The Challenge:

Waterbar and Epic Roasthouse are two of the newest restaurants from San Francisco restaurateur Pat Kuleto and business partner Pete Sittnick. The two restaurants opened in January of 2008 and immediately had large success from the excitement that had built around the 4 year renovation of the historic waterfront location. Waterbar features the freshest sustainable seafood available, while Epic Roasthouse offers contemporary cooking techniques on traditional steakhouse ingredients, but the common thread is their spectacular views of the Bay Bridge and San Francisco waterfront.

Pete Sittnick has spent the last 25 years in the Bay Area restaurant industry. Most recently, he has partnered with Pat Kuleto to develop Waterbar and Epic Roasthouse restaurants, which began in 2004.

When the restaurants opened in early 2008, they were essentially dealing with limitless demand. Their business focus was on hiring the staff needed to provide the ideal guest experience and offerings they wanted with the high demand they had. Then the recession hit at the end of 2008 and they saw almost a 20% drop in business. With this change in business volume and change in guest spending behavior, Kuleto and Sittnick had to be a lot more conscientious of prime costs, specifically labor.

Time to Take Action:

Pete had been using Avero since opening the two restaurants in 2008, and had been leveraging the communication and menu analysis solutions primarily. When he was faced with the need to better manage labor, he turned to Avero’s labor solutions. He tackled labor costs in 3 ways:

1) Monitor daily punches to eliminate overtime. One of the best features of Avero is timely and easy access to all of your business’ performance. Pete leverages the time clock and labor summary report to proactively manage overtime from accruing. Each day Pete and his managers review Avero’s labor summary report to see how labor is trending for the week. If it appears to be higher or lower than expected, he can easily drill down to the next level of detail and see which department or individual is causing the discrepancy. Often, it is simply employees who have forgotten to clock out, but by monitoring labor closely, the edits can be made daily so that no unnecessary expenses are accrued.

2) Benchmark internally to set goals.  Outside of daily monitoring of labor, Pete is able to use the group tools to compare labor performance side by side and push each outlet to improve. Epic Roasthouse and Waterbar have almost the same number of seats and similar staffing demands. While no two operations are identical, Pete can look at the volume done in food and beverage sales as each location and compare that to the labor staffed to see where efficiencies could be improved. He has been able to create internal benchmarks and continue to improve as he sees what the optimal staffing is for each location and how that fluctuates throughout the year.

3) Empower managers to increase accountability. Pete holds his team accountable for managing labor costs in each of the restaurants. He has helped set goals through benchmarking, and he has standard metrics they review on a daily, weekly and bi-weekly basis using Avero’s dynamic saved reports. The kitchen managers manage the BOH labor and the GMs manage the FOH labor to ensure every part of the operation is controlled. Avero’s labor solutions make it easy for Pete’s team to get the insights they need and own their restaurant’s success.

The Bottom Line:

Pete believes “if you are going to manage your P&L, you cannot wait for the end of the period and then review, because it just perpetuates inefficiencies. You would already be halfway through the next period before you made a change.” Avero gives you the insights you need when you need them to improve your business. By leveraging Avero’s labor solutions, Pete sees about a 50 basis points in labor savings across both restaurants, which is about $100,000 labor dollars a year. This is not just a savings he has seen once though, his team has continued to see the benefits in labor savings for over 5 years.


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