Rising costs are a reality for restaurant operators, but cutting costs in restaurants doesn’t have to mean cutting corners or sacrificing quality. The smartest strategies don’t jump right to stripping things away, but rather seek out ways to achieve greater efficiency.
To dig into what works, I spoke with Back of House consultant Rachel Morgan about where restaurant operators may find savings while still maintaining high food and service standards.
When operators think about reducing restaurant operating costs, they often start by reviewing invoices and POS (point-of-sale) data. It makes sense to start with your POS data, but Rachel says there’s more to the story.
“Patterns in scheduling, prep, and ordering often tell a clearer story,” she says. “It’s not always about cutting, but about tightening up what’s already in motion.”
One often-overlooked drain on margins is prep. Over-prepping for historically slow days or misportioning ingredients silently eats away at profits. “These are silent margin killers that add up quickly,” Rachel notes. Even small adjustments to prep lists can have a big impact.
From scheduling to inventory tracking, the right technology improves efficiency in restaurants and helps you work leaner. “Scheduling tools for labor forecasting, like Push Operations and 7shifts, take the guesswork out of staffing by using your sales data to forecast shifts,” Rachel says.
On the inventory side, she recommends systems with recipe management features to control food costs and maintain consistency. “One standout option is opsi,” she says. “It combines recipe management, real-time costing, inventory control, invoice processing, and digital prep lists in one accessible system.”
For operators just starting with cost tracking, Rachel says you don’t have to wait for fancy software. “If you’re not tracking anything yet, start with a Google Sheet. It’s free and surprisingly effective. Simple tracking is better than none, and it builds the habit of paying attention to what matters.”
Labor is one of the biggest expenses for restaurants, but smart scheduling brings costs down without compromising guest experience.
“Use your POS sales data to align staffing with actual demand,” Rachel advises. “It helps avoid overstaffing without compromising service. And let your staff know! When team members see that scheduling is based on data, it builds trust and keeps morale steady.”
Predictive scheduling keeps labor aligned with demand, while cross-training offers flexibility during lean shifts or last-minute callouts. “Employees who spend more time training tend to stay longer, feel more invested, and be better positioned for growth,” she adds.
This approach reduces overtime, keeps service levels consistent, and creates a stronger, more adaptable team.
More than counting what’s in stock, inventory management involves seeing patterns and making informed decisions.
“You can’t lower your food costs if you don’t know what they are,” Rachel says. “With real-time tracking, you’re able to act in the moment instead of reacting after the fact. That kind of responsiveness helps reduce waste, tighten ordering, and improve margins.”
By catching issues — for example, a dish that’s costing more to produce than it’s priced for — before they snowball, you can make changes that help protect margins without affecting quality.
Savings don’t always mean finding a new supplier. Sometimes they come from better communication with the ones you already have.
“Just ask,” Rachel says. “Review your ordering patterns together. There may be alternative products, better pack sizes, or volume deals you’re missing. A quick conversation can uncover real savings, and your success is their success.”
Even a small adjustment in ordering frequency, case sizes, or delivery schedules can free up cash flow and reduce storage costs.
Reducing portion sizes lowers food costs without affecting guest perception, as long as it’s done thoughtfully. “Plates going back with food still on them is a clear sign of over-portioning,” Rachel explains.
“Evaluate where waste is happening and right-size your portions to align with actual consumption and your target margins. I’m not suggesting you cut dishes in half and keep prices the same — this is about aligning portions with reality.”
Rachel works with restaurant operators to change their perspective on cost control. “Cutting costs is often reactive and short-term,” she says. “Running leaner and smarter is proactive and long-term. It’s not just about spending less, it’s about spending better.”
That mindset also applies to staff communication. “Be transparent. Share the ‘why,’ invite ideas, and focus on protecting jobs and service quality,” she says. “When the team feels included, they’re more likely to support changes.”
If you do nothing else this month, Rachel recommends getting clear on your costs. “Understanding your numbers will do more for your bottom line in the long run than negotiating a better price on tomatoes,” she says. “It’s the foundation for making smarter, more sustainable decisions across the board.”
Ultimately, reducing restaurant operating costs isn’t about slashing budgets but about running smarter. From fine-tuning inventory management to aligning labor with real demand, these strategies help you boost cost savings without compromising service or quality.
The team at Back of House understands the challenges and the best tools and strategies for cutting costs in restaurants that are manageable and sustainable.
Book a consultation to get started. We’ll review your current operations and help you implement smart solutions that fit your goals and budget.