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, from having the right inventory levels, to reducing food wastage to making sure you are paying the best price for quality products.

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?

Without effective inventory management, your site will be like a ship without a rudder. To sustain your business with solid, profitable results, you need complete control over your stock from the moment you order it right through until the customer pays for it.

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. 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 is 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.

For the full framework on buying at better prices: How to Get Better Prices from Your Food Suppliers.

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. Stocktaking provides accountability, by showing you how much of each stock item you have actually used versus what you expected to use. For the full process: How to Reduce Food Waste in Your Restaurant or Bar.

Real-Time Inventory Tracking

With supply chain pressures and costs bouncing around, it is important you can monitor your Cost of Goods (COGS) 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 pull an item from your menu.

Work Smarter, Not Harder

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.

Book a free 30-minute demo to see how we can help.

Why is Inventory Management Software Important for the Hospitality Industry?

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

Franchises

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 analysing stock purchasing right across the network, ensuring franchisees are being charged correct prices from contract suppliers, and using your highest-performing franchisee’s results to coach others.

Restaurants

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.

Bars

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.

What Can Go Wrong Without Effective Stock Management?

Without effective inventory management, you cannot focus on creating a successful business environment and culture. Order management, inventory tracking, stock control, and demand forecasting are all incredibly important in supporting the growth of your business. Your costs can easily end up outweighing your profits without the right inventory management processes in place.

The Four Key Areas of Stock Control

1. Sitting inventory

Also known as stock on hand — the quantity of goods you have sitting on your site at a point in time.

2. Depletion

Your depletion is calculated by the quantity of the ingredient used times by the number of times it has been sold.

3. Future Usage

Future Usage is your inventory forecast — the rate at which your current inventory will last, allowing you to ensure you don’t over-order or run out of stock over a key period like a weekend.

4. Variance

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

The Stock Management System you choose must be the right fit for your business. Ask any system: Do they work with businesses like yours? Will your team find it intuitive? Does it integrate with your POS and accounting software? Can they clearly tell you where your cost of goods savings will come from?

Related Guides in This Series

Stock management is one of three levers for improving your food cost and gross profit. For the complete framework: Restaurant Stock Control & Food Cost Management: The Complete Guide.

Other guides: How to Get Better Prices from Your Suppliers, Why Your Inwards Goods Process Is Costing You More Than You Think, How to Reduce Food Waste, Recipe Costing for Hospitality.