StaerasWhy are margins falling when sales are steady?
Examine sales mix, purchasing, labor, and operating expenses to locate the pressure.
Business performance consulting for restaurants
Understand how sales and costs affect your restaurant’s profitability.
Staeras examines sales, labor, purchasing, and financial records to assess margin pressure and recommend changes to pricing, costs, or operations.
For independent restaurants and restaurant groups. Tell us what needs attention.
Questions worth investigating
Questions about your restaurant’s performance.
Which menu prices or portions deserve review?
Compare item sales and relevant costs before considering price, portion, or menu changes.
How much of the increase in food costs comes from supplier prices?
Compare supplier prices, purchasing quantities, menu mix and food use.
How does staffing compare with demand across the week?
Compare schedules and timesheets with orders, preparation work, and service needs.
What do delivery orders contribute after costs?
Assess delivery using order settlements, food, packaging, fees, and other relevant costs.
What explains differences between locations?
Compare demand, menu mix, pricing, labor, and local conditions before repeating a change elsewhere.
Start with one concern or related questions; the scope follows the decisions and records involved.
The engagement
How we work.
A written review of the evidence, options and financial implications, followed by a discussion of the findings.
View an exampleYou provide agreed records and operating context: POS exports, invoices, timesheets, inventory, recipe costs, delivery settlements or financial reports, depending on the question. Implementation follow-up is available by agreement.
Agree the work
Discuss the question and your current reports, then agree scope, fee, timing and required records before work begins.
Examine the records
Reconcile relevant reports, investigate the question and compare alternatives in your restaurant’s context.
Review the findings
Discuss the evidence, prioritized recommendations and financial estimates with their assumptions, then agree next steps.
Example analysis
Evaluating a menu price change.
The question
Would a higher price improve this dish’s contribution?
A $20 special uses $8.40 in recipe ingredients and sells 500 portions a week. Compare the amount left after ingredients over 12 weeks, allowing for fewer orders at a higher price.
- No price change$69,600
- 5% higher price$70,265
Adjust the assumptions
Change the price and assumed demand response to compare outcomes.
The chart shows the worked 5% price increase and 1.5 demand-sensitivity example. Interactive controls require JavaScript.
A setting of 1.5 assumes roughly 1.5% fewer orders for a 1% price increase.
At a 5% price increase, a 7.9% fall in orders would leave contribution after recipe ingredients unchanged.
Assumptions and calculation
The figures are illustrative. Demand adjusts immediately to the selected price. Weekly demand, recipe cost and sales mix then remain constant for 12 weeks. You select the demand sensitivity for the scenario.
Weekly orders = 500 × (new price / $20)−sensitivity. Revenue is price × orders; contribution here is (price − $8.40) × orders. The bars show 12 weeks of these amounts and use the same ingredient cost. Contribution deducts recipe ingredients only; it is not net profit. Labor, waste, packaging, fees and other costs are excluded.
The break-even fall in orders is 1 − ($20 − $8.40) / (new price − $8.40). Use item costs, demand evidence and operating constraints to assess the price.
The decision
More contribution from fewer orders.
Over 12 weeks, estimated contribution after recipe ingredients is $665 higher than with unchanged prices. Assumed order volume is 7.1% lower.
Contribution after recipe ingredients only. Other costs affect the result.
Before acting
Confirm recipe costs and test demand for the dish before changing prices across the menu.
Read the menu-pricing analysisAfter a test
Track orders and contribution for the dish, alongside waste, other costs and operating changes.
Why review this dish? The food-cost workings
In this worked example, food cost rises by $5,200 over four weeks while food sales stay at $100,000: $2,000 from menu mix, $1,700 from ingredient costs, and $1,500 still to verify. More sales went to higher-cost specials, prompting an individual price review rather than a blanket increase.
The price comparison uses the special’s later-period $20 selling price, $8.40 recipe cost and 2,000 orders over four weeks, equivalent to 500 a week. Changing its controls does not alter the historical reconciliation below. Its demand response is an assumption to test.
Illustrative figures over two four-week periods. The comparison brings together POS item sales, recipes and preparation yields, invoices and credits, and stock counts. The simplified menu has two groups. Selling prices, standard portions, and recipes are unchanged, with standard preparation yields included in recipe costs. Food sales exclude tax and tips; no discounts or refunds are assumed.
| Menu group | Selling price | Earlier quantity | Later quantity | Earlier recipe cost | Later recipe cost |
|---|---|---|---|---|---|
| Core mains | $16.00 | 5,000 | 3,750 | $4.80 | $5.04 |
| Specials | $20.00 | 1,000 | 2,000 | $8.00 | $8.40 |
The bridge recalculates sales mix first: later quantities at earlier recipe costs imply $34,000 of food cost. Applying the later-period ingredient costs, 5% higher in this scenario, gives $35,700. This order of comparison assigns the interaction between mix and ingredient costs to the ingredient-cost component.
| Included amount | Earlier period | Later period |
|---|---|---|
| Opening inventory | $7,000 | $8,000 |
| Purchases | $35,000 | $40,200 |
| Closing inventory (deducted) | $8,000 | $9,000 |
| Recorded food cost | $34,000 | $39,200 |
| Recipe-based expected food cost | $32,000 | $35,700 |
| Reconciliation difference | $2,000 | $3,500 |
Recorded food cost is opening inventory plus purchases, less closing inventory. The reconciliation difference is recorded cost less recipe-based expected cost. The earlier period already has a $2,000 difference, so the bridge shows its $1,500 increase, not the full later difference of $3,500.
Recipe and stock costs use consistent units and period ingredient-cost valuation, rather than the latest invoice alone. Invoices, credits, stock records, and sales share the same scope and cutoff. Verify inventory and recipe records before attributing the difference to waste or portion errors.
If the later closing-stock value were $1,500 higher after verification, the increase in the gap would disappear. This illustrates how stock valuation affects the comparison.
Labor, rent, and other overhead are excluded from this food-cost comparison, which does not establish net profit.
About Staeras
Business performance consulting.
Staeras is a business performance consulting practice. We bring financial and operating records together to examine results and assess decisions, informed by your knowledge of the business.
Discuss your restaurantBefore we talk
Working with Staeras.
Can you work with incomplete records?
We start with the reports you have, identify missing information and define the analysis. Menu contribution combines item sales with recipe and other relevant costs.
Will we need new software or a different POS?
Staeras uses existing exports and reports alongside your systems and advisers. Any preparation or additional records are discussed in advance.
Can the work address one question?
Yes. We can address one concern or related questions, starting with the change you have noticed if the cause is unclear.