The New Rules of Restaurant Design
A story. The act of going out to eat was once borderline sacred. Whether visiting a neighborhood favorite or getting adventurous and finding new flavors, you got dressed for the occasion and headed to a restaurant where you would be hosted, served, and cleaned up after. These days, on the heels of the pandemic and amidst high levels of inflation, diners are more likely to skip the being hosted, served, and cleaned up after in favor of the more grab-and-go approach that is take-out. It comes as no surprise that, according to Statista, between 2019 and 2020 dining-in saw a 100 percent decrease, year-over-year. In response to the pandemic, restaurants were forced to close their dining rooms without notice or knowing for how long. Cue the rise of online ordering and food delivery services, which collectively accounted for just six percent of food service transactions in 2019, app-based orders more than doubled to 15 percent in 2020. So, it’s not hard to believe now that consumers have applied new meaning to going “out to eat.” Spending the extra time and money required to leave the couch and put on “hard pants” to eat the same food that could be dropped at the doorstep is a tough sell, to say the least. According to Yelp, nearly 70 percent of American adults are now more likely to order takeout than they were pre-pandemic. What then will lure consumers out of their living rooms and into your dining rooms? A really good story. Chapter 1: The Journey Begins…
How Restaurants Can Master Revenue Management
Tips to navigate the RM toolbox for restaurant success. In my previous article, I delved into the essence of revenue management (RM) and its objective: to maximize revenue and profit by offering the right product to the right customer at the right time, for the right price, through the right channel. Now, let’s embark on a deeper exploration of the world of RM tools and methodologies, guiding you on how to choose the best approach tailored for your restaurant’s success. Allow me to share two experiences that shaped my perspective on RM tools. The first occurred around 40 years ago during a short course atop a windmill. Communicating with fellow students, who spoke English as a second language, presented challenges. Requesting a hammer might result in being handed a screwdriver, leading to amusing mishaps. It dawned on me then that effective communication and choosing the right tools for the job are crucial in any endeavor. The second tale unfolded about 15 years ago in Singapore. I had extensive experience optimizing table mix in restaurants and offered suggestions to enhance their customer capacity. However, they dismissed my ideas, citing a labor shortage. This taught me a valuable lesson: while RM offers an array of tools, the true art lies in selecting the right one for the job. Thus, the RM toolbox was born. The RM toolbox has three shelves: “All-purpose,” “Hot,” and “Cold.” Each shelf holds a unique array of tools, and the key to success lies in knowing when to draw from each.
Bielat Santore & Company – Restaurant Industry Alert
MONMOUTH COUNTY, NJ RESTAURANT AND BAR FOR SALE
Photo used to depict “Restaurant/Bar” only. Not actual representation.
Monmouth County Restaurant/Bar; “Go-To” restaurant at the NJ Shore; THIS ONE WILL GO FAST! waterfront – water view 11,400 square foot free standing facility in mint condition; 3 bars seat 70 +split level dining for 160; outdoor seating for 120; well-maintained fully equipped high-end kitchen; valuable Class “C” liquor license; business only open 10 months a year – 5 days a week – no lunch; plenty of opportunity to increase sales; significant loyal customer following, in addition to an influx of summer trade; fashioned for the seasoned restaurant operator; financing available to qualified.
For detailed information contact Richard Santore, 732-531-4200.
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The Rise of the Tech-Savvy Diner
Meeting the digital expectations of today’s customers. Today’s diners are tech-savvy, connected, and informed. They seek convenience, personalization, and interactive experiences. As a result, restaurants and bars must adapt and innovate to meet these digital expectations, retain their current customers, and attract new ones. Today’s diners are more connected and informed than ever before. They use their smartphones for everything from discovering new restaurants, reading reviews, making reservations, and ordering food. Their dining habits have evolved with technology, with a preference for establishments that offer online ordering, digital menus, and contactless payment options. They expect seamless digital interactions, quick responses, and a high level of convenience. Catering to this digital-first approach is crucial for restaurants and bars aiming to meet these evolving expectations. In the era of the tech-savvy diner, personalization is not a luxury; it’s a necessity. Establishments can leverage data from online interactions to create detailed customer profiles, enabling them to tailor their offerings and services to individual preferences. For instance, by using data analytics, restaurants can understand customer preferences and tailor their menu offerings accordingly. They can also use technology to personalize the customer service experience, such as through personalized greetings or recommendations based on past orders. This level of personalization can significantly enhance the customer experience, fostering loyalty and satisfaction.
Diners Aren’t Pleased With Service Fees
You feel like you’re paying a cable bill. Neal McGarity was surprised when he got his bill at The Shark On The Harbor in Ocean City, Md., a few months ago. It’s not that the total was more than he was expecting—not exactly. It’s that instead of one bill, he got two: one with the price if he paid in cash, and the other with a 3.5% “convenience fee” if he paid with a card. McGarity didn’t have enough cash on him to pay that way, so he had no choice but to accept the upcharge. Though the difference was small, he left feeling confused and a bit cheated. And he hasn’t been back to The Shark since. “In my mind, that’s a really wacky way to go about things,” he said. “Why does the customer get penalized for the convenient, widely accepted choice?” It’s a question more diners are asking themselves as the dreaded service fee spreads from hotels, airlines and online ticket-sellers into restaurants. Last August, 16% of operators told the National Restaurant Association that they planned to add surcharges to help control rising costs. These have taken the form of fees for everything from employee benefits to credit-card processing to water. Some are tacked on with no explanation at all. And many come with little warning other than some fine print on the menu.
Shake Shack Tells Profitable Growth Story
In uncertain economic times. Amid talks of inflation and a potential recession, Shake Shack’s profit is as high as it’s been in years. In the second quarter, the fast casual reached a 21 percent operating margin—a 240-basis-point increase year-over-year and the best mark since 2019. CEO Randy Garutti called it a level that “few restaurant companies in this country” have ever done. Also, the chain swung a record $37 million in adjusted EBITDA, good for a 370-basis-point improvement from 2022. “I hope that’s the note that people hear a lot going forward as we’ve grown sales, as we are materially growing this company,” Garutti said during the brand’s Q2 earnings call. “We are a profitable growth company and it’s a really exciting time for us.” CFO Katie Fogertey said Shake Shack’s margin outperformance began with strategic pricing and increasing the difference in prices across markets to align with regional and guest demographics. Overall, menu prices were up in the high-single digits in the second quarter. The plan will be to raise prices by 2 percent in select locations in the back half of the year. “We’ve gotten better and better in our pricing,” Garutti said. “When you think about the geographic disparity of our pricing and our ability to take pride in our more expensive, but also higher brand awareness markets, we generally tend to take more price there and we’re generally more cautious in those lower brand awareness [markets]. So, we think having the right price, having the right opportunity, is really important as we look across Shacks.”
Saturday Brunch is Now Restaurants’ Busiest Daypart
More than 10% of all dining dollars are spent from 8 a.m. to 1 p.m. on Saturdays. Like many of us 9-to-5-ers, the restaurant industry lives for the weekend—and Saturday mornings in particular. According to a new report from Square, Saturday brunch is now restaurants’ busiest daypart by sales, replacing Friday lunch as the industry’s most lucrative period. More than 10% of all dining dollars were spent between 8 a.m. and 1 p.m. on Saturdays in the second quarter, compared to 8.5% in 2019, Square found in its analysis of data from about 800,000 restaurants. It’s part of a bigger shift in restaurant traffic from weekdays to weekends coming out of the pandemic. In 2019, restaurants were busiest during lunch on weekdays and peaked around midday Friday. But with more people working remotely, combined with pent-up demand for dining out, weekends are now the prime time to visit restaurants, according to Square. “With many people continuing to work from home, they’re not going to be spending their money on a soup or salad from the cafe around the corner from the office,” said Ara Kharazian, research and data lead at Square, in a statement. “At the same time, people are still excited about returning to indoor dining, and they’re choosing to spend their dining dollars on weekend mornings instead.” Brunch is in a unique position to benefit from this shift, being as much of an activity as it is a meal. It caters to large groups looking to celebrate and socialize, often doubling as the capital-E Experience many consumers are after.
Overcoming Addiction in the Restaurant Industry
Recovery always has to be the goal. I knew I had hit rock bottom as an addict when I did a drunken face plant onto the concrete sidewalk near the restaurant I owned and then used super glue to put my face back together. It was as bad as it sounds. But things got worse. For some of us who are addicted to drugs or alcohol or both, rock bottom isn’t low enough to motivate change. My lowest of lows came not long after that while riding with my mother in her car. I loved and respected my mother. She was, and is, a wonderful mom, an exemplary human being, and an accomplished professional with a PhD. But one afternoon, as we rode near my restaurant, she pulled over and ordered me out of her car. She said she couldn’t take it anymore. She gave me a choice: get help or else she would be out of my life. I did not immediately agree. To my addicted brain, that was a hard choice. You can super glue a face back together. But a whole life? I wasn’t so sure. The odds were not on my side. According to the National Institute on Drug Abuse, over 20 million people in the United States were diagnosed with substance use disorders in the past year. And only 10.3 percent of people who had substance use disorders received treatment. For those who don’t, the prospects are grim. More than 109,000 people in the U.S. died of drug overdoses last year, according to the Centers for Disease Control and Prevention.
Did You Know?
The #1 recruiting strategy. Recruiting is hard. It’s expensive and a huge distraction. And a lot of it doesn’t even need to happen. The #1 recruiting strategy is retention. Hire the right people and do everything you can to keep them. When you retain your employees, you can focus on growing your business. Every time you have to replace a team member, it’s an opportunity to upgrade. But it’s also a step backward. The cost of turnover is high—thousands of dollars even for your most entry-level employee. And that does not factor in the opportunity costs: how much could you have grown if you kept your team together.
Restaurant employment levels inch back up in July. After losing jobs in June for the first time in nearly two and a half years, the restaurant and bar sector inched back up on employment in July. According to the Bureau of Labor Statistics’ monthly jobs report, released Friday, foodservices and drinking places added 13,400 jobs last month, which is slightly above June and May numbers. The restaurant workforce remains below pre-pandemic levels by about 64,000 jobs, or 0.5%.