Piccadilly Food Cost Succcess

This engagement with Piccadilly Cafeterias, a $160,000,000 company, was completed in October 2013. In April 2010, Piccadilly engaged Liuzza to initiate and lead a comprehensive food cost reduction program. In addition to the program’s design and its components, Liuzza worked closely with all levels of management to remove organizational impediments that inhibited the full development and success of the program.

By the end of the third year, cumulative savings totaled $4,305,000 and were at a running rate of over $2,000,000 annually. See below the Executive Summary, presented with permission, of a detailed report prepared for creditors.

Piccadilly Restaurants, LLC

Report on food Cost Savings / Cost Avoidance Initiative

Executive Summary

In April 2010, Piccadilly’s food cost was 29.4% of sales. Food cost per guest was $2.30, and the company’s cost of wholesale food ingredients averaged $0.95 per pound. Executive management believed the company had a significant opportunity to reduce food costs by 1% to 2% of sales—$1.0 to $2.0 million annually.

Senior management then embarked on a comprehensive and determined initiative to achieve or exceed this goal. This report outlines the steps taken and the corporate impact of this endeavor.

Had this program not occurred and its numerous components not implemented, then by June of 2013, commodity price inflation would have driven these costs to:

Food Cost as % of Sales – 33.58%
$ Food Cost per Guest – $2.64

For each twelve-month period since its beginning in May of 2010, the program has saved or avoided costs of $883,000 from May 2010 through April 2011, $1,291,000 from May 2011 through April 2012, and $1,541,000 for May 2012 through April 2013. And for May and June of 2013, the amount is $590,000.

The total estimated cost saved or avoided from May 2010 through June 2013 is $4,305,000. There are additional food cost programs to be implemented as the company enters Phase III of the Initiative.