5 tips to keep control of rising catering costs

Shabaz Mohammed

Shabaz is Managing Director of Pelican Buying - a procurement specialist that has been negotiating the best pricing and service from food and non-food suppliers on behalf of its customers for over 21 years. By using Pelican’s total collective purchasing volume of £140m, it is able to negotiate highly competitive trading arrangements with local and national suppliers, passing on substantial savings to all its members.

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Website: www.pelicanbuying.co.uk Email This email address is being protected from spambots. You need JavaScript enabled to view it.

The rising costs of key staples, such as food and energy, are continuing to have an impact on schools across the country, as business managers, bursars and senior leadership teams look to control their budget for the second half of the academic year.

What can schools do in order to be smarter when purchasing food items? And, importantly, how to do it without impacting on availability, quality, nutritional standards or exceeding budgets?

Below are some practical tips that school leadership teams can consider:

1. Align your menu with seasonal cycles

Buy more seasonal produce especially when the harvest is good. Work closely with your suppliers to identify seasonal cost trends and take advantage of low season prices, as ordering out of season produce can be costly, due to the associated import costs and limited supply.

2. Choose alternative products

  • Review the current specification of the products you are purchasing
  • Swap branded ingredients to cheaper own-label alternatives where quality is not an issue
  • Use suitable frozen alternatives instead of fresh when out of season. This will not only help lower the price but also reduce potential wastage as fresh produce can have a limited shelf life.
  • Switch product pack sizes; often, the bigger the pack size, the better the overall price. For products you use regularly, this makes long-term sense.

3. Review your suppliers

How do you know that you are getting the best prices and service from your suppliers? If a current supplier is reviewing its pricing, how do you know it is a true increase or simply a means of increasing its margins?

Having good supplier relationships remain an essential element in the business mix. However, it is important to find a way to separate your school agenda from your personal relationship with your suppliers in order to guarantee that you are paying the best price and receiving an appropriate level of service.

For many schools, a more comfortable way of ensuring they strike the most productive, efficient and profitable deals with their suppliers is to use a third-party purchasing agent that is qualified to CIPS standards to carry out detailed yet impartial work on their behalf.

4. Ensure you have a Formal Supplier Agreement

A professional and formal approach is needed to generate competition among suppliers and this means writing a detailed service level agreement or tender document that outlines the product needs and the exact service levels required. Equality, transparency and auditability should be applied to every part of the procedure.

To keep a grip on rising costs, ensure that the contract agreed with your supplier contains a price hold for at least six months.

5. Take control – use technology

Does your school use a system that can easily track your supplier invoices and overall purchasing spends, whilst ensure that expenditure is aligned to set budgets?

The absence of effective financial monitoring systems can lead to budget overspends and waste of vital resources (chasing suppliers for copies of invoices or credits for example).

There are now a number of systems available that maintain control over supply chain and payments. Some not only capture supplier invoices electronically, but also enable greater analysis of the resulting data.

For example, using the invoice data information, some systems can automatically update stock control lists or log the information against pre-determined budgets. This means at any time you can visibly track your budget without fussing with spreadsheets.

There’s also the added advantage of being able to easily produce monthly profit and loss reports for each cost centre, so individual departments or business managers know exactly where they stand at any given moment and are not caught out by unexpected expenses.

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