What We Can Learn from Katz's Deli Business Strategy

Slate magazine just published an interesting look at the economics of Katz’s, the beloved New York deli that’s been slinging pastrami-packed sandwiches since 1888. At the turn of the 20th century, these (worth-it) calorie bombs were profitable, thanks in part to the perception of brisket and belly meat (what Katz’s uses in its pastrami) as cheap trash cuts. But now, skyrocketing meat prices have made its margins paltry.

So how does Katz’s stay in business? Turns out that one of the main reasons is side orders. “If all I did was sell sandwiches, I couldn’t pay the staff,” owner Jake Dell says in the article. He says things like latkes, coleslaw, and potato salad are the most profitable items.

This just illustrates how powerful it is to understand where your sales are coming from. Square Point of Sale’s analytics feature can give you a gauge on this — showing you which items are flying off the shelf and which items are underselling. Using these insights, you can figure out what you need to stock up on, or perhaps in the case of Katz’s, mark up.

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Sign in to your Square dashboard to get some intel. And if you’re in New York, you gotta have one of those sandwiches. You can even order one for delivery on Caviar.

Photo credit: Katz’s Deli, Tam, Flickr, CC by SA 2.0