A practical session for hospitality operators & managers on what to do after the stocktake: how to run a repeatable investigation process to find (and fix) your margin draining culprits. Let's reduce waste, buy better & get rid of dead inventory. Built from real experience — this is the playbook for turning stocktake data from a mystery into margin wins.
There are items on your shelves where the juice isn't worth the squeeze. Focus your time on high value items, the ones you buy the most of, sell the most of and are most likely to waste. Loaded customers using stock management features report an average 3% reduction in cost of goods.
Split the count into areas such as the bar fridge, chiller and storeroom, with items listed in the order they sit on the shelves. Give each person their own area, have someone on site leading, and if you're counting alone work through each area methodically rather than counting all the vodka and then all the tequila.
Look at the last few months of product sales for your top 10 food and beverage sellers. In most venues that means proteins and some fresh goods on the food side, and keg beer, house wines and well spirits on the bar side. If you use Loaded's live cost of goods, look for top sellers with lower margins.
Items where the opening and closing counts match, nothing was purchased and nothing was sold are trapping cash on your shelves. Run an incentive or move the stock on, and watch rotating wine, keg and spirit lines especially.
The summary at the bottom of the stocktake report shows variance as a percentage of what you used, by category. Take the worst items and compare Loaded's variance with the waste you've actually recorded. If they match, you know why. If Loaded's variance is far higher, that is where to investigate.
Build a custom stocktake template for your high waste and high value items and count it weekly, or daily if you're in beast mode. It is far easier to find where a kilo went yesterday than where five kilos went across a month.
Check inwards goods against what was actually delivered, look for over-ordering that spoils before it sells, check training, portioning and theft, and look for failing equipment. Then fix the system so the root cause is addressed for good.
Send suppliers a simple sheet with your items, pack sizes and estimated monthly volumes, and compare their proposed prices against your current spend. In Sophie's example one supplier saved just under $350 a month, over $4,000 annualised.
Don't count and then throw the numbers into the ether until the next count in 30 days.
Sophie's session grew out of hundreds, maybe thousands, of conversations with operators over the years, and particularly the last six months. Her rough and largely anecdotal split: about half of operators don't stocktake at all because it feels like too much effort for too little reward; around 30% count only to record a closing stock value or send it to their accountant; about 15% count and do some light analysis or keep an eye on the really concerning numbers; and a small final group count, analyse variances and change their behaviour on site every week. The most successful of that last group only do this for their high value items.
If you've attended Rich's Hospitality Profit Matrix session, the four levers will look familiar: the price you pay suppliers for high value items, the variance between actual and expected usage for those items, your sale price, and the promotions or discounts you run. This session focuses on the first two. Pricing and promotions are covered in Tom's session on cost of goods.
Use a product sales report for the last few months to identify your top 10 selling food and beverage items. In Loaded's live cost of goods report, look for top sellers with a lower margin. High value items are the ones you purchase the most of, sell the most of and are most likely to waste, and they should be reviewed as often as you can commit to: purchase price, sale price, promotions, variance and the practices around them.
The stocktake report compares any two completed stocktakes. Opening and closing counts come from the two counts, and received and calculated usage come from invoices processed in Loaded and sales through your POS between those dates. The used column uses your most recent unit cost from invoices, or your forecast price if invoices aren't coming through yet. Variance is the difference between what you physically used and what was sold. Sophie's example: 59 bottles of Heineken at the start, 24 purchased and 8 left means 75 used against 69 sold, so six were wasted, costing just under $14.
If Loaded's variance closely matches the waste you've recorded, there is little point investigating further. If it far exceeds your records, dig deeper. Build a custom stocktake template with just your high waste and high value items and count it weekly or daily, then run the stocktake report on that smaller list.
Communicate findings to your team and suppliers, and change or create a system so the root cause is fixed. When an item's variance is under control, remove it from the list and move on to the next biggest opportunity.
Start with the same list of high value items and put them in a sheet with your estimated monthly purchase quantities, current unit costs and total spend. Send suppliers a version with just the items, pack sizes, estimated quantities and blank unit price and brand fields, along with the key terms you want them to consider. Approach at least three suppliers. Compare the proposed prices against your current spend, and use Loaded's tender module to review the contract regularly and secure credits for prices above the tendered amount.
No. You don't need to perfectly count every item regularly to get a good handle on cost of goods. Make sure the counts you do are fast, accurate and organised, and focus your analysis on your high value items, the ones you buy and sell the most of and are most likely to waste.
Look at a product sales report for the last few months and pick your top 10 selling food and beverage items. In Loaded's live cost of goods report, look for top sellers with a lower margin. For most venues with food trade these are proteins and some fresh goods, and on the bar side keg beer, house wines and well spirits.
There isn't a one-size-fits-all number. A venue that orders pre-portioned, ready to cook product should waste less than one that slow cooks, smokes or butchers from scratch, and waste naturally varies with the seasons. Rather than chasing an arbitrary percentage, know which of your items are the problem items right now and take action on those.
Look for dead inventory first, where opening and closing counts are the same and nothing was purchased or sold. Then use the summary at the bottom of the report to find the categories with the highest variance as a percentage of usage, and compare the worst items against your recorded waste.
Usually one of three things: supply or purchasing issues (such as quantities received not matching the invoice, or over-ordering), team issues (training, portioning or theft) and equipment issues (such as a failing fridge or broken shelving).
Weekly is great, daily if you can manage it. Use a custom stocktake template with just your high waste and high value items so the report is a short list you can act on, and so it's easier to trace what happened yesterday or last week.
Sophie: Hi everyone. If I haven't met you before, my name is Sophie. My background is in operations for a 13 site hospitality group in New Zealand, but I made the switch to Loaded just shy of a decade ago, and I now head up the support and success teams here. You'll also see Kaylene on your screen with me.
Kaylene: Hey everybody.
Sophie: Kaylene is on our onboarding and success team and has a lot of experience implementing tech. She's going to be manning the chat and the Q&A for me today, so please feel free to pepper through any questions, thoughts, feelings, or things that are either working great for you or have been a bit of a miss, so we can keep the discussion going. It's always nice to hear who you are and where you're from, so if you have a minute, pop in the chat where you're dialling in from. Kaylene is also going to pop a link to the slides in the chat, so you can refer back to them or pass them on to other people.
Sophie: Today we're here to chat about ways to make the stocktaking process a profitable exercise for your business. The genesis of this session came from hundreds, maybe thousands, of conversations I've had with our customers and other operators in the industry over the past few years, but in particular the last six months. This is largely anecdotal, so take it with a grain of salt, but about half the operators I speak to don't currently do any form of stocktaking. I think the practice just feels overwhelming, like way too much effort for too little reward. Then there's a good chunk, about 30%, who invest time in counting stock but only to journal a closing stock value or send it to their accountants. About 15% count and invest some time in light analysis or keeping an eye on any massively concerning numbers. And the last little cohort are counting, analysing variances, and changing their behaviours, purchasing and other things on site every day and week as a result. The most successful of that small sliver are only doing that for their high value items, and they're not worrying about investing time in stock that's going to have little return.
Sophie: If you've attended Rich's Hospitality Profit Matrix session in the past, this slide will look familiar. Rich highlighted the four cost of goods levers that provided the most profitability gains for him as an operator. Points one and two are what we're focusing on today: the price you're paying suppliers for your high value items, and the variance between your actual usage for those items and the expected usage from your quantity sold through the POS. Three and four, your sale price and any promotions or discounts you're running, are also really important, and Tom from our team has a session scheduled later this month that focuses more on those, so keep an eye on the Academy for that.
Sophie: When a stocktaking system is implemented well, you spend less time counting stock, and that count is accurate, which lets you focus your time on the high value items that have the biggest impact on your margin. On average, our customers using stock management features in Loaded have reported a 3% reduction in cost of goods, so that and more is what you're aiming for.
Sophie: The count itself needs to be organised both ahead of time and on the day. Where possible, I'd split the count into areas. For example: my bar fridge, my chiller, fridge one and two, and that weird little hallway where we sometimes store stock. If I'm super organised, each area has its items in the order they live on the shelves. That's probably not the reality, but at the very least it has all the items that tend to live in those areas.
Sophie: If I have other team members helping with the count, I'd give each person a separate area to go away and count. I'm going to make sure that I, or somebody, is on site leading so that if anybody has questions, or it's their first count, or they're not 100% sure what something is, they have someone to turn to. If I'm on my own, I'm going to move through the areas really methodically rather than trying to count all the vodka on site and then all the tequila. That way you're much less likely to miscount things.
Sophie: Most operators either aren't stocktaking or they complete a count but don't take it any further. I'm not suggesting any of the following advice should be applied across your entire stock list. There are genuinely items on your shelves where the juice just isn't worth the squeeze. We want you to focus on your high value items. So how do you know what they are? Look at an individual product sales report for the last few months to see what your top 10 selling food and beverage items have been. If you're already using Loaded's live cost of goods module, you'll be looking not only at the top sellers but at the top sellers that have a lower margin. If you're not yet using that, or you only have POS reports to rely on, select your top selling dishes, food and beverage items from the POS report instead.
Sophie: If you're a restaurant, cafe or bar with decent food trade, the high value items in your top sellers will mostly be protein, maybe some fresh goods. In this example, with a cheeseburger, chicken burger, fried chicken, steak and fries, and lamb shoulder, I'm looking at my beef patties, chicken, steak and lamb. On the beverage side, bars and restaurants are mostly looking at keg beer, house wines, well spirits, that kind of thing.
Sophie: Those are the items we call high value: the ones you purchase the most of, sell the most of, and are most likely to incur waste on. They should be reviewed as frequently as you can commit to. By reviewing, I mean assessing your pricing, both what you're purchasing it for and what you're selling it for, any promotions you're running on it, your variance across a period, and any practices around those items.
Sophie: These two screenshots are pulled from our live cost of goods products report, which is a really good one to pay attention to. But the most data on variance, and on what's actually happening to the stock item itself rather than just what the dish is selling for, is going to be your stocktake report. This report is a comparison between any two completed stocktakes. In my example, it's from June 30th to July 28th, so just under a month. The opening count comes from the count on the 30th and the closing count from the count on the 28th. Received and calculated usage is anything purchased and received using our invoice processing, or sold through your POS, between those two time frames. Anything marked as received or processed outside of those time frames doesn't get included in this report.
Sophie: The used column, in both units and dollar value, is calculated from what you had, what you received, what you left with, and your most recent unit cost for each item from those invoices. If you haven't got your invoices coming in yet, it'll use your manually set price in Loaded, called the forecast price, instead. Variance is the difference between what you've physically used and what's been sold through the POS, again in both units and dollar value. Using Heineken as a nice tidy example: we had 59 bottles at the start of the month, purchased 24, and have eight left, which means we've physically used 75 bottles. We've only sold 69, so six have been wasted, and at the current bottle cost that cost us just under $14.
Sophie: This report provides a ton of insight, so much that it can be overwhelming. I'd spend a good 15 to 20 minutes after a big stocktake highlighting the items I want to take action against. The first thing I'd look for, and the easiest to spot, is dead inventory: items we're holding that aren't moving and are trapping cash. These are stark examples, and yours might be more subtle, but for all of these highlighted in red, my opening and closing counts are the same, I haven't purchased any and I haven't sold any. They're just taking up room on the shelf. Maybe I want to run some incentive schemes or shift that stock elsewhere to get it off my hands. You're especially at risk if you run monthly or weekly rotating wine, keg or spirits. The more regularly you watch for it, the less likely it is to build up like it has here.
Sophie: Once you've taken action on that, look for the items with the most concerning variance. Rather than going line by line, I scroll right down to the bottom of the stocktake report and look at the summary first, because it gives me a nice overview. It tells you your variance, or waste, as a percentage of the amount you used across the period. Here, both red and white wine have a bit of a problem for this venue: about 15% of the amount used just went down the drain, and we received no revenue for it. In total dollar value, those two categories make up almost 40% of the total waste for this site. So I scroll up to those categories to find the culprits.
Sophie: In the whites, alongside my dead stock, I've got two problem children: the Craggy Range Sauvignon Blanc and the Mud House Sauvignon Blanc. On the Craggy Range, we physically used just over 13 bottles but only sold about five and a half, which means almost eight bottles have gone missing somewhere, and that cost us 150 bucks. On the Mud House, we physically used over 40 bottles but sold just under 35, so five and a half bottles have gone missing, costing $70. Addressing variance on these two items alone gets us two and a half grand back in our pocket across the year, which is not insignificant. Those are two items I'd carry forward into the next phase of my investigation.
Sophie: The next phase is to compare the variance or waste amount in your Loaded report to any waste records you keep on hand. You've probably got some kind of hard copy or other software where you input known waste figures each day. If your Loaded variance closely matches your recorded wastage, there's very little point taking the investigation any further. You know why it happened. Maybe somebody walked into the chiller and knocked eight bottles of Sav straight off the shelf, and it was all recorded. Bad day for that person, but not an ongoing issue, and you've probably already addressed what caused it. But if the variance in Loaded far exceeds what's in your records, it's a really good indication that you need to dig deeper to find the root cause.
Sophie: You'll end up with a list of high waste items, cross-referenced against your waste records, where you don't yet have an explanation for the variance. Those are the items you want to investigate. To do that, I use a custom stocktake template to count just these items more frequently. Weekly is great; daily if you're in beast mode. Alongside those high waste items I'll add some high value items too, if they aren't one and the same, but mostly they are: the items you order, prep and sell the most of are the most likely to incur waste.
Sophie: Now that I'm counting those more regularly, I generate the stocktake report on that more regular cadence for that smaller list of items, so I don't have a big overwhelming list of hundreds of items to comb through. I'm just dealing with a nice tidy list of four items. In this example, across about 24 hours, over a kilo of our bavette has been wasted. It is far easier for me as a manager or operator to ask the team, review camera footage, or trace back orders and suppliers to find where that kilo went yesterday or last week than to find where the five kilos that disappeared across the month happened. The more regularly you can do it, the more insight you'll get.
Sophie: We had a quick question come in from Emily: what would be a standard percentage of wastage across a month, and where does it cross the line from being concerning to business as usual? It's a really good question, Emily, thank you. Unfortunately I don't have a perfect number for you. It's all relative. A QSR that orders everything pre-portioned, ready to cook and serve should in theory have far less wastage than a venue that slow cooks, braises, smokes or pulls its own product from scratch, so there's really no one-size-fits-all. Even then, I'd expect your waste to fluctuate seasonally as fresh goods and proteins vary in size, fat content and quality between summer and winter.
Sophie: I typically encourage people I work closely with away from an arbitrary threshold. The power in waste management comes from knowing exactly, right now, which of your items are your problem items and taking action on those currently, not just knowing where they are. That naturally results in better waste, rather than just saying 'hit 10%', which is arbitrary and hard to track against in the here and now. It's easier to manage these things in isolation, and it's far more meaningful for your team to look at what's happening to a specific item than to aim for an overall percentage. Emily, if you have a stocktake report and you're not sure which items would give the best return on variance management, feel free to reach out to Kaylene or me and we can tee up a time to look through the report together.
Sophie: Now that you have a more granular idea of when and where the variance is happening, you may come to this with a hunch: surely it's disappearing on a Friday or Saturday when the kitchen is hectic, or on the day we portion or butcher. Without the data to back it up, you're stabbing in the dark. So pay attention to what happened on site on the day the variance cropped up. There are lots of reasons for stock variance, but usually about three overarching sources.
Sophie: The first is supply or purchasing issues. You'll likely see variance on days that stock is received, where the quantity entered in Loaded doesn't reflect what was physically supplied. For example, the invoice says one kilo of bavette, so that's what we enter, but we only actually received 900 grams. Ask yourself: do we have a known and followed process for ticking off inwards goods, weighing what was received and comparing it against the supplier invoice? Do our staff know how and when to contact suppliers if there's an issue with quality or pricing? You may also see high variance by use but low calculated use, which is a good indicator you're over-purchasing and stock is spoiling before you can shift it. In that case, are you reducing order frequency as much as possible, maybe one larger order at the start of the week with smaller top-ups as needed? Are you leveraging AI-powered predictive ordering and minimum stockholding values to only order what you think you need based on what you're budgeting to bring in?
Sophie: Another source is the team itself: training issues, or variances during large prep days or certain staff members' shifts. Maybe they haven't been taught how to portion properly, pour beer correctly or prep certain dishes. You could be under-portioning more generally, or over-portioning: your recipe is costed at 100 g of chips but 130 g looks better on the plate, so that's what goes out, and over time 30 g per dish stacks up and up. And of course there's theft. It's not pretty and doesn't need much explanation, but it's easily identified following the same steps. If this is happening, ask whether all of your team are properly trained, whether that training is documented, whether you run regular refreshers as things drift and slip, and whether the team can easily access plated recipes during shifts, not only the kitchen but the team on the pass, checking each dish against the photo before it goes to the table. Do you need to consider disciplinary action?
Sophie: Lastly, your equipment. You'll see variance corresponding with the use of certain pieces of kit. Your service fridge might be on the fritz, or you might have shelving that breaks and eight bottles of Craggy Range go down the drain. Do you have a clear way for staff to inform managers or owners when equipment is failing or repairs are needed, and do they understand the importance of doing that?
Sophie: Whatever findings come out of the investigation need to be communicated back to your team, your suppliers, whoever it's relevant to, and a system or set of actions needs to be created, or changed if you have one that isn't working, so the root cause is addressed once and for all. Maybe that's more detailed training docs, always handy on site, signed and dated when complete, with refreshers for things like pouring beer. Maybe it's a procedure and checklist for your team to complete when stock is delivered. When that's successful, you'll see variance disappear and overall profitability increase. The items you've successfully fixed, you just remove from the list, and you tackle the next one with the greatest opportunity.
Sophie: The last big lever to help win back margin on your high value items is tendered procurement. I'm not going to dive too deep today, and in all honesty it should and likely will be its own session in future. But every venue, big and small, can approach suppliers for contract pricing. Start with the same list of your high value items and put them in a sheet like this, with your estimated monthly purchasing amounts. Use an average of the last few months, which is easy to access if your invoicing runs through Loaded, or if your trade is seasonal, use what you purchased at a similar time last year. This incentivises the supplier to give you a better price. For your own reference, add your current unit costs and total spend, amount times unit cost, which makes it easy to compare savings when suppliers come back with an offer.
Sophie: What I actually send my suppliers is this sheet: just the items I want, the typical pack size, and my estimated monthly purchasing amounts, with blank unit price and brand fields for them to return. I've also added some key terms I might want them to consider as part of the contract. Ideally approach at least three suppliers. I've only got two here, so naughty me. Carol's Butcher has come back saying the bacon's going to be the bee's knees, with chicken breast and beef as is. Comparing the total cost of goods at her proposed prices against my current pricing sheet gives me a monthly saving of just under $350, so over four grand annualised. John's Meats would only get me about $2.1k across a year, but maybe the brand John's supplying, or his willingness to meet the key terms, makes him the better option. Either way you're saving a chunk of change, but personally I'd probably go with Carol's, if you're not opposed to the bee's knees bacon.
Sophie: This process secures discounted pricing for your high value items. You can re-run reviews against that contract in Loaded's tender module as a quick administrative task every week or month, to make sure any credits for prices above your tendered amount are being secured quickly. That means you don't have to scour every invoice to check pricing against your contract, saving you time, and with locked-in contract pricing you won't sink hours and cost into shopping around the wider market each time you place an order.
Sophie: I've thrown heaps of information at you, so let me summarise. You do not need to perfectly count every single item in your stock list regularly to have a good handle on your cost of goods. The most important pieces are ensuring the counts you do are fast, accurate and organised. Your team should know right now what your highest value food and beverage items are, as well as your problem items. The amount and frequency with which you order should be data driven, not feel driven, where possible. You should secure discounted pricing across long periods. And lastly, my most important one: take at least one action from every stocktake you complete. Try not to just count and then throw it into the ether and not look at it again until you do another count in 30 days' time.
Sophie: Taking any questions as they come in? We've had some really great feedback, including from someone who said they stocktake every month and analyse, but picked up some great approaches from watching this and having a bit of new perspective. Very well done to you. Thank you so much for joining us. I know asking questions in a format like this can be a bit odd, so if you'd prefer to ask privately, or just want to touch base and get a bit of a 'what should we look at next', feel free to flick us an email. You can reach support at supportloadedhub.com, which would probably get you the fastest response, or Kaylene or me directly. Either way we'll get back to you and can arrange a time to touch base.
Sophie: I really do hope you've taken something away from this and that you're excited to implement it in the coming weeks. I know stock management isn't the sexiest of jobs in the hospitality world, but there are massive margin wins to be made in this space. Keep an eye on Loaded and on our Academy page for our next upcoming sessions. This time next week we'll be running a session with James O'Connell from The Hospitality Company, who's going to take us through how to build a management incentive scheme, which ties in really nicely with this, believe it or not. Creating incentives for your management team around managing stock, variance reduction and cost of goods can be really powerful. We hope to see you all there. Have a great day, and thank you again for joining us.
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