A Proven Way for Independent Restaurants to Cut Costs

The food service industry has changed greatly in recent years, with many of the most important developments making the business more difficult for small restaurants. Large chains have the ability to negotiate far lower prices from manufacturers and distributors, and that sometimes allows them to cut prices well below locally oriented competitors.

Joining the right type of restaurant buying group can allow an independent restaurant to keep its costs low without sacrificing quality. Deciding which food service buying group will make the most sense for a given operation will often end up being one of the most important steps of all.

Simple Ways to Determine Which Buying Group Makes the Most Sense

Every restaurant purchasing program revolves around the same basic idea, with member restaurants pooling their resources to exert greater combined leverage on suppliers. While large chains can negotiate discounts by virtue of their own size, only when independent restaurants join together in some fashion can they acquire the market power needed to extract concessions.

As those who follow here will see, the various programs that are now available differ from one another in significant ways. Some of the issues it will almost always be productive to look into include fundamental ones like:

Discounts. An especially effective purchasing program might entitle participating restaurants to discounts of anywhere from seven to ten percent on most orders. On the other hand, some buying groups reserve a relatively large cut of the rebates they negotiate for themselves, leaving little for participants to share. In just about every case, looking into the discounts to be expected early on will help clarify which programs are worth researching further.

Coverage. Even some apparently attractive buying groups end up being more limited in scope than would be expected. With so many distributors and manufacturers nationwide to deal with, some program administrators simply lack the resources needed to negotiate with a large number of these potential partners. Looking at how a given program's coverage aligns with the purchases that a restaurant is already making will always be helpful and advisable.

A Competitive Edge for Any Independent Restaurant

Many smaller restaurants have failed in recent years owning simply to a lack of cost controls. Joining a well-run purchasing program can allow an independent restaurant to lower its food costs enough to maintain attractive pricing. That can easily be the difference between succumbing to competition from larger competitors and flourishing for many years to come instead.