NJRHA Statement on Liquor License System
The Association firmly stands behind and supports licensees. “The New Jersey Restaurant and Hospitality Association stands firmly behind our members whose establishments enhance our communities and downtowns by providing diverse dining experiences and award-winning dishes recognized nationally. We also support members who made the significant investment to secure a liquor license under the current system. Most restaurant owners who hold licenses are family-owned, small businesses whose livelihoods depend on the investment they made under the rules and regulations currently in place. Flooding the market with new licenses will instantly diminish the value of these licenses and financially devastate thousands of small business owners during an already challenging economic climate. The New Jersey Restaurant and Hospitality Association has and will continue to advocate on behalf of all of our members, including license holders, and has offered the following suggestions to improve the current liquor license system and promote small businesses and economic growth:
Restaurant Sales and Traffic Slowed in February
A sign of future challenges. As was expected, once the upward boost created by the easier comparisons due to Omicron started to fade in February, restaurant same-store sales and traffic growth started moderating back to where they were at the end of last year. Yes, February’s sales and traffic results still benefited from easier laps owing to the Covid spikes early in 2022, but at a magnitude much smaller than what we saw in January. Restaurant same-store sales grew 6.8% in February, down 7.3 percentage points compared to January’s year-over-year growth rate. Despite the drop in sales growth, industry performance was still much better than the sales growth of 4.8% reported for December of 2022. In the case of traffic, same-store growth was 0.4% in February, which represented a slowdown of 4.6 percentage points compared to the previous month’s results. Traffic growth has been positive for two straight months, something that has not happened since the end of 2021. This is far from being a sign of strength for the industry and more of a result of the favorable comparisons from what was hopefully Covid’s last big impact. Another expected shift in the industry is a softening in average guest check growth. As commodity and labor cost pressures start to ease, menu price increases and their effect on average guest checks are projected to moderate this year. Average check grew by only 6.5% year over year in February, the lowest it has been since February of 2021.
Is Market Volatility Ending?
Or just beginning? Less than 24 hours before Silicon Valley Bank failed, restaurant analysts at Revenue Management Solutions released our monthly impact report. At the time, we lauded stability. Our graphs of early 2022 quick-service restaurant traffic trends looked like a mountain range — a significant dip in performance followed by a steep climb, thanks to the appearance and ultimate retreat of the omicron variant. But in 2023, month-over-month trend lines have evened out. A week ago, we lauded a flat line (on a graph, that is). Now that Silicon Valley Bank has “flatlined,” will QSRs suffer? According to our Senior Vice President of Consulting Services, Richard Delvallée, the short answer is no. “Fallout from the Silicon Bank failure is unlikely to affect QSR performance trends,” he said in a conversation. “Consumers are reacting to a softening economy by buying fewer items per visit, but traffic has remained stable.” Delvallée said that QSRs might even see moderate improvement in traffic trends, thanks to some consumers “trading down” from other restaurant segments based on concerns about the risk of a recession and the impacts on future spending power. In the end, though, he “expects trends to remain similar.” “Similar” is good news for operators. After years of volatility, consumer behavior is stabilizing. So are supply chains. Brands might be able to plan again. The bad news? New, more stable habits may include fewer trips to QSRs and fewer items per trip. According to our February QSR trends:
What Restaurants Should Know About ACA Penalties
A risk review can help operators avoid significant penalties. The quick-service restaurant industry has the highest quit rate of 5.6 percent, according to 2022 data issued by the U.S. Bureau of Labor Statistics. In other words, the foodservice sector experiences the highest number of quits in a given month as a percent of its total employment compared to other industries. With new employees coming and going all the time, it can be especially difficult for restaurants to keep track of who is eligible for ACA health coverage and who isn’t. As such, this can create serious challenges for organizations managing their Affordable Care Act (ACA) Employer Mandate responsibilities. For these reasons, it’s no wonder restaurants are one of the industries at greatest risk of receiving penalties from the IRS. In fact, many organizations within this space have been hit with million-dollar ACA penalties from the IRS. Of course, organizations from other industries that experience high-turnover, such as construction, hospitality, manufacturing, and nonprofits – are also receiving IRS penalty notices. Due to the nature of the restaurant industry, however, it seems to be a repeat offender for ACA non-compliance, as far as the IRS is concerned. In addition to difficulties with employee retention, here’s why the restaurant industry is at greater risk of receiving ACA penalties:
The Secret To Great Customer Experiences
Automation. When people think about automation in foodservice, they often picture cold, indifferent efficiency—the last things any operator wants to provide in a great customer experience. In reality, automation brings valuable efficiency gains to labor-strapped operators while also helping them provide better customer service. It does so by saving time and energy for employees so they can focus more on what humans do best: making every guest feel welcome, ensuring the food is delicious and ultimately improving the overall experience by offering more ways for customers to engage with their restaurant and staff. A good example of this dual benefit is the use of digital ordering kiosks. They save time for employees at the counter by diverting some customers out of the line. This makes employees less stressed and busy, so they can serve more customers easily. At the same time, kiosks provide an easy shortcut for customers by letting them place their own orders without waiting in line. This improves order accuracy and even eases anxiety for customers who aren’t comfortable speaking loudly or who want a little privacy for upsizing their order. What about the customers who may be intimidated by technology? The kiosks still improve their experience because with shorter lines, their wait is shorter. The employee serving them can take a moment to greet them with a smile, be patient while taking their order and make their experience more enjoyable. Everyone wins.
How Restaurant Operators Can Make Sense of Fluctuating Energy Costs
Most restaurant operators are feeling the pinch. During the Restaurant Finance and Development Conference in November, a few operators were casually talking about their biggest challenges. Among the biggest? Energy prices. “Everyone is talking about food costs and labor costs, and for good reason, but nobody is talking about our crazy electric bill,” one operator told me. However, higher utility costs are, indeed, top of mind, and that was sufficiently reiterated during the most recent round of earnings calls; executives from McDonald’s, Shake Shack, Chipotle, Red Robin, The Cheesecake Factory, Potbelly and Jack in the Box all touched on the headwinds they’ve experienced from higher energy costs. Michael Bailen, Texas Roadhouse’s senior director of investor relations and financial analysis, called utilities a continued “pressure point.” According to the National Restaurant Association’s State of the Industry 2023 report, 80% of operators said their total utility costs were higher in 2022 versus 2019. This adds to a confluence of higher costs across the board, including food costs, which 92% of operators say is a “significant issue,” labor costs and occupancy costs. On average, utility outlays were up nearly 12% in 2022 versus 2019. On the West Coast, restaurants that use natural gas (nearly 80%) have been grappling with a 32% price increase since December.
How to Reduce Restaurant Labor Costs
Without Sacrificing efficiency and service. Running a restaurant isn’t cheap. At the same time that minimum wage is creeping up, inflation is affecting food prices. Restaurant owners must be smart and creative to reduce labor costs while still creating an excellent customer experience. A survey of American consumers found that despite rising food costs, 58 percent went out to eat more frequently in 2022 compared to the year prior. That’s good news for restaurants struggling to make rent amid widespread labor shortages and skyrocketing inflation. However, it doesn’t mean restaurant owners can depend entirely on having more customers. Cutting down on labor costs is a crucial aspect of thriving during periods of economic turmoil. Perhaps the most important factor when trying to reduce labor costs is paying attention to scheduling. Managers must ensure they aren’t bringing in too many people for one shift, because that leads to overspending on labor. It also means tips will be spread more thinly between bartenders and servers. Instead of guessing how many people to schedule per shift, managers should first determine how much money the restaurant earns on its busiest days. Scheduling software makes this easy. They can then compare this number to how much they earn on their slowest days to look for patterns.
Did You Know?
How to use security to keep your restaurant safe for customers. Unruly customers and violence can ruin a bar’s reputation. When a restaurant gets mentioned in the news due to fights or constantly having police called to the location for physical altercations, its demise is usually right around the corner. A restaurant with an atmosphere of fear surrounding it makes it difficult to keep the business running smoothly. Guests will stay away from the establishment, which in turn makes it hard to keep revenue coming in. While it is impossible to prevent all altercations from happening, it is possible to minimize these situations with well-trained security measures. Having worked in law enforcement for over 25 years and in the security industry, here are some proven ways to keep your restaurant safe.
Handheld devices race into the full-service restaurant world. Handheld devices crossed category lines as COVID cracked wide a world of digital adoption, bringing a tech-centric spin on service into an experiential-driven segment. But are they improving customer experience at sit-down restaurants? The companies behind them contend handhelds enable servers to turn over tables 20 percent faster and, in turn, boost revenue by 15–20 percent. Moreover, food gets to the guest three to five minutes faster, ensuring freshness and satisfaction. Since some devices are left at the table, guests can check out on their own clock. When servers carry handhelds, they can be pinged on demand, from guests and the kitchen.
Bielat Santore & Company – Restaurant Industry Alert
BIELAT SANTORE & COMPANY SELLS HAMILTON, NJ RESTAURANT!
Palermo’s of Hamilton, a popular, casual Italian Restaurant located in a residential neighborhood of Hamilton Township, Mercer County, New Jersey, has recently sold according to Robert Gillis, sales agent for Bielat Santore & Company. One of the original “Palermo’s”, known for its signature, old fashioned “tomato pies” along with other traditional Italian dishes, had a successful ten year run come to an end. A casualty of COVID, the family owned and operated restaurant was unable to reopen successfully after the state mandated closures and restrictions.
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