A New (and Better) Approach to Supply Chain Services for Restaurants

Operating a successful restaurant or restaurant chain isn’t easy.

While comprehensive industry and national data on restaurants is unclear, estimates from the National Restaurant Association say that the failure rate for restaurants is about 30%. No matter what the data really is, developing, launching, managing and growing a successful restaurant is extremely hard. It takes a lot of work, a great idea, excellent food, some savvy marketing, willing customers and more.

And yet, many restaurant managers and owners are putting themselves at risk of failure with their choice of distributor programs and supply chain decisions.

Distributor and Supply Chain Mistakes that Restaurants Make

With so many immediate needs, restaurant managers and owners often wish they had an easy button for non-food items. This is why many choose one-size-fits-all distributor programs for both food and non-food supplies. It may seem like it’s the easiest way to fill the restaurant’s needs, but there are many problems with these programs:

• Extremely high minimum quantities for basic supplies. Restaurants are often forced to pay a higher price for smaller orders or keep additional stock on hand to reduce the per-item price. This is wasteful and more expensive in the long run, as wasted inventory space, damage to items, and managing extra supplies on-site eats into any cost savings.
• Forced into using lower-quality supplies. With a single distributor, many restaurants are forced into purchasing the items that the distributor makes available at their price point. The restaurant ends up using supplies they and the customers aren’t happy with.
• Fewer options for supplies. Larger distributors boost profits with higher order quantities of lower-quality, readily available supplies. This puts you and your business in the hands of whatever non-food items are cheap and available to the distributor.
• Fewer options for branded merchandise. Branded merchandise is critical for marketing, but with a single distributor, you either pay a high fee with a higher minimum order or use a risky local resource for branded merchandise that doesn’t adequately match your other non-food supplies.
• Lengthy shipping times that leave you scrambling. Your food distributor is an expert at food, but for them, the non-food items aren’t a priority. They may have fewer warehouses and slower shipping times, which can leave you without critical supplies.
• A complex and frustrating order process. Because non-food supplies aren’t the core business, the ordering process can be convoluted, confusing and complex.

Single-source distribution for food and non-food items doesn’t make sense for restaurants. It’s risky, expensive and not good business. But because it seems more convenient, many restaurants don’t look at other options.

With a little knowledge and understanding, there are better and ultimately more convenient ways to handle non-food restaurant supplies.

A Distribution Program Designed Around You

Margins can be tight for restaurants, with little room for error. The focus also needs to be on food and the customer, not constantly struggling with non-food inventory. Every restaurant is different, and so is their need for non-food supplies. It’s no wonder one-size-fits-all programs don’t work.

The benefit of using a distribution program designed around you and your restaurant's unique needs is powerful. It can be the difference between success and failure, and eliminate so much of the frustration, unnecessary expenses and headaches that so many feel about managing non-food supplies for restaurants.

There are more options beyond the single-distributor model for restaurants. Consider these opportunities:

• 3PL (third-party logistics) uses an additional partner to optimize your supply chain, using another carrier or a closer warehouse to increase fulfillment speed with last-mile direct-to-store delivery.
• Mixed pallet options let you reduce the minimum orders of individual items and offer more efficient store deliveries.
• If you need a full uniform and apparel program designed for restaurants, you can have a selection of apparel designed for the rigors of the restaurant industry, faster ordering using a convenient ecommerce site, and pricing controls to manage costs.
• A global supply chain network will give you built-in price controls and suppliers who compete for your business, so you can better manage costs and reduce the risk of backorders.
• Don’t miss out on marketing and branding opportunities with suppliers who specialize in branded items. Instead, select a program and merchandise that works for you.

GO2 Partners’ Restaurant Solutions

Recognizing the danger of one-size-fits-all distribution and seeing a market opportunity, GO2 designed our Restaurant Solutions program around the needs of restaurants for non-food supplies.

The program starts with an in-depth cost and market analysis to identify how your current non-food supply spend matches with the market and industry. Where are you paying too much? How does your order process match with the competition?

Once you have the data in hand and have a better grasp on how you stack up in the industry, we work with your restaurant or chain to design a program that meets your needs. Whether it’s higher-quality supplies, lower minimum orders or better price controls, the Restaurant team at GO2 will do what they can to help you reach your goals.

If you have questions about your current non-food supplies or would like to sign up for an in-depth price analysis, then contact GO2 Partners for more information.