Ask the Business

Gross margin declined 1.3 points versus plan, from 69.7% to 68.4%. This represents approximately $42,600 in monthly profit impact across 7 affected locations.

Approximately 58% of the decline comes from higher mango, avocado, and dairy-mix purchase costs — Sysco invoices show a 7.2% average price increase since June. 27% comes from portion and recipe variance at seven locations — theoretical vs. actual usage is running 4.6% over at Fresno #1 and Bakersfield #2. The remaining 15% comes from delivery-channel mix — Houston Eastex delivery revenue now represents 34% of that location's sales, with third-party fees compressing margin to 41%.

Fresno #1 and Bakersfield #2 account for 41% of the total gap.

Fresno #1 is your most visible margin problem this month. Three compounding factors are at play:

1. Portion variance (primary driver — 52% of the gap): Theoretical vs. actual mango and strawberry usage is running 4.6% over standard. Last cycle count showed 23 units of mango pulp unaccounted for — likely over-portioning during peak hours. Manager Miguel hasn't completed the SOP 4.2 refresher (due July 15).

2. Ingredient cost spike (31%): Fresno #1's last three Sysco orders show avocado cost up 18.4% and mango pulp up 11.2% vs. prior contract. The purchasing manager has not submitted a price dispute, though the contract allows it.

3. Staffing inefficiency (17%): Two experienced closers left in June. Onboarding two new staff members has reduced throughput — sales per labor hour dropped from $42 to $36, increasing effective labor cost as a margin percentage.

Here is a 30-day recovery plan for Fresno #1. Estimated margin recovery: +2.8 pts (from 64.8% → 67.6%). Confidence: 87%.