Casual Dining Completed Its Comeback
Now what? The segment is generating sales like it’s 2019 again, but it hasn’t shaken pre-pandemic traffic problems. That will make future growth hard to come by. Casual dining is back. Sort of. Casual chains on Technomic’s Top 500 ranking last year surpassed 2019 sales for the first time since the pandemic began, generating $63.6 billion. That was 9.5% more than 2021 and about 6% more than 2019. But the growth came largely from higher prices. Menu price inflation at full-service chains was about 8% last year. “You’re seeing a lot of artificial inflation of that sales volume,” said Kevin Schimpf, director of industry research and insights for Technomic, a sister company of Restaurant Business. And if you zoom out further, the growth looks even less impressive. Over the past five years, casual-dining sales have increased just 2% a year on average. “On a five-year basis, 2% is not much,” Schimpf said. When considering inflation over that time, it’s negative. Part of the issue is that there are simply fewer casual-dining restaurants than there were five years ago. The segment lost nearly 800 locations during the pandemic, and though unit count has recovered slightly since then, there are still about 4% fewer casual-dining locations than there were in 2018. Before the pandemic, many believed the segment was overcrowded and due for a pruning. The result, they thought, would be better traffic and profits at the restaurants that were left.
Bielat Santore & Company – Restaurant Industry Alert
BACK ON THE MARKET!
Closed Middletown, Monmouth County New Jersey neighborhood tavern is back on the market after initial purchaser cannot fulfill contract contingencies. One-story 5,212 square foot tavern building with an adjacent two story 600 square foot garage, located within a block of Sandy Hook Bay “Ideal Beach.” Adjacent 10,000 square foot parking lot. Sale includes Middletown Type “C” – Plenary Retail Consumption Liquor License. $750,000 – buys real estate and liquor license!
Contact Richard Santore, 732-531-4200, for additional information.
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By Streamlining Their Menus, Restaurant Operators Do Less With More
Restaurateurs improve sales and reduce costs by focusing on what they do best. Anyone who has worked in menu development for very long is probably familiar with “menu creep,” the tendency of restaurateurs to offer new items based on prevailing trends or gut instinct that don’t really fit with their brand. Experimentation with items such as avocado toast or birria tacos might succeed at getting customers’ attention for a little while, but they can also gum up operations, confuse customers, and keep workers from focusing on the food and beverage that they do best. Operators are figuring that out, and the lessons of the pandemic have helped them to tighten their menus and to approach development of new items more systematically. Nico Nieto, chief marketing officer of Naf Naf Grill, a 39-unit fast-casual Middle Eastern chain based in Chicago, said management took the time during that period of adjustment that everyone endured to look at all of their ingredients and menu-development processes and find efficiencies. “We started looking at our vendors and relationships with them, and we looked at every ingredient and every component [of the menu] to understand what we needed,” he said. They looked at the proprietary spice mixes for their shawarma and steak, the imported pickles and babaganoush, and asked if there were domestic and off-the-shelf items that could provide the same flavor profile with less cost or hassle.
Is The Tip Credit Right for My Operation?
Over the last decade, the U.S. Department of Labor has progressively narrowed the use of tip credits. Under the Fair Labor Standards Act (FLSA), employers are permitted to claim a tip credit, which allows them to pay employees a direct cash wage of less than the federal (or applicable state) minimum wage and rely upon tips provided by customers to make up the required minimum payment. But, over the last decade, the U.S. Department of Labor (USDOL) has progressively narrowed the use of tip credits and has made several public statements hinting that the practice is disfavored and will likely be eliminated entirely. The last few years have seen much activity in this area. USDOL issued a rule that took effect in November 2021 that expanded the agency’s authority to assess penalties against employers who violate the tip provisions of the FLSA. The USDOL also clarified when managers and supervisors may receive and retain tips. Then it issued a second rule, effective December 2021, that reinstated—and complicated—the notorious “80/20” Rule, amended the FLSA’s tip provisions regarding when restaurants with tipped employees may take a tip credit, and modified the definition of work that is considered part of a tipped occupation. Needless to say, the laws and rules surrounding the use of tip credits are constantly changing, and even though you may think you are complying with the latest developments, below are some common mistakes hospitality employers often inadvertently make, and some tips to avoid them.
Why Underpaying Restaurant Employees is a Recipe for Disaster
Develop a relationship with your people. Do you think of your people as a means to an end? I used to. Early in my career I ran through people because completing the task was more important than leading and developing my people. Fortunately, I learned from my dumb mistakes pretty quickly and then really shifted my perspective. Today, I want to share a very important thing I learned. This shift changed the way I led people and managed restaurants and I owe ALL of my success to rethinking this concept. Your people are humans with emotions, strengths, weaknesses, and personalities. They are not just a number or a cog on a wheel. But we often think of them as a number. We think of them as labor (a negative liability on our P&L). I used to do that. When I thought of them as a liability, I paid them as little as possible. This showed my people that I didn’t value them. Everyone wants to feel valued and validated. I had to learn this and then rid myself of the false belief that restauranteurs clung to for 50 years. False Belief: Underpaying Your People Equals Profits. But when I looked at my people as an investment rather than a liability? I looked at them as an asset on a balance sheet instead of a liability on the P&L. New Belief: Your People are an Asset. Let me illustrate this point. What if you hired a general manager at $100,000 a year and that GM shows you five things you can do to save $150,000 a year? Instead of looking at the $100,000 salary as a liability on a P&L, what if you thought of the GM as an asset that gave you a 50 percent return on your investment? You would probably pop the champagne or pour some Pappy 23 year if any other paper investment paid you a 50 percent return.
Five Ways to Enhance and Improve the Takeout and Delivery Customer Experience
Enhance your digital presence. Less than two decades ago, restaurant-quality meal delivery was largely limited to pizza and Chinese takeout. Today, the global food delivery app industry is predicted to reach $320 billion by 2029 — up from $140 billion in 2022. Consumers crave convenience. As such, implementing a robust food delivery and takeout service has become critical for restaurants’ longevity and success. Yum Brands CFO Chris Turner noted that delivery channels have helped brands like Pizza Hut meet demand at peak hours, freeing up restaurant employees’ time to focus on other tasks. Here are five ways to enhance your restaurant’s takeout and delivery operations to improve customer experience and open the door to more profit. Grubhub projects 40 percent of restaurant orders in 2023 will take place online. So, if you’ve skimped on your digital presence, the time to change is now. Create or enhance your website and make sure you offer an “order online” option that is easy to find. You can also consider creating your own mobile app. Mobile apps improve order customization and customer autonomy over the ordering process while also increasing overall brand awareness and local restaurant perception. When it comes to delivery, you can take the process into your own hands. A mobile ordering platform allows operators to directly own profits and guest relationships – allowing customers to easily order pickup or delivery directly from the restaurant, commission free. With the right partner, mobile ordering:
A Preview to The 2023 National Restaurant Association Show
A preview to the 2023 National Restaurant Association Show. New York restaurateur Danny Meyer and Slutty Vegan owner and CEO Pinky Cole will be the Keynote speakers at this year’s National Restaurant Association Show. As restaurant visionaries and entrepreneurs, they will break down their strategies for building an empire, giving back to the community, and turning passion into profit. Meyer is the founder, former CEO, and current executive chairman of Union Square Hospitality Group (ushg). He is the mastermind behind a multitude of New York’s most successful dining institutions, such as Shake Shack and North End Grill. In 2021, Meyer introduced USHG Acquisition Corporation to build and invest in companies that matched USHG’s “employees first” and “enlightened hospitality” values. This is where Slutty Vegan’s Pinky Cole enters the picture. Cole is taking the restaurant industry by storm with her Slutty Vegan empire. From humble beginnings in Atlanta to $4 million in revenue within the first six months of its grand opening, Slutty Vegan is a force to be reckoned with. Cole believes in the power of philanthropy and helping others climb the ladder of success in tandem with her own. Additionally, the Association’s president and CEO Michelle Korsmo will speak on the Association’s work to advance the foodservice industry.
U.S. Government Says It’s Fine To Bring Dogs Into Outdoor Restaurant Spaces
But not everybody is happy about it. But even though nearly half of states already allow canine dining outdoors, the issue is far from settled, with many diners and restaurants pushing back against the increasing presence of pooches. “I’d like to be able to enjoy my meal without having to worry about fleas, pet hair, barking and entitled dogs and their owners,” said Tracy Chiu Parisi, a food blogger in New York, who was once startled by a dog that stuck its head in her lap while she was reading a menu. Restaurants have been required to allow service dogs for decades. But it wasn’t until the mid-2000’s that a handful of states — including Florida and Illinois — began passing laws allowing dogs in outdoor dining spaces, according to the Animal Legal and Historical Center at Michigan State University. Twenty-three states now have such laws or regulations. But the legal landscape is confusing. Michigan law doesn’t allow dogs in outdoor dining spaces, for example, but lets restaurants apply for a variance from their county health department. So, in 2020, the Conference for Food Protection — a group of food industry and health experts that advises the government — asked the U.S. Food and Drug Administration to issue guidance for states. It cited a 2012 risk assessment in Australia and New Zealand that found that the health risk to human diners from dogs was very low.
Did You Know?
Asbury Park’s 11 greatest restaurants, ranked for 2023. Over the last two decades, Asbury Park’s reputation has shifted mightily, from a ramshackle shell of a once-prominent Shore town to a chic destination for all things food, drink and fun. Along the boardwalk and Cookman Avenue downtown drag, dozens of restaurants battle for attention from locals and tourists alike. Storefronts open and close each season, only the strong survive.
‘Hospitality is hard’: Readers share their experiences working in restaurants. Working in the hospitality industry can be a rewarding experience for many — the creativity, the ever-changing nature of the job, and the interaction with the public help drive some of the passion many have for restaurants. But recent events have further brought to light the toxic culture that exists within the industry. We asked readers to share their experiences working in the hospitality industry — what they find fulfilling about the work, as well as what they find troubling. Below, here are five responses from Boston.com readers who shared their experiences working in the restaurant scene.