The Restaurant of the Future
A vision evolves. Consumer demands for convenience and seamless digital experiences are on the rise, further accelerated by the COVID-19 pandemic. How can food establishments elevate customer experiences to be successful with the next-generation guest? We’re serving up insights into three trends that are shaping consumption patterns among restaurant guests and examine actions restaurants can take to thrive in the future. The restaurant industry is grappling with questions that used to be certainties. What does a modern-day ordering experience look like? What does it mean to operate a restaurant in 2021? What counts as a restaurant, anyway? In late 2019, the answers to those questions were already in flux. Since then, many forces have accelerated change in the restaurant industry, and the shifts are not always obvious. Similar to early pandemic trends, there are three main factors at work influencing restaurants: convenience, digital, and safety. 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. So, where does the restaurant industry go from here? We turned to 1,000 consumers who dined in a restaurant within the past three months to take a fresh pulse of their attitudes and perspectives.
Widespread Slowdown of Sales and Traffic Growth Continues
For all restaurant segments. Macro-economic pressures and a complex consumer landscape continue to afflict the restaurant industry. Sales and traffic growth face difficult laps from 2021’s release of pent-up demand and stimulus. Still, a view into three-year sales and traffic growth patterns reveals segment-specific resiliency. Year-over-year (YoY) same-store sales and traffic experienced the fifth consecutive month of negative growth. July’s sales growth was +0.6% — a slowdown of 1.3 percentage points compared to last month. Putting it into a longer historical perspective, this is the weakest growth posted by the industry since February 2021 — the last month in which the industry lapped over a pre-pandemic month. Guest count growth rates face a similar and, frankly, more concerning circumstance. Same-store traffic experienced negative YoY growth for the five-month period ending in July 2022. Looking at traffic numbers from the first week of August, Black Box Intelligence expects the negative traffic growth trendline will continue its streak through the end of the month. Traffic growth was -5.1% in July — a decline of 0.4 percentage points compared to June’s growth rate. Like same-store sales, this was the softest traffic growth posted by the industry since February of last year.
The Art of Inflation Communication with Restaurant Customers
Nothing says “pay attention” like a personalized handwritten note. Nearly every industry has been impacted by inflation. And restaurant prices have had the largest gains since the 1980s, reflecting higher costs for food and labor. As consumers become more discretionary with their spending, they have been paying more attention to prices across brands and have even been willing to ditch companies they have been loyal to for years to spend less. In some instances, consumers have avoided dining out altogether in order to reduce their monthly food costs. Retaining loyal customers and recapturing their purchasing power once their budget can afford it, or prices return to lower levels, is reliant on restaurant brands having open and transparent communication with customers during inflation. While no one enjoys paying more for goods and services, it is something everyone is being impacted by, creating a universal understanding and acceptance that prices must go up. However, it does not mean customers will be amenable to drastic or sudden price jumps, increases that seem out of alignment with competitors, or higher prices that appear to last longer than necessary. Most marketing and sales experts would agree customer retention is more cost-effective for a business than customer acquisition. As consumers and businesses watch their discretionary spending and cut back on perceived extras, savvy companies will invest more effort into maintaining positive relationships to protect their bottom lines. However, receiving an email, text message or phone call may be the last thing a customer wants.
Could Co-Sourcing Help Restaurant Staffing Issues?
HR and payroll. While restaurant staffing levels increased across the U.S. in recent months (a net 1.9 million jobs were added), total industry employment remained below pre-pandemic levels in the majority of the states. The question remains: Where are restaurants going to find enough people to fill those jobs? There is a myth surrounding traditional outsourcing models amongst small businesses, such as in the restaurant industry, that they are too small to take advantage of the global talent market. Thankfully, that is not the case anymore. Utilizing co-sourcing, restaurants, restaurant software providers, food distributors, or suppliers of any size can take advantage of the global talent pool at a scale that makes sense for them. It’s an excellent way to improve business processes, reduce cost structure, and make your restaurant business more productive. Here are a few areas where outsourcing can help the restaurant industry increase productivity, resilience, and profits. Payroll processing and benefits administration are easy roles to fill using co-sourcing. For example, a chain of Jack in the Box restaurants is using multiple payroll specialists successfully and supporting these tasks for all their employees. With proper training and employee manuals in place, these roles do not need to be filled in-house.
What’s Happening with Food Prices
What can you do about it? No one is a stranger to the challenges of rising food prices today, especially restaurant and foodservice operators. It seems like every day different numbers are being thrown out and it becomes hard to track what is going on other than everything getting more expensive. But there is a lot more nuance to the numbers… nuance that can have a big impact on your business as a restaurant or foodservice operator. By knowing what numbers are the most important to you, you can make decisions on what is on your menu, what ingredients go into those menu items, and how you should think about pricing everything to make sure your business is successful. We are going to give you the background on what data on food prices is available and how to think about the potential impacts of that data on your business. The exact impacts are unique to a restaurant based on your customers, menu, and staff, but you can still use general trends to point you in the right direction on potential actions to take.
5 Common Mistakes Restaurants Make
When replying to reviews. It’s no secret that customers turn to online reviews to help them decide where they should have their next lunch, brunch, or work happy hour. Monitoring your reviews – and how you respond to them – might seem tedious, but it’s just as important as the reviews themselves. Here are 5 mistakes restaurants should avoid making when replying to online reviews:1. Responding only to positive (or negative) reviews. Replying to customer reviews should be a top priority for reputation-minded restaurant owners. Yet often, restaurateurs make the mistake of focusing only on positive or negative reviews. Sure, responding to five-star reviews with an expression of glowing gratitude feels great. After all, who doesn’t like a little appreciation for a job well done? However, one-star reviews can be just as influential as negative reviews and shouldn’t be ignored. Every review is an opportunity to engage with a customer, strengthen your restaurant’s respectability, and convert potential guests into loyal customers. Regarding restaurant review management, it’s important to show customers you value all feedback – no matter how favorable or unfavorable the review.
What’s Next for Tipping?
With the old guidelines this scrambled. A short time back, I had a leaky kitchen faucet. So, as you might expect, Peter, I called for help–in this case a competent plumbing pro I’d used in the past. The drip duly repaired, he offered me his smart-phone invoice for on-the-spot payment, and you can imagine my surprise when, below the service fee and the trip charge, there was a line for tips. Wait, what? Trying to look cool, I tapped the 20% box and spent the rest of the day wondering when exactly such tradesmen had joined the ranks of tipped employees. It’s clear that I’m not the only consumer baffled by tipping protocols and befuddled by how they’re evolving in the post-Covid economy. Since January, The New York Times, Washington Post, The Economist, The Guardian, Food & Wine, Linked In, Eater and even The Hill, the political website that boasts the White House among its followers, are some of the sources that have tried to help stressed consumers pick their way through the who-when-and-how-much gratuity minefield. You’d think by this time that restaurant operators and the dining public would have cracked the code. One of the most bedeviling of dining rituals, tipping is also one of the oldest. Said to have originated in 17th-century English taverns, a small monetary token was proffered “to insure promptitude,” a phrase later streamlined to the familiar acronym, “tip.”
Did You Know?
Amazon Prime signs deal with DirecTV to air ‘Thursday Night Football’ games in bars, restaurants. Amazon Prime and DirecTV reached a multi-year agreement that will see the satellite-TV provider air “Thursday Night Football” games in more than 300,000 bars, restaurants and other businesses. Amazon Prime holds the exclusive rights to “Thursday Night Football” games for the next 11 seasons. DirecTV will air the first game, a preseason matchup, on Thursday. Amazon’s Prime Video reached a deal with DirecTV to air its “Thursday Night Football” games in more than 300,000 businesses such as bars and restaurants.
Why restaurants must prioritize the employee experience. Restaurants continue to struggle with recruiting and retaining frontline workers amid nationwide staffing shortages. The restaurant workforce is short 6.1 percent compared to pre-pandemic levels, translating to roughly 750,000 open positions. Staffing shortages not only place a tremendous burden on managers and employees, but they severely impact the customer experience as well—threatening operations, customer loyalty, and long-term growth. To overcome staffing shortages, quick-service restaurant managers must focus on cultivating a technology-driven employee experience. Adopting centralized, user-friendly workforce technology can provide support to your workers while streamlining operations—benefits that help you retain employees and create a better customer experience (CX).
Bielat Santore & Company – Restaurant Industry Alert
BIELAT SANTORE & COMPANY SELLS ANOTHER NJ RESTAURANT
The catering facility known as “Sterling Gardens,” located on 227 Freneau Avenue (Route 79), in Matawan, Monmouth County, New Jersey, has been sold according to Richard R. Santore of Bielat Santore & Company, Allenhurst, New Jersey the broker for the sale. The establishment had enjoyed a reputation as a banquet center for over 50 years. However, all good things come to an end. The new owner has a bigger, bolder and brasher vision of what is to come next for this unique property.
REGIONAL RESTAURANT COMPANIES
ACTIVELY LOOKING FOR NEW LOCATIONS FOR IMMEDIATE EXPANSION!
Considering the sale of your existing restaurant (including land, building and liquor license)? Call Bielat Santore & Company first. The restaurant companies we are currently working with are internally funded, have established banking relationships, are corporately managed and can move expeditiously toward closing on the right locations.
Contact Richard Santore, 732.531-4200 for a free personal consultation.
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