Single Store Owner

JAN-FEB 2016

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foodservice 38 / Convenience Store News for the Single Store Owner / JANUARY/FEBRUARY 2016 Prepared Food / Hot, Cold, Frozen Dispensed Beverages Foodservice 301: Call to Action Consider partnering with a QSR chain or franchise program. Strategic partnerships are vital, certainly in terms of cost, for single stores. Cross-promote your MTO offerings with other profitable programs like fountain, coffee, etc., in an effort to get your regular customers to try the new program. Always factor your projected waste costs into your retail prices. Hot foods will certainly create more waste due to a shorter shelf life. Near-zero waste should be your goal for a successful MTO program. Waste for MTO is generally due to portioning and theft. and grow volume without having negative margins after maturity." Always keep in mind, though, that conversion to a MTO environment is labor intensive. There really is no way to execute a successful made-to-order program without adding staff. "You will need someone to lead the program, and assistants to manage shifts and develop skills. Without the proper structural support, the project will not be successful," concurred Cushman. Also keep in mind that the cost of labor is part of the retail price in any pro-forma you use to deter- mine the cost structure. "Concerning prep work, it all depends on how close you want to get to 'scratch cooking,'" continued Cushman. Most foodservice operations, he said, with the notable exception of diners, do not do true "scratch cooking." "Prep is usually done during slow periods," he said. "Final assembly will be the staff 's key duty, and is a key component in executing a successful MTO program." "You cannot reasonably expect one person to both run a retail store and a MTO foodservice pro- gram at the same time," echoed Mandeltort. A MTO program requires, at the least, adding one person dedicated to execution of all aspects, including but not limited to: preparation, inventory control, food safety and final assembly. While this means an increase in costs, the competitive advan- tage a single-store operator gains from transitioning to a MTO program is well worth the investment. SSO Low Impact One topic that must be fully vetted before a single- store operator can make the transition from GNG to MTO is: How will an already profitable GNG program be impacted by adding MTO products into the mix? "I don't see a MTO program impacting GNG negatively," observed Cushman. "It may make you change your product mix a bit, as customers may see certain items fresher with MTO." For example, selling prepackaged subs against a MTO sub pro- gram may not be a wise strategy. But there very well may be a positive impact of MTO sales on your GNG items. "Your grab-and-go program will still be successful if it's mer- chandised properly," added Prast. "If you sell more items in the MTO program, then sales of all the 'extra' GNG items like snacks, desserts and drinks should increase in the grab-and- go section." Indeed, Prast cautioned single-store operators against elimi- nating their GNG items completely in favor of a total conversion to MTO products. "Not having a GNG section to comple- ment the MTO program is not a good decision," he said. "Some customers just don't want to wait, so GNG still has a strong place in the store." There will inevitably be some cannibalization of a GNG program when MTO is added in. The simple fact of fresh products being offered next to prepackaged fare virtually assures fewer GNG items will be sold — even at lower price points than MTO products. And yet, the higher margins yielded by a MTO program will likely make up for any encroachment in GNG sales for the typical single-store operator. "As sales in both programs grow, so will profit," explained How To Crew member Larry Miller, president and founder of Sanford, Fla.-based Miller Management and Consulting Services. "With higher margins resulting from eliminating manufacturer and distributor profit margins, single-store opera- tors will find they can run promotional discounts David Bishop / Balvor LLC Ed Burcher / Burcher Consulting Joseph Chiovera / XS Foodservice & Marketing Tom Cook / King-Casey Jack W. Cushman / CST Brands Inc. Dean Dirks / Dirks & Associates Eric Giandelone / Mintel Foodservice Ryan Krebs / Rutter's Farm Stores Mathew Mandeltort / Eby-Brown Co. LLC Larry Miller / Miller Management & Consulting Tim Powell / Q1 Productions Chad Prast / Murphy USA Inc. Jennifer Vespole / QuickChek Corp. Our HOW TO CreW

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