Hi everyone! It's been a long time since I posted - my computer's been offline sadly. Unfortunately my iPhone does not get alone with these forums :(
Anyway- after a decade of being just a meat cutter (or at times supervising) I've finally procured a job at my old stomping ground as their new Meat Manager. I'll be watching the meat and deli departments, but my primary focus right now is on meat. I'm only a couple days in but have spotted soooooo many areas which need improvement! I know I can get this meat shop profitable again. From what I understand, the profit margin here is only around 19-20% - they only want me to get it up to 25% as an immediate goal, but I know I can do much better than that!
What I was wondering was what were the numbers at your average store? What percent profit do you aim for just in the raw meat section? I know I can hit higher numbers in packaged meat and deli, but the steaks and such I mean.
Shrink is usually the culprit in low gross margins- so you need to create systems- systems to avoid shrink and systems what to do with shrink
are you in an independent or chain store??? - with independent stores you have more flexibility
are you in a high volume store?
most meat depts. target 30-35% gross margins-however , many variables-aggressive ads, agressive competitions, and if im leasing a high end retail market for 15-18.00 a squ foot, I need higher margins
One key in the raw/fresh meat section is to develop "sale item profit strategies" the ad is filled with loss-leaders to bring customers in the store-its up to us to capture more margins at point of sale
so, before the ad breaks- you call a quick 5 minutes with the cutters or whole crew and ask- "bnls pork chops are the lead feature , where are we going to make more profits"???? bring up all the lead primals on sale and solicit suggestions for profits can be marinades/stuffings thin-sliced, etc.
YOU NEED TO SIGN ALL THESE PROFITABLE ITEMS
more than half your customers dont see the ad-so when you set up your case-feature the "profitable items" in the best selling area in the case- the cherry pickers will find the loss leaders
low grossing departments usually have a high sale item penetration ratio for ex. if i approach a meatcase, and all i see is sale items siganage -you are just attracting attention to low margin items you are training your customers to shop the specials only-to cherry pick thats why we need many signs on the case-larger signs on the profit items
if bnls pork chops are a lead sale item id consider: thin-sliced pork chops -upcharge .20lb) stuffed pork chops-upcharge over 1.00lb stuffed pork roast-upcharge 1.00lb marinated bnls pork chops marinated pork tips pork stir-fry pork kabobs pork florentine combo packs teriyaki pork strips (on a skewer)
Thanks for the reply! A lot of great information there - much of it matches up with ideas in my head but I hadnt thought about certain things in detail, though I will be now! :)
Take care of that deli as much as you would the meat department. Utilize it as much as possible. You can very easily use product from the meat shop that is close dated or needs move through the deli department. For example if you have some rumps turning on you, cook that stuff up and sell italian beef. Depending on what type of deli we are talking about here.
Kevinjrs has some great advice- the higher grossing meat departments im seeing today are cooking everyday- chain stores, most wont let you-but in independents, you can cook chicken and pork to deter shrink-keep your meat department label on the package to get sales and margin credit- much better than transfers. Its funny, I've got some old-school veteran meatcutters that love to cook everyday-they see the power in this-not reducing the product in fact, they will bring in extra product, just to cook,(chicken drums/thighs/split breasts) place in hot food warmers next to rotiserrie chickens, or sell out of cold case.
Many meat cutters will avoid cooking-extra time and effort and deli dept. are teritorial, but again, it can be the difference of 15-18k gross a year
simple math- say a meat department does 20 k a week, that's 1 million yearly the meat dept. targeted budget gross is 29%, but it's now operating at 25%, thats a difference of 4% or 40,000, you start cooking, you can gain 2-3% in a hurry
This is just my two-cents Ideally, you have systems in place to minimize shrink and you dont have to cook-however, todays shopper is different than 30 yrs ago-many will buy high protein quick meals- cooked chicken parts and ribs can sell everyday, even if cold, and if meat department is pricing the product-it's much more sellable than deli's trying to get 60% margins for cooked product
MainMeatMan - It's a small independent store so I can pretty much do whatever I please with my product ... we have a rotisserie, but also have access to the bakery's convection oven when they're done for the day - I can see myself cooking a ton of product!
