Stock Management for Hospitality

Stock Management for Hospitality

Stock Management for Hospitality

By Richard McLeod, Loaded

Without the right ingredients, at the right time, in the right place, the hospitality industry simply can not operate. Stock management, otherwise known as inventory management, is an integral part of ensuring we can plate or serve up exactly what is needed at exactly the time our customers want it.

Stock Management for Hospitality

What is Stock Management?

Stock management is the end to end process of managing the menu items you are planning to sell. Key elements of this process include, costing your menu, demand forecasting, managing and monitoring your supply chain, and tracking inventory levels within your business.

Good stock management practices are vital for businesses in the hospitality sector. It ensures you can keep your costs under control by having control of the entire stock management system, from having the right inventory levels, to reducing food wastage to making sure you are paying the best price for quality products. It all affects the overall health of your bar, pub, restaurant or cafe.

Inventory management software can help streamline processes, track inventory coming in and out of your business and give you visibility over how much stock you have on hand. This clear visibility is especially important if you are managing multiple hospitality sites.

What are the Benefits of Effective Stock and Inventory Management?

It might not be glamorous, but without effective inventory management, your site will be like a ship without a rudder. You may have the best-tasting food and the greatest vibes for miles around, but to sustain your business with solid, profitable results, you need to have complete control over your stock from the moment you order it right through until the customer pays for it.

With decades of experience in the hospitality industry, we can help you get there faster:

Stop the Guesswork and Start Sales Forecasting to Support Growth

Stock reports are integral to efficient operations of a hospitality business.  By combining your usual stock usage with your forecast upcoming sales, you can remove the guesswork of estimating what stock you need to order. It turns out it’s actually pretty simple to forecast future stock levels to ensure you order appropriate quantities of stock to fulfil customers' orders. By connecting your POS system, and integrating your sales with your inventory data, you can gain insights into your best sellers and plan menus based on what menu items are flying out the door and what sold well this time last year.


Higher Profitability with Greater Insights into Food Costs

By ensuring your inventory tracking is accurate and your cost of goods is up to date, you can build recipe and menu costs using inventory management software to measure your gross profit for each and every menu item.

If an ingredient fluctuates in price, you can react quickly to replace that item or negotiate with suppliers more effectively, as you have real time reporting to track any cost increases.

Reduce Food Wastage Through Stocktaking

Food waste can quite easily occur if your team is not held accountable for producing the recipes and meals as they were designed to be made. Let’s be honest, sometimes in a busy service there is also plenty of human error occurring. Stocktaking provides accountability, by showing you how much of each stock item you have actually used versus what you expected to use.

Ensuring your stock control processes are completed the same way every day and tracking your stock properly and accurately will mean your business builds a culture of delivering consistent high performing results.

Real-Time Inventory Tracking to Aid Better Customer Experience

With supply chain pressures being as they are, and costs bouncing around all over the show, it  is inevitable that you will also be seeing your Cost of Goods (COGS) or margins also jumping around.  It’s really important you can monitor this in real time so you and the team can make decisions around whether you need to swap out ingredients, negotiate with a new supplier or even look to pull an item from your menu. Clear visibility can help you mitigate some of the negative margin effects you are seeing in your business.

Work Smarter, Not Harder

If you think implementing an effective inventory management system in your business is too time-consuming, that's where we can help out.

Loaded is designed by experts in the hospitality industry to help support your business. We make it easy and simple to manage your stock from start to finish.

We believe so strongly in the success of the Loaded platform for your business that we give you 14 days to try it for free.

Why is Inventory Management Software Important for the Hospitality Industry?

The hospitality industry is a fast-paced, exciting place to make your career. Keeping organised and keeping in control of your cost of goods and inventory is one of the most important aspects of keeping a bar, pub, restaurant or cafe afloat and thriving. Inventory management software can drive your key internal processes and streamline your operations.

Loaded works with businesses at every end of the scale from small independent cafes and restaurants to owners with multiple large venue sites to support operational excellence.


Franchisees that have a group wide stock management system enjoy higher levels of profitability across their franchise network and a reduction in franchisee failure.

This is achieved by

  • Being able to analyse stock purchasing right across your network and ensure franchisees are being charged correct prices from your contract suppliers.
  • If stock input costs differ in different regions, then you are able to see the effect this is having on an individual franchisee and adjust sale prices accordingly.
  • A high performing franchisee will often produce the highest gross profit margins. With high visibility of their inventory management process you can use their success to coach other franchisees on where to improve.


The benefit to a restaurant in managing their stock, recipes and menus through an inventory management system is that they know their expected margins before they start selling a menu item and can then analyse the actual margin they received.

This is achieved by

  • Building out the stock items you will purchase and the recipe you will use when you are creating a new menu.
  • Ordering and receiving everything via the inventory management system means your prices are constantly updated, and so are your recipes and expected margins.
  • Stocktaking allows you to see where you are using more of a stock item than you expected to. (Which negatively affects your Food Gross Profit).
  • Reporting that shows your food discounting will show you the actual margins you are achieving after any discounting and you can make a business decision on whether the discounting should continue.


When a bar introduces Stock Management they can make very quick gains and increases in Gross Profit. This is because 10% of a bar's product normally makes up 90% of their beverage sales and focus can be put onto these items to drastically reduce any wastage.

This is most commonly achieved by

  • Tracking exactly how much tap beer is being poured vs what you are expecting to be poured based on your glass size and the number of sales you are making.
  • Being able to identify when house wines and spirits are being over poured
  • Clearly identifying all of the beverage ingredients going into high volume cocktails, so you have transparency on whether anyone in your team is over pouring.

What Can Go Wrong Without Effective Stock Management?

Stop and think about it, are you really going to just leave managing the largest expense in your business to chance? Without effective inventory management, you can not focus on creating a successful business environment and culture which will mean you can grow your business.

Order management, inventory tracking, stock control, and demand forecasting are all incredibly important in supporting the growth of your business. Without them, you can not have complete control of the cost of goods sold and the profits your business provides you.

Your costs can easily end up outweighing your profits without the right inventory management processes in place.

What are the Key Areas that Will Help to Control My Inventory?

There are four key areas of stock control that your inventory management software should help you track

1. Sitting inventory

Also known as stock on hand this is the quantity of goods you have sitting on your site at a point in time. Ensure you stick to the same type of measurements (kgs, grams etc) you log your inventory across your site(s) so you can stay consistent.

2. Depletion

Your depletion is calculated by the quantity of the ingredient used times by the number of times it has been sold. The depletion process needs to be automated to ensure your sitting inventory is always up to date.

3. Future Usage

Future Usage is your inventory forecast, it is the rate of which your current inventory will last. Calculating this rate will allow you to ensure you don't over-order or run out of stock over a key period like a weekend.

4. Variance

This is the difference between how much stock you expect to use versus how much you actually used. By understanding this, you can reduce food waste and streamline your costs.  


How to Pick the Right Stock Management System for Your Business

The Stock Management System you choose for your business must be the right fit for your business and your ambitions. For example, if you own a 300-site franchise business specialising in fast food, you'll need a very different system from a single fine dining restaurant. When you assess any stock management software website or meet with their team, be sure to answer these questions?

  • Do they currently work with other businesses like yours?
  • Will your team find it intuitive and easy to use?
  • Are the support and training levels going to match what you need?
  • Can you implement a step-by-step rollout of the stock control features and receive more value the more you implement?
  • Can they clearly tell you where your cost of goods savings will come from using their system?
  • Does it integrate with your point of sale and accounting software?
  • Can you see how their system will be able to grow with you as your business grows?
  • Are they going to be around in five years' time?

Stock Management for Hospitality

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