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RESTAURANT PROFIT SYSTEMS

Prime Cost Audit

October — December 2024

Tony's Italian Kitchen
Full-Service Restaurant · Minneapolis, MN

⚠️ Executive Summary

Tighten Up — Watch Costs
Prime Cost
64.4%
65% target
Net Profit
2.5%
$2,179/month
Monthly Bleed
$8,255
Recoverable
Annual Impact
$99,060
If unchanged
🔴 Biggest Issue

Food cost at 35.2% is bleeding $2,780/month. Combined with $3,061/month in avoidable overtime, you're losing nearly $6K/month on controllable costs alone.

✅ Quick Win

Cut 22 overscheduled hours on slow shifts (Tue/Wed lunch, Mon dinner) — saves $1,090/month starting next week.

Prime Cost Breakdown

Food Cost 35.2% (target 30%)
Labor Cost 32.0% (target 30%)
Pour Cost 21.7% (target 20%)
Operational Expenses 14.6% (target 12%)
PRIME COST TOTAL
64.4% (0.6% under target ✓)

⚠️ The Hidden Problem: Your prime cost looks okay at 64.4%, but you're only netting 2.5% profit because OpEx is eating 14.6% instead of 12%. Plus, food cost at 35.2% vs 30% target is bleeding $3,692/month in controllable costs.

Food Cost Analysis

Critical · $44,304/year
Protein portion drift on high-volume items
$1,840/mo
Chicken Parmesan (892 sold/month) and Veal dishes running 32-38% food cost vs 28% target. Top 5 items = 53% of food sales.
🎯
Install portion scale at grill station. Retrain cooks on 6oz chicken breast spec (currently portioning 7-7.5oz).
Week 1 · low effort
Seafood category severely over target
$1,050/mo
Seafood running 42% food cost vs 35% target. Shrimp Scampi has $9.40 food cost on $23.99 price (39%). Lobster Ravioli similar.
🎯
Reprice seafood: Lobster Ravioli +$4, Shrimp Scampi +$3, or reduce portion size.
Week 2 · low effort
Supplier price creep not passed to menu
$1,400/mo
4 key items up 10-16% in 3 months: chicken breast +13.7%, ground beef +10.7%, mozzarella +14.6%, olive oil +16.1%. Menu prices unchanged.
🎯
Raise prices on protein-heavy items: Chicken Parm +$2, Veal Marsala +$3, Lasagna +$1.50.
Week 1 · low effort
Bottom performers dragging down margins
$400/mo
Eggplant Rollatini, Stuffed Shells, Shrimp Scampi selling <50/month with food costs 35%+. Taking up menu space and prep time.
🎯
86 bottom 3 performers. Replace with higher-margin pasta specials.
Week 2 · medium effort

Labor Cost Analysis

Warning · $20,868/year
Labor Cost
32.0%
Target: 30%
SPLH
$44.80
Target: $45
Monthly OT
$3,061
41 hrs/week
Chronic overtime for 4 key employees
$3,061/mo
Maria S (48hrs), James T (52hrs), Carlos M (46hrs), Tony Jr (55hrs) = 41 OT hours/week. Costing $765/week, $3,061/month.
🎯
Hire part-time prep cook (20 hrs/week at $14/hr = $1,120/month) to eliminate James T overtime ($860/month saved net).
Week 2 · medium effort
Overstaffing during slow periods
$1,090/mo
Tuesday lunch: 24hrs scheduled, 16 needed (8 excess). Wednesday lunch: 6 excess. Monday dinner: 8 excess. Total: 22 hours/week wasted.
🎯
Cut slow-period scheduling: Remove 1 server from Tue/Wed lunch, reduce Mon dinner by 8 hours.
Week 1 · low effort
Manager overtime eating into profits
$500/mo
Tony Jr. consistently working 55 hours/week. 15 hours OT at $22.50/hr = $337.50/week.
🎯
Cap Tony Jr. manager hours at 45/week. Delegate closing duties to shift lead.
Week 1 · low effort

Vendor Analysis

Vendor Monthly Spend % of Total Terms Status
Sysco Minneapolis $14,200 50.4% Net 14 Concentration Risk
US Foods $5,840 20.7% Net 21 Good
Minnesota Produce Co $3,120 11.1% COD Poor Terms
Capital City Meats $2,650 9.4% Net 7 Good
Bella Cheese Imports $1,340 4.8% Net 30 Good
Twin Cities Seafood $1,000 3.6% COD Poor Terms

⚠️ Price Increases Detected (Last 3 Months)

Chicken Breast 6oz
+13.7%
Sysco Minneapolis: $2.85 → $3.24 · Annual Impact: $3,744
Mozzarella Shredded 5lb
+14.6%
Sysco Minneapolis: $18.50 → $21.20 · Annual Impact: $1,944
Ground Beef 80/20
+10.7%
Capital City Meats: $4.20 → $4.65 · Annual Impact: $1,620

💰 Negotiation Targets

Sysco Minneapolis
Target: -$710/mo
Current spend: $14,200/mo · You're giving them $170K/year. Request 5% rebate on top 10 items or threaten to split with US Foods.
US Foods
Target: -$290/mo
Shift more volume from Sysco in exchange for better pricing on proteins and dairy.

90-Day Action Plan

WEEK 1 — Quick Wins ($4,390/mo)
Install portion scale at grill station. Train cooks on 6oz chicken spec.
Food Cost · low effort · +$1,200/mo · Owner: Kitchen Manager
Raise prices: Chicken Parm +$2, Veal Marsala +$3, Lasagna +$1.50
Menu · low effort · +$1,600/mo · Owner: Owner
Cut slow-period scheduling: -1 server Tue/Wed lunch, -8 hours Mon dinner
Labor · low effort · +$1,090/mo · Owner: Manager
Cap Tony Jr. at 45 hours. Delegate closing to shift lead.
Labor · low effort · +$500/mo · Owner: Owner
WEEK 2 — Build Momentum ($2,860/mo)
Reprice seafood: Lobster Ravioli +$4, Shrimp Scampi +$3
Menu · low effort · +$850/mo · Owner: Owner
86 bottom performers: Eggplant Rollatini, Stuffed Shells, Shrimp Scampi Linguine
Menu · medium effort · +$400/mo · Owner: Owner/Chef
Hire part-time prep cook (20 hrs/week) to eliminate James T overtime
Labor · medium effort · +$860/mo · Owner: Owner
Install jiggers at bar, retrain on standard pours
Pour Cost · low effort · +$250/mo · Owner: Bar Manager
Call Sysco with US Foods quotes. Demand price match on chicken, cheese.
Vendor · medium effort · +$500/mo · Owner: Owner
WEEK 3 — Systems in Place ($1,305/mo)
Cross-train 2 servers on expo to reduce OT dependency
Labor · medium effort · +$600/mo · Owner: Manager
Get competitive quotes from 2 payment processors
OpEx · low effort · +$305/mo · Owner: Owner
Get protein quotes from US Foods, Restaurant Depot, Capital City
Vendor · medium effort · +$400/mo · Owner: Owner
WEEK 4 — Lock It In
Review food cost after 3 weeks of changes. Should be trending toward 32%.
Food Cost · low effort · Owner: Owner
Finalize vendor negotiations based on competitive quotes
Vendor · medium effort · +$300/mo · Owner: Owner

🎯 Total Identified Opportunities

Quick Wins (Week 1)
+$4,390/mo
Medium-Term (Week 2-3)
+$3,865/mo
Total Monthly Impact
+$8,255/mo

If you implement all recommendations:

$99,060/year

back in your pocket

Next Steps

  1. Schedule 30-minute implementation kickoff call within 48 hours
  2. Print portion spec sheet and post at grill station by Friday
  3. Update menu prices in POS system this weekend (before Monday service)
  4. Post new schedule for next week with slow-period cuts
  5. Pull Sysco invoices from last 6 months for negotiation prep

📞 Implementation Support Available

Need help implementing these recommendations? Our Advisory retainer ($1,500/month) includes continued support, monthly check-ins, and priority access during implementation.

Data Limitations

The following limitations affected this analysis. Providing additional data would improve accuracy:

  • No recipe cost cards provided — food cost per item is estimated from category averages. Full menu engineering would require actual recipe costing.
  • Theoretical food cost not available — cannot calculate exact waste/theft variance. Recommend implementing waste log.
  • Tip reporting not included — labor analysis is base wages only.

Prepared by Restaurant Profit Systems

contact@restaurantsprofitsystems.com · restaurantsprofitsystems.com

This report is confidential and prepared exclusively for Tony's Italian Kitchen.