How to Analyze Restaurant Financial Statements
And identify growth opportunities. Restaurant financial statements are an untapped source of potential growth. After all, they are made up of data, and you can use data to drive improvement. How do you determine which data to look for to optimize your statements? You can’t always predict which future events will impact your revenue and expenses. That said, you can eliminate recurring problems by spotting and then resolving pain points. To do this, you’ll need to follow a similar procedure to the one we described for identifying growth opportunities—only instead of looking for potential, you’re looking for problems that keep cropping up. Data is always important, and what’s also essential is looking at emerging patterns in your industry and in consumer behavior. If everyone else is going cashless, for example, you don’t want to be the only restaurant still asking customers to pay with notes and coins. Your restaurant financial statements are immensely useful, for staying on top of your finances and continuing to grow as a business. The better their overall quality, the more easily you’ll be able to pinpoint ways to build and scale your venture.
What Do Guests Think About Dynamic Pricing?
Consumer sentiment on dynamic pricing is overwhelmingly negative. Dynamic pricing would add friction to the guest experience, according to Capterra’s 2023 Dynamic Pricing in Restaurants. Sixty-five percent of consumers say dynamic pricing would make the decision of where and when to eat more difficult; 63 percent say it would make it harder to budget their restaurant spending. The research indicates consumer sentiment on dynamic pricing is overwhelmingly negative, and that most customers are unlikely to utilize it in a way that benefits restaurants. Just 34 percent of consumers think dynamic pricing is good for customers, and 42 percent would order less frequently, if at all, from a preferred restaurant if it began using the technology. The survey of more than 900 U.S. consumers also found that:
- Customers are attentive and sensitive to menu prices: 81 percent of consumers check menu prices always or often before they choose where to eat, and 51 percent have stopped patronizing a preferred restaurant due to recent price increases.
- Consumers need strong incentives to participate in dynamic pricing: Most consumers would be incentivized to order outside of peak hours from a preferred restaurant only if discounts exceed 10 percent off the original price.
Negative Reviews are on the Rise
How to rebuild trust in 2023. While they can be a tough pill to swallow, negative reviews should be seen as an opportunity to connect with customers. Peer restaurant reviews arguably play one of the most critical roles in purchasing decisions; in fact, 90 percent of consumers read online reviews before visiting a business and 88 percent trust them as much as a personal recommendation. Ten years ago, it was common to visit a businesses’ website to find little to no reviews, but now more than ever, consumers view peer reviews as a trusted source of information before making a decision to visit any quick service restaurant or bar. That said, almost three-quarters (71 percent) of U.S. consumers agree that a good Trustpilot score makes them more likely to buy from a brand or service. As consumers tighten their wallets with inflation trending upwards, ordering to-go and an evening dining out are on the chopping block. The customer experience needs to completely impress for consumers to make the decision to spend money on “extras.” It is also largely built on trust between the customer and the business. To better understand what is driving consumers to spend on the restaurant and bar sector, businesses must first analyze online reviews data, pinpoint the trends within that data, and finally, evaluate the changes that need to be implemented to create a stellar experience.
How Restaurants Can Turn Healthcare Benefits into a Strength
Changes need to be made. Employers in the quick-service world have been erroneously told they have to operate from a position of weakness when it comes to employee healthcare benefits. Employers have been led down paths centered more on ACA compliance with a focus mostly on FT employees, instead of solutions fitting the needs of the quick-service industry, where you have a much higher percentage of part-time (PT) employees. It is the PT employee population where most openings exist, turnover is the highest, and recruiting is the most difficult. Fortunately, both FT and PT employees can be addressed with robust, and more than cost effective solutions. Viable and vetted programs exist, accomplishing positive results on their own. The “wow factor” happens when they are bundled together as a turnkey solution. Immediately, employers can compete for employees, including the ability to offer part-time or variable hour employees a pathway to affordable and portable health care. Employers dramatically reduce costs, while improving their offering. Employees will have options to improve coverage, and it will cost much less. In many cases, employees working for quick-service, the cost will be $0, and include their families. Why is this possible? Three governmental regulations help drive this, with the newest being in place for two years.
Music Can Give the Restaurant Industry a Competitive Edge
Set the tone for customer dining experience. The restaurant industry is an increasingly competitive market. And more restaurant owners are searching for ways to encourage repeat customers and successfully grow their businesses. One way to gain a competitive edge is with music – which is often overlooked. Music can help restaurants strengthen relationships with their customers and build loyalty. It’s no surprise that music has a powerful impact on our emotions and overall satisfaction with an experience. And satisfaction with an experience is what restaurant diners expect when visiting an establishment. Today, customers anticipate more than just delicious, high-quality food. They seek memorable experiences altogether – and brand-fit music is a key element. Every visit to a retail location is a potential music touchpoint— and restaurants are one of the most regularly visited locations. Consumers in the U.S. make more than 90 billion visits to businesses every year and a vast 79 percent notice the music being played, reinforcing that auditory is a vital piece of a brand’s sensory puzzle.
Is the Pizza Industry in Trouble or Normalizing
After a long pandemic? Pizza — the unofficial food of the COVID-19 pandemic — experienced an explosion of sales growth in 2020 and 2021 as the go-to delivery food of choice. But what goes up, must come down and by 2023, two of the pizza industry giants — Domino’s and Papa Johns — are now struggling with faltering traffic and sales. At the end of 2022, both Papa John’s and Domino’s reported just-barely-positive same-store sales (around 1% each), with negative traffic boosted mainly by increased menu prices. With tales of food inflation woes, delivery driver shortages, and lack of demand as people head back to dine-in restaurants, the pizza high has come back down to Earth. But does this spell trouble for the pizza industry in the long-run, or is it just a normalization after a period of unusual activity? At the end of 2022, both Papa John’s and Domino’s reported just-barely-positive same-store sales (around 1% each), with negative traffic boosted mainly by increased menu prices. With tales of food inflation woes, delivery driver shortages, and lack of demand as people head back to dine-in restaurants, the pizza high has come back down to Earth. But does this spell trouble for the pizza industry in the long-run, or is it just a normalization after a period of unusual activity?
Off-Premises Dining Will Continue to Help Restaurants Grow
In 2023. The takeout and delivery sales that helped many restaurants weather pandemic shutdowns will continue to play an important role in post-pandemic recovery, according to the National Restaurant Association’s 2023 State of the Industry report. The off-premises market “has and will continue to be important for growth in the industry,” Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association, said during a recent webinar about the report findings. Off-premises sales spiked in the early days of the pandemic and have remained elevated as consumers continue to seek convenient dining options for eating at home or on the go. Two-thirds (66%) of consumers say they are more likely to order takeout food from a restaurant than they were before the pandemic, and 55% say the same about delivery. More than half (55%) of all adults surveyed say purchasing takeout or delivery is essential to the way they live. This figure is even higher among younger demographics, with 64% of millennials and 60% of Generation Z adults saying the same. The growth of off-premises sales has touched every segment of the industry, from quick service to fine dining. “Looking at overall restaurant traffic, currently, about three-quarters of all restaurant traffic is off-premises.
Did You Know?
Mandated vacation time, bring-your-own to-go packages, a warning on service fees. A review of recent legislative and regulatory activity finds government officials eyeing a number of measures with implications for restaurants. Governing may be hampered at the national level by fierce partisanship on Capitol Hill, but there’s considerable sausage-making underway in a number of state and local jurisdictions. Here’s a look at four recent developments with strong implications for the restaurant business, along with an early glance at a workplace issue that is likely to pop up more and more among politicos at all levels.
Employee Tip
What to do if an ordered bottle of wine is bad. The first time I was handed a glass of corked wine, I had no idea anything was wrong with it. I was enrolled in a wine class and quietly terrified of saying the wrong thing. The other students promptly identified the flaw by its signature wet cardboard aroma, however, so I nodded along and quietly jotted their observations in my notebook. “There are varying levels of cork taint, and people’s perceptions of cork taint are also varied,” says Ryan Fillhardt, wine director and executive chef of Tasting House bistro in Los Gatos, California. While I am living proof that even the least sensitive tasters can learn to detect cork taint, I’m hardly alone in this struggle. Cork taint is often misidentified and, as a result, widely misunderstood.
Bielat Santore & Company – Restaurant Industry Alert
MAKE A CUSTOMER NOT A SALE!
Bielat Santore & Company came highly recommended by my father-in-law who was a banker. He had conducted business with the company for many years. When we decided to open our first restaurant we sought out the services of Bielat Santore & Company. They did such a good job locating, negotiating and finalizing that transaction, that we have purchased all of our restaurants from them. Seven in total! The firm is very professional at what they do. Their knowledge of the restaurant industry coupled with their ability to facilitate a real estate sale, lease or exchange and bring financing to the table through institutional lenders and private investors puts Bielat Santore & Company head and shoulders above the average commercial real estate agency. We will continue to engage their services and recommend the firm to others within the hospitality industry. Angelo DiCapua-Robert Webster, MJ’s Restaurant Group, NJ
Since 1978, the principals of Bielat Santore & Company, Barry Bielat and Richard Santore, have sold more restaurants and similar type properties in New Jersey than any other real estate company. Furthermore, the firm has secured in excess of $500,000,000 in financing to facilitate these transactions.
YES, WE WILL SELL YOUR RESTAURANT TOO!
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