The restaurant business is a fickle one, profits are low, but food waste and cost margins are high. It cuts straight into profits even more with an All -You-Can-Eat Buffet type restaurant. How do they do it and still make enough money to survive and stay open. Here are some amazing facts on how All-You-Can-Eat Buffets make their money.
10. A Cheap Eat
To understand the ins and outs of buffet style eating, we need to understand its origins. The term ‘buffet’ comes from the French term meaning “sideboard’, a piece of furniture that was used to lay out food for quick picking. The concept arose in Mid-17th century France. When visitors would show up without warning, the kitchen staff would gather up whatever food was in the cold room and place it on the side board for a quick snack. The Swedes took it to one step further in the 20th century with the invention of the ‘smorgasbord’ basically the same principle but on a larger scale. It was exhibited for the first time in 1939 at the New York World’s Fair. The ‘all-you-can-eat’ tagline was invented and popularized in Las Vegas, by entertainment manager Herbert Cobb McDonald, who introduced the idea in 1956 at the El Rancho Casino at the Buckaroo Buffet. Next thing you knew, everyone loved Buffet style eating. It was cheap and you could eat as much as you wanted. For the restaurants, it saved them loads of money on staffing and food costs, and it was also a profitable way to lure customers with cheap eats.
9. Strategic Lay-out
Another way all-you-can-eat buffets make money is by its strategic layout. At the front of the buffet, certain items that are considered fillers or starchy foods are placed first, dishes which include meat are usually found further down the buffet line. This is done on purpose, so you can fill up on more of the filler items. Fillers are items such as bread, potatoes, rice and pastas. By the time you reach the end of the line, your plate is already brimming with starchy fillers that will fill you up within twenty minutes into your meal. Since your plate is already pretty full, by the time you reach you the meat dishes, you will probably take less. This is no coincidence; this is purposefully done because the meats are more expensive to purchase. Less consumption means more profit for the restaurant. Since their profit on food is already fairly small, they can’t turn a big profit on a buffet diner with expensive food items and prime cuts of meat. Fillers can be bought in bulk and used in large quantities at a fraction of the cost, increasing the bottom line.
8. Seasonal Menu Changes
Most restaurants tend to change their menus based on seasonal produce. This is not only done so you can enjoy a variety of items, but because produce is usually sold at cheaper prices when in season. During summer months regional local produce is in abundance and is more cost friendly. You will notice how most restaurant buffets have tons of vegetables and salads in their buffets during the summer months. This is done to maximize on their profits and save on expenses. They also collect data on what customers like eating, during seasonal peak periods. They then adjust their menus based on what is popular and how much quantities are required. For example, salads are in higher demand in January, and fish is more popular on weekends. Vegetables are also purchased in bulk for virtually pennies. Frozen vegetables, like carrots, potatoes, green beans, corn, and peas, are even cheaper and used in a variety of dishes no matter the time of year. If not consumed, they are recycled to make soups and casseroles for the next day. So next time you are at a buffet, count the amount of vegetable dishes they actually have.
7. Monitoring Food Waste like Big Brother
There is a whole psychology behind the monitoring of food waste when it comes to the restaurant business and buffets are no exception. These days with advanced computer technology, restaurants are able to keep tabs on what their clientele are eating and how much is being consumed. They keep tabs on popular dishes, which dishes generate more money, which are more cost efficient and which dishes are duds. They are constantly tweaking and customizing their menus to maximize profits and reduce waste. Food waste is also closely monitored. Buffet Restaurants try to do their best to estimate just how much food each patron eats, they are always watching. There’s still a lot of food that goes into the garbage. People seem to take more than required and then half way through their meal decide they want something different than what they have. They go back for seconds, leaving half full plates on the tables for the waiters to pick up. Some restaurants have started charging for leftovers to avoid this.
6. Small Portion Sizes
Another way All-you-can-Eat Buffets make money is by limiting large food intake of expensive items by using portion control. This may not stop you from going to the buffet a few times, but unknowingly they are limiting your portions. Call it a trick, but you may have noticed that the soup bowls, plates and utensils are usually smaller in size. The dishware manufacturers that make dishes for Buffet restaurants have a special line called, “Half Size”. If you haven’t noticed yet, take a closer look next time you’re eating at your favorite buffet. This means you’re eating half of what you normally eat. Also, they use bigger spoons in the inexpensive filler sections where you can pack up on rice and potatoes. Tongs, spatulas and serving forks are relegated to the more expensive items like chicken, meats and fish and are geared toward moving less quantities of food to your plate. The size of chafing dishes also plays on your sub-conscience, they are also smaller in size. If there’s only a few pieces of food left in them, we are less inclined to take more, especially if someone is behind us in line. What we are more prone to do is go back and get more heaping spoonfuls of those starchy fillers, or settle for a lasagna with meat in it. The customer may be disappointed a little, but that won’t stop them from coming back as the customer leaves with a full belly. These methods lower costs and increase profits for the restaurant in the long run.
5. Large Iced Drinks
Whether it be alcohol, soda, or bottled water most buffets do not include beverages in the overall cost of the meal. Therefore, the cost of any beverages is added to the sum of the total. While the profit margin on food is around 35% tops for restaurants, for drinks it is as much as 90%. If you are a big drinker, sometimes the drinks on your tab can cost you almost as much as the meal itself. Also beware, buffet foods are highly salted and full of MSG, which make you extremely thirsty and likely to drink more. Furthermore, sodas in particular are then filled with loads of ice, which also dilutes and reduces the actual amount of soda you are paying for. So, you tend to finish up your drink faster and may want to order another. Because you are gorging on food, you will also drink more. For those big eaters, that means at least a couple of drinks per sitting adding anywhere from $5 to $10 dollars to your tab. It’s still a good deal, but it’s a moneymaker for the restaurants. Some buffets used to include the cost of drinks in their buffet price, but most have since stopped this practice, and for good reason (well at least for the restaurant owner).
4. Eliminating Cost for Staffing
Another way All-You-Can-Eat Buffets make money is by cutting down on overhead expenses. Since buffet food is prepared ahead of time in bulk or in large quantities, there is no need to have the same amount of staff working in the kitchen as would be required in a sit down restaurant. Buffet restaurants can also get away with using less service staff. There is no on the spot plating, and no need for a full kitchen ensemble. Buffet restaurants basically know how much staff is required during busy periods, and will hire accordingly. Also, buffets do not have famous chefs working in their kitchens, but rather cooks. They are usually led by an Executive Chef, who doesn’t necessarily need to be overqualified, since the food prep requires no presentation just layout. Further savings lie in the amount of wait staff hired. Because a buffet is self-serve, less waiters and servers are required. They also do not need to have much experience, as interactions with clientele is limited to getting drinks and clearing tables. Less experience means lower wages. Operating a buffet instead of a sit-down-and-order type restaurant also allows for a quicker turn over of tables, since diners aren’t waiting for food to arrive. That’s important during peak business hours, when lines for tables can turn into lost dollars.
3. Low Food Quality & Recycling
This may not come as a surprise, but another way All-You-Can-Eat buffets make money is by cutting down on quality and recycling food. Aside from getting good deals from their wholesalers on bulk seasonal produce, they also get deals on chicken, meat, and fish that are also bought on the cheap. The quality is not always prime top of the line. They might use lower grade cuts for the beef in a dish, chicken wings instead of chicken breasts, and bottom of the barrel fish. The leftovers are also used the next day in soup, casseroles, rice dishes and prepared salads. They need to have minimal waste in order to turn a profit. The price and cost of the food has been totally factored into their profit margin from the onset. Basically, they charge customers an amount that will cover their basic costs and more. If they don’t do this, they will eventually go out of business. Choosing the right menu items and putting out just the right amounts is not easy in a buffet environment. If the Executive Chef is experienced, he can keep food waste to a minimum by timing replenishments, using different ingredients at different times, lowering the cost for slower or quieter days and charging higher prices for special days and holidays thus maximizing their profits. Managers are meticulous about their stock-keeping. If too much of an item is prepared and sits in a chafing dish all evening, it’s money down the drain.
2. The Illusion Keep You Coming Back
They have you as soon as you get in line. Buffets are not an easy profit-making scheme. It takes the right menu, the right balance between cost and quality, and meticulous attention to operational details for these restaurants to succeed. It also takes a keen understanding of the psychology of dining. There is a love affair with All-You-Can-Eat buffets, even though there has been a decline in such restaurants in recent years. For kids it is the ability to play grown-up and select their own food, with big eaters it is making sure that they got their money’s worth. For some the buffet is a glamorous idea, it reunites family and friends, without any compromises, there is plenty for every taste bud. The joy of eating many different things at the same time is like an aphrodisiac. The industry banks on this and knows they have you hooked. You will keep coming back for more. Be wary though, some buffets are now actually charging more for the big eaters or those that simply excessively indulge, this way you can’t cut into their pocket books.
Buffets do manage to make good money, whether it be with cheap inexpensive quality food, less overhead, or whatever methods they are using at the given moment. The fact is that no one can really eat more than two pounds of food at once and not many people can eat two days worth of protein in one sitting, although there are some who can. There have been people who have been kicked out of buffets for eating too much. In 2004, a Utah couple following the Atkins diet was asked to leave a Chuck-a-Rama after going back to the carved roast beef station for the 12th time. In 2014, the restaurant chain Sizzler, which has since eliminated its buffet in many locations, did not use the term “all you can eat.” Instead, Sizzler used “all you care to eat” because it gives the impression that they are challenging you to over eat. Buffets took a real hit during the last recession and were one of the most bankrupted categories in the restaurant business. Buffet owners have caught on and have increased their prices and many are now charging more per person. If your markup is 33% and you have an average of 200 people, you are still turning a profit.