What Your POS Reports Are Really Saying

By Donald Burns, Foodable Industry Expert

The restaurant point-of-sale system. At first glance it might seem like another boring piece of equipment taking up space on your counter. Sure, we use it to order food, drinks, and cash out patrons at the end of their meal. Your staff may clock in and clock out on it. At the end of the night, the management team runs the daily sales reports. However, there’s so much more inside your POS reports that can help you fine-tune and maximize your profitability.

The Product Mix Report

A funny thing happens when you work day after day in your restaurant. Your mind actually starts playing tricks on you. If you sat down with most restaurant owners, held a product mix report in your hand for the last 30 days, and asked them what was the number one seller in the restaurant, eight out of 10 would guess incorrectly. 

It’s not their fault. It’s just the way our brains are wired to receive and process information. You see, the restaurant owner probably walked by the kitchen a dozen times on a Friday or Saturday night and saw the ribeye plated up and ready to go out to hungry diners. Psychologists and cognitive scientists call this confirmation bias. It’s a tendency to search for and interpret information in a way that confirms one’s perceptions. It also leads to a lot of errors.

You might think you know what your customers want and buy. The truth is, your product mix report is the real judge. If you know the cost of every item on your menu, you can really maximize its profit potential.

This takes us down the avenue of menu engineering where you enter three key data points: cost of the menu item, the menu price, and the number of items sold over a selected time period (six months seems to give the best results). From this information, each menu item will then be given a stratification of either a star, a workhorse, a puzzle, or a dog.

Stars: These items are highly profitable and popular. You don’t mess with stars.

Workhorses: These items are not so profitable, yet are highly popular. You have half of the winning equation of the stars. The best thing to do is rework the plate or recipe to reduce the cost and thus move it up to star status.

Puzzles: These items are highly profitable. However, they just don’t sell. This can be fixed by better placement on the menu. You can also train your service team to recommend these items and give them a much needed boost in sales.

Dogs: A dog is just a dog and they need to come off your menu. The problem is that many owners and chefs have an emotional attachment to the dogs on their menu. If you want to maximize your profitability, you need to let them go. Shed a tear if you must, then say goodbye. They’re just killing your profits.

You might think you know your customers. Your product mix report is the smoking gun of evidence to what they really desire and will pay for. Use that data to deliver more of what they crave. Remember to run your product mix report every four months because your guests’ wants will change, and you need to be able to adapt quickly before the competition does.

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The Sales Report

Buried in-between the lines of sales numbers like gross sales, tax, voids, and comps, there is an interesting statistic that you should pay attention to: the guest check average.

Some people might say you should analyze table turn and focus on increasing productivity by measuring the number of tables a server can handle in a given hour. It has some merit if all your servers are of equal skill. The truth is, they probably are not.

Some servers might be able to manage five tables while another can only manage four. Does that mean the server who can manage five tables is better? Not necessarily.

Let’s not forget that thing that keeps restaurants alive is sales and profitability. Tracking and measuring guest check average levels the playing field for your service team. It also can eliminate some of the issues that arise when assigning sections to the floor.

If you’ve ever had a server complain about their section on a Friday night, here is a great way to stop that. Post and track the guest check average of every server from the highest to lowest. It’s quite simple after that — the people with the highest guest check average are assigned the best sections. If the low performers want better sections, that puts the challenge on them to raise their guest check average.

Now to be fair, you’re going to have to support and train them on ways to improve their guest check average. That might involve hiring outside trainers or consultants to come in and work with your team on building rapport, nonverbal communications, consumer behavior, and neurolinguistic programming (NLP). Just make sure you get a professional to work with your team so they don’t develop some stale, non-emotional, outdated canned sales pitch when they walk up to a guest. “Would you like to start off with a blooming onion basket and a pitcher of beer?” …Ah, no thanks.

The truth is, as competition grows larger, your market share will start to grow smaller. The smart way to combat this is to focus on increasing the amount each guest spends in your restaurant. How you train your team is how they’ll perform. It’s sad that usually the first thing that gets cut when sales decline is the investment on training.

If your sales have plateaued and you find yourself stuck in a rut, ask yourself “why?” It’s not easy to change old ways. Most people lack the courage to push through their comfort zone. However, it’s on the other side of that comfort zone that you will find the success you’re looking for in yourself and your restaurant.

The old prospectors who ventured West with gold fever had a common expression, “There’s gold in them thar hills!” Think of your POS system in a similar light. There’s gold in there; you’re just going to have to dig and decipher the data to get it.