Why QSRs Shouldn’t Overstock

It never hurts to be prepared is a saying whispered by blog writers named Delilah and paranoid doomsday bunker-builders, but when it comes to how you manage your inventory, getting overzealous with your preparation can lead to some destructive results.

Buying more inventory than you need may seem like a good idea (because it never hurts to be prepared, right?) until you realize how much it can affect your business’s cash flow. That’s why it’s so integral to have a strategy that not only optimizes how you use your inventory, but that cuts out any room for waste or unexpected failures.

Waste Not, Want Not

By far the biggest offender in any QSR is food waste, which can take on a number of forms. There are the specific ingredients, like dairy products or meat, that go into your final products (such as a coffee beverage or sandwich), whose use relies on those specific menu items being ordered.

And then there’s the kind that comes from the products that are already prepared—pastries, pre-made sandwiches or juices—that have such a short shelf life, that they’re sometimes tossed at the end of the day they’re prepared.

Food waste is also a huge environmental offender (with restaurants typically contributing to at least a third of many cities’ total food waste), which can paint the picture of just how intense food waste is on not only the environmental scale but also how it comes out of your business.

Of course, it’s understandable that as a business owner, you may care more about how food waste correlates with cash deficit rather than your contribution to a landfill, but it’s in vogue to be eco-friendly, and your customers may like you better for it!

What Goes In, Must Come Out

If you find yourself with excess—and then because of that, with excess that you can’t put to use—it may be time to take a long, hard look at your how you order stock.

The concept of first in, first out, or FIFO, not only helps you keep organized, but it also forces you to acknowledge whether any of your inventory is expiring or expired, and whether you always use products you can call with confidence “fresh.”

FIFO also comes with a monetary incentive that’s attached to it: because the cost of goods tends to increase over time, you may be able to get away with selling your product at a slightly higher price because it is now worth that much. While it’s a great way to make a little extra profit, ultimately you want to use it because it helps move your inventory in a way that ensures you’re clearing out the oldest stock first.

Don’t Skew Your SKU

Think about what you yourself would want out of a beverage or bite to eat: a quality product, that tastes great, and is made from only the freshest ingredients. So if there’s any reason to not overstock, it’s because you want to ensure your own customers’ experiences are nothing but positive.

There’s an endless list of worst case scenarios that could happen because you maintain inventory that’s overstocked. Besides the obvious (throwing out expired food, which is like throwing away money), if you actually use some of that older inventory, you can risk inducing food poisoning in your customers, and obviously, that would be terrible.

If you’re at all concerned about how to prevent waste, rest assured that trial and error can help you solidify an inventory strategy that keeps your finances in check, your inventory nicely arranged, and your customers singing praises.