual basis for ski areas because of the variations in the length of the season. A better comparison is sales per employee hour, determined by dividing gross cafeteria revenue, after sales tax, by the number of employees (adjusted for part-time labor), divided by the average number of employee hours. For commercial cafeterias, according to Institutions magazine, the range in sales per employee hours is $4.68-6.25, but ski area cafeterias, which have no direct competition in their market area, should realize a somewhat higher figure.

Another, and perhaps easier, way to measure productivity is sales per employee-day, once again using all labor costs involved directly in the production and service of food. George L. Wenzel, author and consultant in the restaurant industry, claims a modified cafeteria should generate $60/employee/day. For a monopoly operation like a ski area cafeteria, which is open only 100 or less days a year, the figure would have to increase to $180/employee/day.

The biggest problem with using sales as a productivity yardstick is that price changes and dollar value must be adjusted when comparing productivity data from year to year, because these variations are not always traceable to employee activity. This has led many sectors of the food service industry to use the number of meals sold per employee per day as a measure of productivity (Table III).

Once an area operator is in a position to measure his food service productivity, he can make meaningful decisions on capital and labor inputs; rearrangement of equipment and service areas; application of work simplification methods and products; optimal employee scheduling and the amount of time allocated to employee training.