Chapter 3 – Sales History and Forecasting
Chapter Outline:
- Importance of forecasting
- Using sales history
- Food, beverage and labor forecasting
- Factors affecting forecasting
- Forecasting in the “big picture”
Learning Objectives:
- Define terms related to sales history and forecasting, such as sales, guest count, check average, etc.
- Explain the importance of sales history data, including the types of data to collect
- Explain the importance of forecasting to effectively managing a foodservice operation.
- Describe the use of a popularity index for forecasting production.
- List factors that affect forecasting in a foodservice operation.
Key Terms:
- Sales history
- Customer count or covers
- Guest check average
- Food cost percent
- Popularity index
- Beverage cost percent
- Labor Cost percent
- Over/Under-pouring
- Emergency stock
- Table turns
Forecasting in the Foodservice Operations
The ability to accurately forecast sales and expenses is a necessary skill for a manager or owner to possess. In this chapter, we will look at ways to help you to become more proficient in forecasting both your sales and expenses.
Using the history of past sales in your foodservice operation is critical when attempting to accurately forecast future sales. But, as the famous investing quote states “Past Performance does not guarantee future results”. It is not enough to only look at the past to predict the future. There are just too many variables that can positively or negatively affect our operation. In this unit, we will look at several ways food service operations can attempt to accurately forecast.
Two important figures to track in a foodservice operation’s sales history, in addition to overall sales, are customer count or number of “covers” and check average. Many operations record these figures hourly and use them daily to control both food production and labor usage. These figures are likely part of a computerized sales and accounting system and can be saved for multiple years. Looking back at these records is often the basis for predicting future sales and customer counts. Guest check average is also useful in comparing performance from one time period to another or one unit to another. Guest check average, past customer counts and sales are also critical to developing budgets and other plans for future operations.
Calculating the guest check average is quite simple as long as the proper records are being kept. The check average is just what it says, the average of what each guest spends. It is calculated by dividing the total food and beverage sales by the total number of guests (or covers) in a particular time period. Challenging operators, managers, and even servers to increase the guest check average over a period of time or during a particular meal period can be a way to motivate everyone in the operation to help increase revenue and “grow” the business.
As managers or owners, we must walk a fine line between having enough product or labor, wh