Why restaurants get overcharged, even with a pricing agreement.

Every restaurant group has felt it. A new vendor comes in with pricing that beats the incumbent, the switch gets made, and for a few months food cost looks better. A year later, the savings are hard to find.

This isn’t bad luck. Vendors and operators want opposite things. The vendor’s job is to make as much as possible on the account; the operator’s job is to spend as little as possible. Pricing is where those goals meet, and the vendor has far more information about it than the operator does.

Winning the account, then profitizing it

The opening offer is usually real. What changes is everything that happens after it. Prices on high-volume items drift up a few cents a week. Allowances paid by manufacturers inflate the cost the markup is calculated on. Deals that were applied at the start quietly stop showing up on invoices.

A pricing agreement doesn’t stop it

Many groups don’t have a written agreement at all, and their prices move with whatever the vendor decides. But groups that do have one see the same pattern. An agreement fixes a markup; it doesn’t fix the cost underneath it, the fees around it, or whether the programs in it are honored.

Price creep. Small increases on items you buy every week, rarely large enough to question on any single invoice.

Money behind the line. Manufacturer allowances and earned income that raise the cost your markup is applied to, so the percentage stays the same while the price goes up.

Deals falling off. Deviations and contract pricing that apply at the start and disappear without notice.

What changes the outcome

Two things: knowing what good pricing looks like for the exact products you buy, and having a way to check every invoice against it. Angel benchmarks every product against what other groups pay through the Angel Index, uses that to negotiate, and then audits every invoice so the pricing holds.