Index Home About
From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: Something I wonder about...about tipping
Date: Sun, 20 Jun 1999 06:06:25 EDT
Newsgroups: rec.food.restaurants

DeeDeeJMS wrote:
> 
> You tip her 15% of the bill, if the service was decent. Most waitresses don't
> make as much as you think. For one thing, we generally make way below minimum
> wage.
> Then we have to tip out our busboys, bartenders, etc. Where I work, we
> tip out three percent of our sales. Also, we are taxed on 8% of our
> sales. So this waitress is probably making $2.15 an hour plus tips. For
> that $15 order of yours, she will tip the busser .45 and she will be
> taxed $1.20 if you leave her a $2.25 tip, she will take home about $1.50
> of it, after taxes.
> And again....at $2.15 and hour.

Hmm, sounds like you work for a 2-bit restaurant. or we're getting
croccidile tears.  I pay my waitresses $4.25/hr base and they knock
down $60-100 per day in tips. And this is in a town with a whole
bunch of cheap-skate non-tippers.  No down-tipping either.  I pay my
bussboys and don't expect them to.  Can't think of too many things
an uneducated person can do with their clothes on to make more money
than waiting tables.

John
-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngd@bellsouth.net>
Subject: Re: Something I wonder about...about tipping
Date: Mon, 21 Jun 1999 01:18:17 EDT
Newsgroups: rec.food.restaurants

Kim Stahler wrote:

 
> John,
> Sadly, most owners are not like you, and most states allow servers to
> be paid way under the minimum, so nearly all restaurants do.  I also
> like that you don't require workers to pay each other.  I worked in
> the business for 15 years and always made less than mimimum for a wage
> and was forced to pay the other workers, even ones who were making
> well above minimum, such as bussers and bartenders.
> 
> Wish I could have worked for you.  Would you please spread your
> philosophies around?  Best of luck with your operation.  I bet that
> your workers appreciate your progressive ways and show it in terms of
> loyalty and work ethic. 

you're kidding, right?  They take what I give them for granted and
want more.  I'm a retired nuclear engineer and this is my first
experience managing blue collar workers.  Five years in, guarantee
it will be my last. We (my wife and I) say a silent prayer every
morning when everyone even bothers to show up.  Apparently work is
something you do when you can't think of anything else to do. I
started out without even a timeclock.  After all, engineers and
technicians don't have to punch in and out, they just keep
timesheets.  Learned that lesson very quickly; now we have a real
BIG timeclock.  I don't make anyone clock out for breaks and they
eat a meal a shift free.  Pretty good deal, huh?  Well the waitress
I'm going to fire Tuesday ate three times Saturday (typical) and
spent almost an hour in the can across 7 trips (yeah it's horrible
to have to be counting but with today's legal client..).  She is
more typical than the exception.  It is intolerable to have a
customer complain about service but I got a BUNCH in the last couple
of days.  I could go on for pages but I won't.

Here are some questions that I've never been able to get answers
to:  Given that a server's pay in the form of tips is DIRECTLY
coupled to their performance, why do so many of them work so hard to
NOT get paid?  I'm talking about sorry service, smartass mouths and
give-a-damn attitude about the product they serve.  Why would all
the waitresses go over to a corner table and roll silverware with
their backs to the customers who are going to pay them at the end of
the meal?  Why do they let drink glasses get empty?  Why do they
take smoke breaks with customers in their areas?  Why do they bitch
about pay after they do all of this?  

I can understand why restaurant owners treat their employees like
they do.  I'd do the same thing if I had the heart for it.  A
career's experience of having colleagues work as team members is
just flat impossible to un-learn.  I'll sell this place as soon as I
can and let someone else deal with it.

The important thing to understand is that things are not the way
they are because owners are a bunch of ogres.  Things are that way
for a reason.  I've proven conclusively that treating employees well
makes no difference.

John
-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngd@bellsouth.net>
Subject: Re: Something I wonder about...about tipping
Date: Mon, 21 Jun 1999 01:33:48 EDT
Newsgroups: rec.food.restaurants

S wrote:
> 
> Wait a minute.  You're not TAXED on 8% of sales, you're supposed to PAY
> TAXES on 100% of your tips (that you keep, excluding tip-outs).  If
> you're paying taxes only on the 8% that gets DECLARED AND WITHHELD by
> your employer, you are cheating on your taxes.  That makes you a thief,
> no better than the guy who swipes your tip off another table.

You don't understand.  She's not paying taxes on 8% of her tips. 
She's paying taxes on 8% of her portion the SALES.  This is another
IRS scam.  The IRS decided a few years ago that servers were not
being honest with the good Uncle.  So instead of enforcing tax laws
on the servers, they took the easy way out and came down on the
employers.  Subject to much litigation and finally a deal between
the IRS and the NRA (nat rest assn), restaurants above a certain
size must withold a variable amount of money from the servers tips
based on an imputed tip income as a percentage of gross sales,
usually in the range of 8 to 15%.  It is then up to the server to
prove that (s)he has earned less.  Since proving a negative is
impossible, most servers just take the hit.

This was one of the abuses by the IRS that Congress addressed last
year.  Even so, according to the trade press, most restaurants are
sticking with the NRA agreement even though the IRS claims it is not
enforcing this rule.

Small restaurants such as mine are not subject to this rule.  The
law requires I report enough tips to bring the  server to minimum
wage and the server takes care of the rest.

Which brings up another question.  Why is it that servers flock to
the big chain restaurants for server jobs while ignoring the small
independents?  Is it prestige?  Or just ignorance.  We have an
informal independent restaurant roundtable here and EVERY small
restaurant has the same problem with finding decent employees.  At
the big chain store, the server is given 3-5 tables, is paid $2.25
an hour, runs his ass off because the kitchen is a half-mile away
from the tables, has to tip everyone from the matre'd to the garbage
man, has mandatory witholding and gets his schedule bounced around
at the management's whim.  In my place, a server gets as many tables
as (s)he can handle, typically 10-12, has to share tips with no one
and since we display-cook, the cookline is, oh, 10 steps away from
any table in the place.  maybe it's because we don't have those cute
chili peppers or fruit on our shirts...

John
-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngd@bellsouth.net>
Subject: Re: Something I wonder about...about tipping
Date: Tue, 22 Jun 1999 04:36:55 EDT
Newsgroups: rec.food.restaurants

Kim Stahler wrote:
> 
> On Mon, 21 Jun 1999 01:20:20 -0400, Neon John <johngd@bellsouth.net>
> wrote:
> 
> >Here are some questions that I've never been able to get answers
> >to:  Given that a server's pay in the form of tips is DIRECTLY
> >coupled to their performance, why do so many of them work so hard to
> >NOT get paid?  I'm talking about sorry service, smartass mouths and
> >give-a-damn attitude about the product they serve.  Why would all
> >the waitresses go over to a corner table and roll silverware with
> >their backs to the customers who are going to pay them at the end of
> >the meal?  Why do they let drink glasses get empty?  Why do they
> >take smoke breaks with customers in their areas?  Why do they bitch
> >about pay after they do all of this?
> 
> I cannot understand why you do not have servers fighting to work for
> you.  

I can't either.  We don't have the deep pockets of the chains but we
offer paid medical after 6 months service (can't remember when
anyone stayed long enough to qualify).  We're closed 2 weeks out of
the year for vacation and I usually pay the staff at least a
fraction of their normal salary for that week.  Despite constant
advertising, I go weeks at a time without even one applicant I'd
even consider for dishwasher.

I've even actively recruited servers from the chains.  I get some
variation of a pre-conceived notion that they won't make any money
or "oh, I don't want to work downtown".  My restaurant is in the old
part of town, a part that is struggling back on its feet after a few
decades of neglect.  BBQ seems unique in that people will drive out
of their way for good food.  Apparently having a fancy facade on the
restaurant is more important to these severs than a pleasant working
environment and good money.

> However, I was not able to take pride in
> the food I was serving, and that became a major problem.  

That's the problem.  Chains have become heat'n'serve dispensers of
commissary prepared food.  On the rare occasion when I have to eat
at a chain, I have to look at the signs to tell where I am - it all
tastes the same. (by "chain" I mean places like O'charlies and not
fast food "restaurants" (sic))

My place is just the opposite.  The steaks are USDA Prime, aged
in-house.  The pork is the best Grade A boston butt shoulder cut. 
All sides are hand-made by either me or my wife (because I've yet to
find a cook who gives a sh*t enough to even follow a recipe.) from
scratch.  Nothing except the ketchup comes from a can.  yet, even
though we have a picture book of dishes to refer to, the typical
server could care less what condition the food (s)he takes to the
table.  I took out the heat lamps soon after I opened cuz the
servers were using them as an excuse to finish the smoke break
before taking the food out.  By then it was dried out, of course.

>After a
> manager came in who exhibited hatred for his employees, I no longer
> had any loyalty and left.  Luckily, I am now working in my field.

Having walked in his shoes for several years, I can understand, if
not condone the attitude.
 
> Service isn't always tied to tip percentage, and this has been proven
> through various studies, since everyone has a different experience of
> what good service and good tipping is.  

Oh absolutely.  But on average it is related.  I can see that in how
much a good server makes vs a bad one.  90% of our customers are
repeat, many several times a week.  I know many of their tipping
habits so I can tell when they got bad service by the tip left.

Then there are the deadbeats.  The very worst, IMHO, are the ones
who go out of their way to identify themselves  as "christians" (as
opposed to those who ARE christians...)  We sometimes take bets on
whether they'll be deadbeats or not.  Rarely do we miss the guess. 
It's so bad that I've programmed a "tip key" on the register that
adds a tip to the bill in accordance with our stated policy.

Well, at least it helps to vent a little.

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdnospam@bellsouth.net>
Subject: Re: Something I wonder about...about tipping
Date: Wed, 23 Jun 1999 05:57:06 EDT
Newsgroups: rec.food.restaurants

Kim Stahler wrote:

 
> I don't think that the restaurant industry will change dramatically
> until its workers are paid in accordance with other blue collar
> professionals,

Professional?  Restaurant workers?  Not hardly.  Trained Chefs
excepted, there's no profession involved in work that can be
mastered by someone with a good attitude in literally hours.  Some
of my best servers have been college students who typically take,
oh, a day to come up to speed.  For the most part, restaurant work
is unskilled labor and that labor is paid pretty decently.  Where
else can someone without a high school diploma and with no
experience get a job paying $10 an hour? ($20 an hour equivalent for
CA since our cost of living is about half.)

> are universally unionized, and are viewed as true
> professionals, instead of having to depend upon the whims of the
> public for pay.  No other job is like this.  

No?  My food salesmen are paid on commission.  Ditto my insurance
salesman.  Ditto my chemical salesman.  Ditto my car salesman (if I
ever bought a new car.)  The difference is a server can DIRECTLY
control his or her income.  I see over a 3:1 difference in tip
income between the best and the worst servers I've had with the same
customer base.  The best servers don't complain about pay, they go
out and create their raises.

>The restaurant indusry
> gets quite a deal on its labor, unlike any other industry, but it pays
> in the overall quality of its workers, who don't tolerate this pay
> system for very long.

This is a very unprofessonal attitude that unfortunately seems to be
pervasive in the industry.  That there's some sort of "fix" in on
pay.  That the owners are hoarding away all the profits at the
expense of the poor proletariate worker class.

The simple reality is this:  There must be a certain amount of
revenue each month to make the restaurant viable and 100% of that
money comes from the customer.  It doesn't much matter whether the
customer pays you directly and calls it a "tip" or he pays me to
temporarily hold the money until you get it as salary.  The total
amount of money a customer is willing to part with is relatively
fixed so if I were to raise my prices to accomodate higher salaries,
either tips would suffer or customers just wouldn't bother and I'd
go out of business.  Labor cost is second only to food cost in the
restaurant biz.  

A related myth is that we owners are getting rich because we buy our
food "wholesale" and so the markup must be huge.  While true for
McDonalds, quite the contrary is the case for small restaurants.  I
pay just about the same price as you do at the grocery store. 
Sometimes more.  Every Thanksgiving I pull a truck up to the local
Wal-mart and buy them out of turkeys because they sell them at half
the price of my cheapest purveyor.  Ditto with brisket.  I run a
twice-weekly truck to Sam's Club because their french fries and a
few other goods are of higher quality at lower costs than the
purveyors.  The purveyors justify their prices with their delivery
service.

Me, I'll be glad when I get "rich" enough to take a regular salary.

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: Tipping - what's wrong with this picture?
Date: Thu, 05 Aug 1999 02:45:15 EDT
Newsgroups: rec.food.restaurants

DeeDeeJMS wrote:
> 
> Yeah, you're ahead tax-wise if you live in a state that isn't populated
> by rednecks who think a $5 tip on a $75 meal is a lot. Please. Work here
> sometime, you'll see.

Let's see.  You're a carpetbagger with an attitude, working in an
industry where your compensation is directly tied to the perceived
value rendered and you call your bosses rednecks?  No wonder you're
underpaid.  You should feel lucky to have a job - with an attitude
like that, you'd not get past the interview in my restaurant.  Just
a l'il redneck 200 seat joint where I pay $4/hr to my servers and
they consistently get tipped better than 20% of gross AND they don't
have to share the tips with anyone.  Yours just proves that people
tend to get what they deserve.

> I've gone home plenty of nights with only 6 or 7% of my sales. But tell
> that to the government. Try. They will allocate you 8% whether you made
> it or not if you claim below that amount.

No they won't.  All you have to do is supply credible records of
your earnings and you pay taxes on what you earn.  Just like I do.
Duh.

>They ASSUME you are lying to them, and that your
> really made a whole lot more and just don't want to claim it. 

No they don't.  They simply require you to document your income. 
Again, duh.

>Sad but true. And
> sadder and true is that they've come to this conclusion because so many
> servers DIDN'T claim their tips for so long.


 
> In any case, I don't think the argument for tipping based on the fact
> that we get taxed on a given amount of our sales is silly (at least, it
> isn't silly to those of us with first hand experience with it...), but I
> do think it is a sad indicator of how perverse this business is, and how
> overdue it is for a reform...to both the customers AND the employee's
> satisfaction. I think there's way too much animosity between servers and
> customers, in a way that I just haven't yet seen in other industries
> (nor do I hope to).

Only in your mind, DeeDee.  Little tip:  Building relationships with
customers (your boss for the meal) rewards you with very nice
income.  Us rednecks will tip as well or better than any other but,
ornery as we are, we will NOT tip bad service just because some
custom says we should.  You serve me and cop an attitude, let my tea
glass get empty, stand around and chat with the kitchen staff, make
me have to come get you for service, talk about your redneck
customers loud enough to be heard and I'll leave you two cents. 
Probably in the bottom of my drink glass.

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: In and Out
Date: Sat, 07 Aug 1999 05:12:17 EDT
Newsgroups: rec.food.restaurants

Regina Litman wrote:
[snip]
> Paying the server, even at informal restaurants.  (At my most recent
> visit to a Denny's, this had been implemented.)  

I agree with everything else but this one, called "self banking",
will be around for awhile.  The reason is it transfers all
responsibility for shortages and stiffs to the servers.  The POS
system keeps track of the sales of each server (that's what the
keycard each server carries is for.) and at the end of the shift,
the server has to pay the house the amount indicated for his/her
account.  It makes conventional stealing from the cash drawer
impossible and if a customer stiffs the server, he/she pays.  The
server's "tips" consist of what is left after paying the house. 
About the only fraud a server can engage in is "borrowing" another
server's keycard and ringing up orders on their account(s).  The
cheat pockets the payment and the victim server comes up short.

Interestingly enough, most honest servers like the system because it
encourages the customer to round the tip up to the next dollar.  If
the bill is $20.15, many people will round up to $25 instead of
waiting on change.

The only reason this appears as a "trend" is that it is only in
recent years that POS systems have been able to handle the
accounting.  Considering how much theft is (was) using the old
common cash drawer system, this "trend" is, in reality, the new way
of doing things.

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Mandatory tipping (was Re:)
Date: Mon, 09 Aug 1999 20:26:14 EDT
Newsgroups: rec.food.restaurants

ErnieChan9 wrote:
 
> Thats why I never liked the idea of mandatory tipping in certain restaraunts.
> It supposed to be voluntary but if you have 6 or more people you HAVE to tip,
> no matter how the service is.

We don't even call it a tip anymore.  Our menu and signs reserve the
right to charge a 15% service fee for parties of 6 or more.  We
generally only add the service fee if:

*	the customer has the exclusive use of our conference room.
*	The customer leaves an extraordinary mess.
*	The customer lets the kids run wild.

I very reluctantly instituted this fee after several years of
experience where I found that larger groups tend to require more
care than the same number of people scattered around the restaurant
and they tend to stiff the servers.  The WORST catagory of people
are those who go out of their way to identify themselves as
"christian groups".

I pass the service fee along to the servers so for them, it works
out to a mandatory tip.  But I want my customers to know that the
fee is for the extra services and resources they receive.  That's
why I call it a service fee.  Most groups tip better than 15% but
there are enough of the freeloaders that the policy must be there.

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: Brutal Management and sorry employees
Date: Sun, 15 Aug 1999 06:39:40 EDT
Newsgroups: rec.food.restaurants

Alexis Bentley wrote:
> 
> It seems like alot of clientele love to get down on the server.  I just
> walked out of a major hotel chain today after two and a half years, because
> I couldn't take the management anymore.  Anyone have any horror stories
> regarding management or bosses.

How 'bout some discussion about lying, thieving, sorry-a**ed
employees while we're at it.  You know, those barely literate
workers who think they outta run the joint despite dressing like
slobs, behaving like a curr dog in heat, coming to work only when
they can't think of anything else to do, when they do come to work
they're drunk stoned, unwashed or all of the above, who shuffle
through their shifts expending the absolute minimum possible effort,
who manage to smoke 2 packs of cigs on a 6 hour shift - outside,
who'd steal the toilets if they weren't bolted down and who, when
they quit just kinda don't show up?  Yeah, those kind of people.

How 'bout you, Alexis?  Sounds like you might have given, oh,
seconds of notice when you "walked out".  You bitch about how you've
been treated but it'll never occur on you that the reason your boss
treated you the way he did is because you likely behaved just
exactly like all those who preceded you.  What, you think you're the
first person to just walk out?  The first person to discover that
there's nothing other than your conscience and character keeping you
from just walking out?  The reality is you simply fit the
stereotype.  I'm still the eternal optimist so I still think the
next employee will be different but the reality is it's like it is
scripted.

It may come as a revelation to you but we bosses really don't like
having to treat our employees like children.  I'd lots rather never
have to correct an employee's behavior.  Unfortunately that's
impossible.  What I can't understand is WHY y'all virtually demand
having the boss on your a** by virtue of your behavior.  Actually I
can, merely by looking at the life choices my employees typically
make.  I'd do a double-back flip if I ever found a waitress who
hadn't calved at least a couple of bastards, oops, I mean fatherless
kids, by the time they quit high school.  With personal
decision-making like that, how can I expect them to take job
responsibility?

While we're swapping horror stories, let me ask a question I've
always wondered about.  Why is it that when a prospective employee
has interviewed the second time, has accepted the job offer and is
put on the schedule, about 8 out of 10 times that person never shows
up.  Why would anyone go to all the trouble of putting in an
application and then come back for 2 different interviews, only not
to show up?

And why, when the want-ad says "apply in person - NO CALLS" will a
candidate call during the lunch rush hour to chat about the
position?  And why will someone show up for an interview at our
casual family restaurant dressed like a hooker and smelling like she
missed her weekly bath and then complain when we decline to waste
our time on the interview?

So many questions, so little time.

I've been keeping a diary of my employee experiences with a view
toward writing a book on the subject.  But as I look back over it I
realize that no one not in the restaurant management business would
possibly believe all this stuff.  But it has to be true because not
in my wildest imagination I could I make up fiction as crazy as my
diary.

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: Brutal Management and sorry employees
Date: Mon, 16 Aug 1999 05:36:39 EDT
Newsgroups: rec.food.restaurants

StiffMeNot wrote:
> 
> >John De Armond
> >johngdSPAMNOT@bellsouth.net
> >John G's BBQ Restaurant
> 
> Remind me never to eat at John G's BBQ Restaurant.  

I'm so wounded!  I was so counting on your business to pay the light
bill this month.

>I might get caned by John
> for not raising my left arm when he walks by.  I'm sorry, but you suck as a
> manager if that's how you think of your employees.  Stop treating them like
> dirt.  I hope all your employees walk out at once and you're forced out of
> business.  You make me vomit.

Oh, such a childish view of things.  Actually I have a waiting list
of prospective employees because I pay about the highest wages of
any restaurant in town, servers make good tips and I offer good
benefits.  As for walking out, who cares? I've fired the whole crew
on two occasions and had a new crew by opening time the next
morning.  Having previously owned a nuclear engineering company
where I managed exclusively professionals, the restaurant worker
situation really ripped me the first couple of years.  But now that
I've learned to deal with the class of people available as
prospective employees, no big deal.  

John

-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Re: Brutal Management and sorry employees
Date: Mon, 16 Aug 1999 05:51:52 EDT
Newsgroups: rec.food.restaurants

Randie Feil wrote:
 
> So when you were inexperienced, nobody ever took you aside and told
> you how to improve your work methods?  You needed no training?  

Frankly, no.  but I know I was unusual in that regard.  But this
issue here is not about training.  It's about slacking.  When I was
an employee, I was happiest when I was given a job to do and then
allowed to do it.  I *hated* to be birddogged.  For example, if I
was the utility worker in my restaurant and knew that several cases
of baking potatoes had to be washed and stacked on the line before
every meal period, I'd just do it.  I'd not have to be told the same
damn thing every day.  I think a lot of people feed on abuse in the
workplace.  I was told that by a friend who is the president of a
large baked goods factory in town and at the time I didn't believe
him.  Now I do.  

> What
> makes a great employee is not somebody who never needs correction, it's
> someone who learns quickly, is honest, likes people, dresses properly
> for the job, and most of all, has a great attitude.
> 
> : While we're swapping horror stories, let me ask a question I've
> : always wondered about.  Why is it that when a prospective employee
> : has interviewed the second time, has accepted the job offer and is
> : put on the schedule, about 8 out of 10 times that person never shows
> : up.  Why would anyone go to all the trouble of putting in an
> : application and then come back for 2 different interviews, only not
> : to show up?
> 
> : John
> 
> Do you check references?  Ask for full resumes, not just forms to
> be filled out?

You're kidding, right?  Perhaps it's different where you are but
here it's a challenge to get someone to be able to fill in name,
address and phone number (in the unlikely chance they have one) and
where they've worked without assistance.  This isn't a college town
with a bunch of starving students in the employee pool.  Nor is it
yuppieville with a bunch of bored but educated housewives wanting to
waitress like it was in Atlanta. Cleveland's an old mill town on the
edge of Appalachia. Tennessee isn't rated 48th in the nation in
education for nothing.

John


-- 
John De Armond
johngdSPAMNOT@bellsouth.net
John G's BBQ Restaurant
Cleveland, TN

From: Neon John <johngdNOSPAM@bellsouth.net>
Subject: Mega-stores and Restaurants (was Re: Walmart - Please Read)
Date: Wed, 10 Nov 1999 02:14:04 EST
Newsgroups: rec.outdoors.rv-travel

Gary wrote:
> 
> Chris Bryant <bryantrv@totcon.com> wrote in message

> >
> > And, I'm sorry, but I think that Restraunt business and retail
> > a very different.
> 
> Not as much difference as you might think..  Who do you think will get the
> best price from Coke?  John who buys it either by the can or by the
> refillable container or Mcdonalds who hook up a hose to the side of the
> store and pump it in from the delivery truck, at the same time they are
> delivering half a truck load of hamburger buns... all this stuff is sold at
> a big volume discount and I bet the price is less than John pays.

You're right, Gary.  The trade press reports that McD's food cost
runs about 27% of sales.  Using every trick in the book, I'm lucky
to keep my food cost below 45%.  I know - because I've researched it
- that when I get large enough to buy a reefer truck full of pork at
one time, my food costs will drop to more in line with Mickydee's. 
Until then, I have to figure other ways to make the profit.
 
> I don't think trying to fight the mega-store is near as important as
> learning to co-exist with one... 

True.  If I tried to sell a cardboard 99 cent burger with "special"
sauce, Mickydee would eat me alive.  I sell a relatively specialty
product (BBQ) and so we co-exist nicely.

>I see quite a few ( i assume small
> business) people in Costco stores buying all sorts of  restaurant .. I am
> assuming they can get it there cheaper than they are going to get it from
> normal distribution means..

Again, correct.  One of the great myths is that restaurants get some
really special "wholesale" price on food.  Food is a commodity. 
Pricing varies only with volume.  Many of my ingredients cost MORE
than from the grocery store because they are delivered to my
restaurant.  I run a truck to Sam's at least twice a month to stock
up on things that are cheaper from there than from my purveyors.

Regarding selling to a mega-store, I have a friend who owns a
company whose only customer is Home Depot.  They struggled for years
before Home Depot found them.  I once asked him if he didn't fear
having only one customer.  His answer was "hell no!"  He noted that
he's making 10X the money he was making trying to sell through
distributors and that if HD cuts him off tomorrow, he will have
already profited more than had he spent a lifetime working in his
previous business model.  Point taken.

John


-- 
John De Armond
johngdSPAMNOT@bellsouth.net
http://neonjohn.4mg.com
Neon John's Custom Neon
Cleveland, TN
"Bendin' Glass 'n Passin' Gas"

Index Home About