Enhancing Restaurant Profitability Immediately with Real-Time Insight

By Christian Mouysset Co-Founder – Sales at Tenzo (https://www.gotenzo.com/)

The hospitality industry is facing unprecedented challenges. Having survived the upheaval of COVID through innovative thinking and a rapid adoption of new tech, including apps and QR codes, the latest hikes in wage costs and business rates are pushing many to the edge.

Cutting hours, shrinking menus, even reducing locations is one response but where does that leave a company’s long term growth plans?

This is an industry that has one big advantage: the power to achieve very rapid change. Effectively and quickly manipulating powerful levers, from inventory to staff, can have an immediate impact on profitability. Restaurant General Managers (GM) can boost the day’s sales with savvy menu and staffing decisions. Menu design can be optimised in real time based on ingredient costs to safeguard margins.

But these swift, intelligent actions cannot be achieved with historic information hoarded at head office. To maximise opportunities and improve profit, decision makers need to be empowered with immediate access to real-time insight that supports their operational needs, explains Christian Mouysset, Founder, Tenzo.

Escalating Operational Pressures
In a low margin industry, unexpected events can eradicate profit overnight. For the hospitality sector, which is juggling food inflation, recruitment challenges and changing customer expectations, recent legislative changes have caused significant problems. Cost increases associated with increased employer National Insurance (NI) contributions, increased minimum wage – especially for under 21s – and the proposed changes to business rates have caused understandable outcry. Many have opted to reduce staff, cut trading hours and close sites, undermining both profitability and growth plans.

And yet, some chains are bucking the trend. Individual restaurants are thriving. While there is no magic formula for success, hospitality has one simple advantage over other business sectors: the ability to effect immediate change. Restaurants don’t have to wait weeks or months to see the impact of decisions: profitability can be impacted today. And that is an enormously powerful tool.

Sales on a cold day can be boosted by offering a spiced hot apple juice or a warming soup. Savvy inventory buying decisions can be leveraged in a promotional special offer. Effective staff management can minimise costs without affecting the customer experience. The value is both tangible and immediate. This can only be achieved, of course, if the people taking the decisions on the ground, the restaurant GMs, Assistant Managers, even Head Chefs, have real-time access to relevant, easily accessible information – and that is where far too many hospitality companies are failing.

Leverage the Tech Stack
Operating a profitable restaurant business is tough in any climate. Post COVID, many hospitality companies have diversified by running take-away models alongside traditional eat-in options. They are leveraging diverse technologies, from apps to QR codes, to streamline booking and ordering and invested in a raft of systems to manage staff and inventory. But these tools do not provide the real-time insight required to empower decisionmakers, especially GMs, day by day.

Instead, information is collated and assessed, often on a spreadsheet, before finally being shared with the wider business. GMs get an updated report at least a week later – long after the time when any decision could have affected sales or profitability. Far too late to reduce food wastage or intelligently optimise staff levels.

Even worse, telling a GM that the restaurant had a great day last Tuesday and ‘do more of that’ is hardly going to boost morale. How many shifts have been worked since then? How many routine disasters averted? Good GMs are leveraging great people skills to manage both customers and staff; finessing supplier relationships when deliveries are late, short or damaged. They are fixing equipment and managing hygiene crises. They have no time for complex, detailed and outdated reports.

To drive real change, GMs need quick, relevant insight that supports their complex, challenging role; a simple, highly visual tool that provides no more than three or four actionable, empowering pieces of insight every day. Consolidating the diverse and deep data sets created by the existing technology stack into a real-time insight resource can transform the speed of decision making. In addition, AI tools can also make it easy for GMs to chat with the data and quickly understand how decisions affect the handful of Key Performance Indicators. Providing GMs with easy to consume, real-time data enables restaurant chains to embed profit-led decision making within day-to-day activity.

Optimising for Profitability
There are, of course, so many elements to running a successful restaurant. A restaurateur must have the magic combination of concept, ambience and location. A GM needs the diverse skill set and speed of response to manage a complex, high pressure environment.

But intelligently manipulating diverse levers can also optimise profitability in real-time across the entire business.

A menu engineering matrix that identifies the top (stars) and bottom (dogs) menu performers allows a company to assess options to improve the profitability of each item by changing the ingredients or updating the description. Adding real-time insight into the mix means every change in ingredient price can be factored into this matrix, enabling the company to make the changes required to maintain a profit goal for each item, such as tweaking the recipe or opting for an alternate ingredient source.

In addition to real-time tracking of menu item costs, detailed understanding of inventory provides vital insight into trends, from price volatility to wastage. Identifying wastage sources, incidents and patterns, enables companies to minimise over ordering and cut costs.

Tracking staffing patterns and costs, especially in the light of the hike in minimum wage for under 21s, is also key to understanding not only wage costs but also determining future strategy, from recruitment to training.

Conclusion
No one could underestimate the challenges facing the hospitality industry in 2026. Customer spending is down, costs are up and the outlook is tough. But there are very real opportunities to improve performance and keep growth plans on track – and many of the foundations are already in place.

Hospitality companies have invested in a compelling tech stack over the past five years and they are excited about the possibilities of AI. The only way to maximise this potential and, critically, address the crippling cost pressures now imposed through staff costs and business rates is to leverage this tech stack. This means consolidating data and using it to empower individuals across the business in real time – especially at the sharp end where the impact can be immediately enjoyed.