Crafty Ways Restaurants Cut Costs

Also See: 8 Restaurant Ploys to Watch For

When it comes to dining out, Kevin Moll is the kind of frugal patron restaurant owners would love to see more of. The father of two from Denver always passes on the cream and sugar. He never pours a blob of ketchup next to his fries. Even better, after enjoying a plate of barbecued ribs, he usually prefers to wipe his saucy fingers with a cloth napkin, since the cleanup job would require at least three of the paper variety. And don’t even get him started on carbonated beverages. This is a guy who prefers cola a little watered down.

With hard times still taking a bite out of restaurant profits, more Kevin Molls are turning up at their tables—not as patrons but as professional nitpickers. The 50-year-old CEO of National Restaurant Consultants is one of a burgeoning wave of efficiency experts who focus on restaurants, checking for unused half-and-half and testing the syrup level in fountain drinks. While no one tracks the number of these professionals in the restaurant field, the Labor Department says there are now some 678,000 efficiency gurus working to cut waste and maximize profits across a wide range of industries, double that from a decade ago. Moll and his food-service brethren do it by carefully pricing out a kitchen’s every move—like making ranch dressing every three days instead of daily, which can shave prep time by 15 to 18 minutes. They help fine-tune recipes to economize on ingredients. (Taking olive oil out of the marinara sauce saved one chain $17,000 a year.) And they “engineer” menus to spotlight the highest-margin offerings. Forget soda; iced tea costs a restaurant as little as a nickel a glass.

The $566 billion restaurant industry is anxious to save as many shekels as it can—preferably without diners noticing a difference. Even with the uptick in some sectors of the economy, the dining-out industry is lagging, as it tends to do in bad times. According to surveys from the National Restaurant Association, 59 percent of the country’s restaurant owners, on average, have reported a drop in same-store sales every month for the past year. Industry veterans like Lloyd Gordon, who has been consulting for the past 46 years, say times have never been tougher. Restaurant sales typically dropped 20 percent during past recessions, he says, but they’ve plunged as much as 50 percent in some parts of the country today. “A lot of restaurants are bleeding,” says Dean Small of Synergy Restaurant Consultants in Laguna Niguel, Calif. “In some cases, they’re hemorrhaging.”

And so they turn to Moll and his ilk, whose secret sauce of savings tactics can be traced back decades. The modern-day efficiency movement, largely thought to have originated in Japanese car factories after World War II, took off on these shores after American giants like Motorola [MOT] and General Electric [GE] began famously boosting profits with similar practices in the 1980s and ’90s. Other industries took note—and a growing cadre of consultants followed. If you’ve traveled in the past few months, you’ve probably noticed their handiwork: disappearing mini shampoo bottles in the hotel bathroom, fewer complimentary magazines in the airline seat back. Such ideas might seem like small potatoes to some, but Moll and his team of experts have come up with enough tips and tricks to fill a 175-page bible on how to run a profitable eatery. For his clients, the often-tiny cuts add up, generating savings or revenue-boosting ideas that goose margins, on average, by 15 percent. “Operating a restaurant,” reads one passage of the guide, “is a game of pennies.”

Moll learned, when running his own bar and grill two decades ago, that managing an eatery is like navigating “a boat full of holes.” And the trim, java-fueled consultant—running on four to five cups daily—is nothing if not a time-is-money, tight-ship kind of guy. He records any passing work inspiration (“note to self”) on his cell phone, even while walking his dog. In his clutter-free office, the only papers visible are arranged in a compact stack, perfectly parallel to the edge of the desk. And while driving his pristine white Cadillac between tightly scheduled appointments, he admits that he’s called the city’s 311 hotline more than once to report street garbage that needs removal. Clearly, no detail is too small.