Page 27 - Foodservice magazine may 2019

MANAGEMENT
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cheaper than premium cuts. For example, when a lamb shank costs a fraction of the price of a steak, it becomes a much more profitable alternative. But, as always, due to demand those cheaper cuts became more and more expensive to the point where all kinds of bits and pieces that usually went into pies or sausages were appearing on restaurant plates. These protein items were not usually suitable
for plain grilling, so the nature of dishes evolved to encompass slow- cooked menu items.
These replaced the old three-course menu and provided the two-fold benefit of hiding necessary price increases and encouraging the public to eat a variety of smaller dishes, thus inadvertently spending more. On top of this, the increased dining time provided a boost to beverage income. Income was further boosted by expanding the range of wines offered by the glass, sold at a relatively high margin.
Incidentally, this was also when some brave restaurants adopted
“Share plates replaced the old three-course menu and provided the two-fold benefit of hiding necessary price increases and encouraging the public to eat a variety of smaller dishes, thus inadvertently spending more.”
But restaurateurs were still experiencing rising costs and falling profits, and some started to recognise the inherent limitations of the entree, main and dessert menu structure. Customers began to baulk at $19 entrees with homeopathic quantities of ingredients and trade began to suffer.
The spotlight then moved to beverage pricing, and the margins placed on wines and other alcohols started to rise substantially.
During my time in the industry, wine margins have increased from 80 per cent up
to 250 per cent. This saw the disappearance of big-name commercial wines and the prevalence of boutique wines that the public did not recognise.
Then, a decade or so ago, intense competition and dwindling profits led to the next major change in menu structure – the advent of share plates.
a no-bookings policy, in order to thwart the economic loss from no- shows and late customers. So menu structure, beverage structure and booking policies have all evolved against competition and rising costs in an environment that is acutely sensitive to price increases.
Although innovation and creativity has a lot to do with public recognition and acclaim in this industry, it doesn’t command all trends. The maintenance of appropriate profitability however, has been the main driver of changes we have seen over the
last 50 years. Business operators don’t tend to make radical changes unless they have to, and of course imminent bankruptcy
is a fierce motivator.
Tony Eldred operates Eldred Hospitality, The Hospitality Management Specialists. Contact him on (03) 9813 3311 or at www.eldtrain.com.au