“Restaurants were already teetering on the edge. If they’re to survive this, the industry must come together” wrote Sophie Gilmour. APRIL 25, 2020
In “the good old days”, owners used to enjoy running their hospitality businesses. Profit margins were over 20%, the staff loved their jobs, customers valued the service, and life was a dream!
When did it all go wrong? We are not sure, but we at Consortium Food Group Australia have backed ourselves to be the ones to call for a recalibration. The Covid-19 shutdown had a huge effect on the industry and forced closure for many operators.
The attempt to innovate menu offerings while keeping prices down by pressing our providers but they are barely making ends meet, and we negotiate with our landlords to help us treat rental reviews quite and keep their buildings. The reality is, we find it difficult to get our fire plenty of time — because we are exhausted, although we try to spark passion we work with, we are exhausted from trying to remain in business.
We try to keep costs down by pressing our suppliers, and we negotiate with our landlords to help us keep their buildings and treat lease reviews fairly. We try to ignite passion we work with, but the reality is, we find it difficult to access our passion a lot of time — because we’re exhausted from trying to remain in business.
CFG Australia has brought together our members and suppliers to make business better. Our performance is not judged on the savings we can generate from a single item, but by what we offer to members as a whole, and by what working together actually means for business owners. Savings from 5% to 30% on the day to day operations are easily achievable when numbers are strong. That’s why we strive to ensure the growth of CFG as a group.
The Australian hospitality industry is famously world-class and taking them away from us during Covid-19, made us realise just how much restaurants, cafés, and pubs are valued by our communities.
|How the average venue operates with $1|
|Operating Costs: 31c|
|How CFG Venues Operate with $1|
|Operating Costs: 25c|
Is it possible to reduce prices without compromising quality? 100%, supply should not be higher than 25% of your total expenses.
Operating costs include utilities, insurance, accountants, bookkeepers, consultants, maintenance, point of sale, credit card processing fees, licenses, permits, marketing — there normally is not much change out of that $1 of earnings when operating on your own. Our solution? It is simple, we cannot do anything about Wages or Rent, we cannot do much in terms of licenses and permits, but we save from the smallest items of takeaway bags and boxes to the biggest expenses of fruits, veggies, meats, milk, electricity, gas, internet and more. We have reopened the profit margin by creating a consortium. Can you increase the price of some menu items as well, of course – within reason you can price menu items to maximum profit.
Margins can be reclaimed by the hospitality industry together. We have over 100,000 food outlets in Australia and together is the only viable way hospitality will survive.
|4 Cup Tray (100)||Avg : $20.5||CFG : $13.5|
|Burger Box (250)||Avg : $57||CFG : $34.15|
|5LT Bleach 4% C||Avg : $14.5||CFG : $4.75|
|5LT TF Dish Liq||Avg : $16.8||CFG : $10.25|
|Domain Name||Avg : $80||CFG : $11|
|Annual Review||Avg : $600||CFG : $50|
|Phone / NBN||Avg : $387.5||CFG : $119|
|Gas / Electricity||Avg : $1,656||CFG : $1,325|
It is sad to think it’s a fact that lots of restaurants won’t endure the wake of Covid-19, but I agree with Hamilton’s point from the New York Times that”few people will return as we were… The concerns before coronavirus continue to be worldwide: the restaurant as we know it’s no longer viable on its own”. I also concur with Nunn that”the real threat that the restaurant industry faces is not annihilation — the threat is that it comes back exactly the same as it was before”.
In the interest of making sure everybody plays their role, transparency is key. A 20% profit is not exorbitant or greedy when compared to other business sectors, so we’d have nothing to conceal and as time goes on and Consortium Food Group Australia grows, we will be delighted to disclose NEW profit margins of our members and the average savings per week/month/year!
We’ve got an opportunity from Covid-19, and now’s the time to repair hospitality before it breaks itself even more.