Price spread audit: find the money hiding between your suppliers' quotes
A repeatable method for comparing real cost per unit across suppliers and ranking where the biggest euro opportunity sits.
Two suppliers quoting €3.80 and €4.15 for 'chicken breast' tells you almost nothing. One might be a 10 kg case of frozen fillets, the other a 5 kg tray of fresh ones. In euros per finished kilo the picture changes — sometimes the expensive-looking quote is the cheap one, and a 9% headline gap can become 22% once delivery fees are counted. The audit forces those conversions onto one arguable page.
What counts as the same item
- Same cut and grade: 'chicken breast' covers fillet vs whole breast with wing bone; a €1.20/kg gap between different specs is not a spread.
- Same state: fresh vs frozen vs IQF carry different yields and water content — compare like with like or apply a stated yield factor.
- Same brand tier: house vs national brands differ 15–25% routinely; record which one each line is — swapping tiers is a menu decision, not a purchasing win.
- Same unit basis: pick one canonical unit per category (€/kg proteins, €/litre oils, €/each produce cases) and convert every line to it before comparing.
Ranking the olive-oil spread
A bistro buys olive oil from its main distributor and occasionally a cash-and-carry. Ninety days of invoices show three pack formats and a delivery fee on smaller orders.
| Distributor, 5 L tin | €38.50 → €7.70/L | Standard order, no fee |
|---|---|---|
| Distributor, 3×1 L | €27.90 → €9.30/L | Split-case convenience markup |
| Cash-and-carry, 5 L tin | €34.00 → €6.80/L plus €12 delivery | Cheaper per litre until the fee is spread over 5 L |
On 400 litres a year, sticking to the 5 L tin instead of drifting between formats is worth roughly €700–€900 annually — the largest single-line spread in this audit.
Running the audit
- 1Extract 90 days of lines. Pull every invoice line for your top 30 items: date, supplier, description, pack size, quantity, net price. Ninety days smooths one-off promotions.
- 2Normalize to one unit. Convert every line to cost per kilo, litre, or each at the invoiced pack size, not the catalogue one. Flag lines where invoiced size differs from ordered.
- 3Compute the spread and add hidden costs. Per item, highest minus lowest effective price per unit. Add delivery fees, fuel surcharges, and split-case fees to the line they caused; note any missed early-payment discount.
- 4Rank by annual euros and act. Multiply each per-unit spread by annualized volume and sort descending. Take the top five to suppliers as negotiation material; fix internal ordering habits (wrong packs, split orders) yourself that week.
FAQ
- How often should I run a price spread audit?
- Quarterly for the full top-30 list, monthly for the ten highest-volume items. Prices drift quietly; an item cheapest in March can be 8% above market by September unless you refresh the comparison.
- Isn't the cheapest supplier always the right answer?
- No. It measures price, not reliability, quality consistency, or credit terms. A supplier €0.30/kg cheaper who misses one delivery in five costs more than the spread once you buy retail replacements. Use it to open negotiations, not end relationships automatically.
- Where do hidden markups usually hide?
- Delivery and fuel surcharges, small-order or split-case fees, 'environmental' packaging levies, quotes assuming a payment term you never hit. On small orders these add 5–12% — exactly the size of most genuine spreads.
- My invoices are PDFs from five suppliers in different formats. Is this realistic?
- It is the normal starting point. Extraction is mechanical but tedious — restaurants that automate invoice capture keep the audit current; those doing it by hand let it lapse. The first pass takes an afternoon and pays for itself if one spread gets closed.
Keep reading
- Compare prices across the suppliers you already use
A fair comparison framework for recurring restaurant products and current suppliers.
- Normalize pack sizes so your numbers tell the truth
Convert cases, formats and units to a common basis before comparing prices or costs.
- Negotiate supplier prices with data instead of complaints
A practical negotiation script for restaurant suppliers: prepare numbers, present them, close terms.
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