For Restaurants Fighting Inflation
Policymakers can help. The price of chicken wings skyrocketed 40 percent in 2021 and continues to rise. Now that favorite summer staple, ice cream, is suffering similar impacts. No matter what—or where—you might eat out, the ingredients that go into your meal, snack, dessert, or beverage are likely far more expensive than they used to be. Such news will come as no surprise to most Americans, who have had to dig deeper in recent months. Inflation is affecting food costs across the board, but the consequences are not spread equally. Restaurants are struggling with hits from every direction. From one side, they are suffering price hikes on menu ingredients, supplies, energy and more. From the other, customers are extremely price-sensitive right now. If a family is spending extra on groceries, they often make up the difference by dining out less. Restaurants are under immense pressure to offer competitive prices to keep tables, booths, and takeout queues full. he results are disproportionate. Wholesale food prices have risen 15.6 percent since this time last year. Grocery stores were compelled to raise their prices by 11.9 percent between May 2021 and May 2022. Restaurants, however, have only raised menu prices 7.4 percent in the same timeframe.
House Data Privacy Bill Presents Systemic Challenges for Restaurant Industry
House Data Privacy Bill presents systemic challenges for restaurant industry. Washington, D.C. – Yesterday, the House Energy and Commerce Subcommittee on Consumer Protection and Commerce marked up the American Data Privacy and Protection Act. The bill would set a national standard for data collection and protection. The National Restaurant Association believes that a preemptive federal data privacy law that creates a single, uniform standard would benefit the industry, but have concerns that this bill, as drafted, would present significant challenges for large and small operators. “Whether it’s putting cash and receipts in a register or safe, or maintaining the highest standards when selecting, storing, and preparing food, security is a priority for restaurant operators,” said Sean Kennedy, executive vice president of Public Affairs for the National Restaurant Association. “Securing our customers’ personal information is no different. As the cornerstone of communities throughout America, restaurant operators build their business on trusted relationships with their guests, and they rely on robust data privacy and security practices to strengthen that trust in today’s digital economy.”
The Importance of Staying Current on Liquor Laws and Insurance
Highly recommended that restaurateurs review their policy at least once per year. The climate of the hospitality industry is forever changing. Based on completely unpredictable occurrences such as the COVID pandemic and societal realities such as violence at bars and restaurants, hospitality establishment owners have a lot to consider when it comes to their coverage. The most important thing new owners should know about insurance coverage is that it’s a vital part of running their business. Oftentimes, getting coverage isn’t taken into consideration when it comes to the budget. However, having proper insurance coverage is a huge part of protecting the business, and the ownership, in the case of an accident or incident. While many people see insurance as an umbrella that could just as easily work for apartment complex or a restaurant, that is simply not the case. A hospitality business should seek an agent that specializes in coverage for their industry—one who knows the ins and outs and the current laws as it relates to things like liquor policies and weapons exclusions. Those are two of the biggest things that restaurant owners should be covered for in their businesses. Even seasoned restaurateurs may not realize the ever-changing status of liquor laws and other endorsements that are constantly evolving based on the temperature of the world. For example, a weapons exclusion on any policy could be detrimental to a business. It’s also important to be well-versed in bacterial exclusions and marijuana exclusions, for example. And the customer needs to be knowledgeable about how they are covered if the world is ever in another situation like COVID.
Restaurant Sales Remain Positive in May
As expected growth slowdown continues. Overall, May 2022 was a good month for restaurant sales. The expected slowdown in sales growth continued thanks to last year’s sales numbers — which were impacted by vaccines for COVID-19 and the reduction of pandemic restrictions. Both unleashed pent-up demand in the market, creating today’s challenging sales hurdles. Month-over-month, sales growth numbers held steady, staying at levels that would have been considered robust in the pre-COVID era. Sales growth was +4.9% in May, down only slightly from the +5.3% reported for April. These strong sales numbers are due to guest check growing at an accelerated pace. The bigger concern is traffic, which posted its third straight month of negative growth. Traffic growth was -2.9% during the month, a small downtick from the -2.8% experienced in April. But even these negative traffic growth numbers are not far off from what was happening at the end of 2019. The months in Q4 2019 posted average traffic growth of -2.0%.
Is a Recession Coming for Restaurants?
And if so, how will brands navigate the landscape? A good deal of ground-level sentiment hints at a resilient restaurant consumer. But patterns are changing. Foodservices and drinking places earned $84.98 billion in May, per federal data. It represented only a 0.7 percent increase from April and perhaps the surest sign, yet guests are starting to adjust spending amid an inflationary climate. Over 2022, the bulk of the industry’s recovery has stemmed from price versus traffic. The latter decreased 4.1 percent, year-over-year, across quick service in May, according to Revenue Management Solutions. Net sales moved into the green at 3.4 percent after a 2.9 percent dip in April. However, again, this was a kick back from spending as overall prices hiked 11.8 percent in the May and average check rose 7.8 percent, year-over-year. Basket size, meanwhile, was down 3.6 percent and, compared to the previous month, quantity per transaction decreased by 1.6 percent.
How COVID Forced Restaurants to Prioritize Convenience
In order to survive, they had to shift gears creatively and act fast. Few businesses were as impacted by COVID-19 as the restaurant industry. In order to survive, they had to shift gears creatively and act fast. With doors shut, having to let staff go, facing supply-chain issues, and dealing with the fact that much of the population was afraid to be in public, there were many wrinkles to iron out. As Deloitte stated in a 2021 report, “Similar to early pandemic trends, there are three main vectors at work influencing restaurants: convenience, digital, and safety. Of course, these catalysts overlap and influence each other greatly, but together they point toward a single, overarching mandate for restaurant brands to fundamentally change their business models.” Many of the adaptations restaurants made are here to stay — having no other choice, some of these unexpected changes have become the norm. Previously prohibited things like to-go cocktails and outdoor seating areas were pushed through and restauranteurs are fighting to keep them as part of their business models even after the pandemic shutdowns have ceased.
How to Create a Restaurant Floor Plan
Determining the seating in your restaurant floor plan can be a difficult task. Some considerations to take into account are the size of the establishment, and what kind of restaurant you have. How you want the interior to look aesthetically also factors in, and of course, safety should never be overlooked. Here are some tips and guidelines that will help you maximize the space of your restaurant floor plan. This will ultimately make your business more profitable. In primary space planning, the general rule of thumb for determining the area allotted is that the dining area should comprise most of the total area. The kitchen, storage and preparation area should take up the remaining space. These dimensions will have to be adjusted if you plan on having a waiting area or a bar. But those should be the approximate percentages for the total area.
Did You Know?
Six concepts every restaurant employee handbook should cover. The idea of creating a well-thought, engaging employee handbook isn’t why restaurateurs go into the food industry. However, spending the time to create a handbook will help create the desired culture, as well as save time and money (helping to avoid employee turnover as 36 percent of employees say they quit because they wish they had better training, legal action, safety concerns). We’ve detailed six concepts that every restaurant employee handbook should cover to create a well-oiled machine.
NJBIA-backed teen worker bill advances to Senate. NJBIA strongly supports legislation released by a Senate committee on Monday that makes permanent new working hours for minors and greatly improves the process for teens to obtain working papers. The Senate Budget and Appropriation Committee voted unanimously to release bill S-2796 (Gopal, D-11) and its identical Assembly counterpart, A-4222 (Freiman, D-16). The full Assembly already passed A-4222 earlier this month. “This bill is a win-win-win that will help employers find more workers, provide teens work more hours and more pay and help New Jerseyans avoid longer summer waits and lines,” said NJBIA Vice President of Government Affairs Christopher Emigholz, who took the lead in helping establish the legislation with sponsors.
Bielat Santore & Company – Restaurant Industry Alert
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