📈 Increasing Margins: 🤯 The Results (so far)
💬 In This Post: Average Ticket Price Analysis... Increase in costs, tightening margins... Plenty of charts
Part 1
Tuckedito
💬 In This Post:
- Average Ticket Price Analysis
- Increase in costs, tightening margins
- Plenty of charts
🏷 Our Ticket Price
Ticket price is how much a customer spends with us. Below we have the average ticket price at the time of our last "Margins Update" and the current, followed by a chart that shows the swings along the way.
Average Ticket Price
As of 3/27/22: $14.89
As of 6/10/22: $15.61
10-Day Moving Average Ticket Price
As of 3/27/22: $16.13
As of 6/10/22: $16.90
The trend line (in green), is set at the $14.89 average ticket price. So, as we can see, there is a slight trend up.
We see some large swings up and down. Usually this festivals with a number of other food vendors average ticket is down. Family events average ticket goes way up.
What can we do to raise this?
- Higher priced items. We're thinking about adding some items higher priced items as "special menu items", to test this out before committing to putting them on the menu full time.
- Combos. We could add meals (ie. two taquitos and a side of beans and rice for $15). People would likely get this in place of the 3 taquito basket deal so it wouldn't raise the average ticket price, but the sides are cheaper to make so it would increase our margins.
Gross Sales Per Event
Higher Gross profit per month. This is a nice trend. It'll be interesting to see how much this levels off by the Fall.
Our Tightening Margins Per Taquito Margin on each taquito flavor 10/21 vs 3/22 vs 6/10
*** This is strictly the food cost. This does not including packaging, labor, fixed costs, etc.
Even after raising our prices, since our costs have increased so drastically over the past 3 months, our margins have not widened.
Times are tough right now with inflation (the most recent CPI print has inflation running at 8.6%, 10.3% on food.) Our chicken price increased 50% over the last couple months.
So we battle with what our solution should be. Are we comfortable with our margins tightening a bit, or should we raise our prices 3%? (3% is the rate of inflation since we last looked at our prices in March)
High Level Gross Profit Margin
We've seen greater profits, selling out more often.
We're also dialing in our production forecast, limiting our waste.
What did we do wrong in January and March?
We'll have to dig in and see if we did anything wrong that we could change to prevent those margins from slipping so much next year.
Conclusion
We're managing our business better and increasing profit, but inflation is running hot, driving up our prices. Our margins still look wide enough, but at what point do we make a change in our prices or change our price structure all together (ie. removing the basket discount or making the minimum order 2 taquitos.)