National Restaurant Association Asks for Relief
For Economic Injury Disaster Loan recipients. The National Restaurant Association on Monday sent a letter to U.S. Small Business Administration administrator Isabella Casillas Guzman asking for relief options for small restaurant operators who received Economic Injury Disaster Loans. The EIDL program was created in March 2020 to provide a boost to small businesses that do not have strong banking relationships, and therefore might have had difficulty getting a Paycheck Protection Program loan. The loans had a 3.75% interest rate and a 30-year maturity. As of August 2022, the program had distributed four million loans totaling $380 billion, and $800 million was remaining in the subsidy. “As we know all too well, 90,000 restaurants closed due to COVID-19. Many of the restaurants still open today — particularly the 177,000 that were unable to receive a Restaurant Revitalization Fund grant — face an uncertain future,” said Sean Kennedy, executive vice president for Public Affairs at the NRA, in a statement. “An inflexible EIDL repayment process will likely trigger a second wave of closures. Restaurants, their employees, their customers and the communities served will be forever changed if these small businesses begin to fail.”
Where to Now, Independent Restaurant Coalition?
Focusing beyond advocacy to better support the specific needs of independent operators. After Congress failed to re-up the Restaurant Revitalization Fund earlier this year, and the U.S. Small Business Administration claimed the program was out of money, the situation seemed dire for independent restaurant operators. It also seemed like an unhappy ending for the Independent Restaurant Coalition (IRC), a grassroots organization of chefs and indie operators that had come together for the first time as a unified voice for their very specific segment of the restaurant industry. With a staff of one (plus a small army of consultants) and co-founders that include celebrity restaurateurs Tom Colicchio, Kwame Onwuachi and Will Guidara, the IRC has spent the past two and a half years blasting a simple message: Independent restaurants were hit hardest by the pandemic, and they need government relief. That’s still true, said Erika Polmar, the IRC’s executive director. But, like the very restaurant members the organization seeks to protect, the coalition is evolving to better serve a post-pandemic audience. The IRC is expanding its focus to become not only an advocacy group, but also a peer-to-peer support system for independent operators across the country, who can so often feel very alone in their daily battle to keep their businesses alive.
Tips to Navigate a Perfect Storm
That’s threatening our food supply. We were ill-prepared for the COVID pandemic that devastated the food industry with supply chain disruptions, product and labor shortages, and soaring inflation. We simply didn’t see it coming, and we weren’t ready for the ongoing ramifications of this crisis. The biggest learning from COVID is that food businesses must be prepared for any crisis – and ensure their suppliers all along the supply chain are also prepared and resilient. Unfortunately, it’s not all smooth sailing, post-COVID. Climate change is causing extreme drought conditions out west, which is harming crops in California and surrounding areas. Floods are washing away precious soil in the Midwest, an area that grows three-quarters of our nation’s corn. And Europe’s record-setting heat is torching vegetation and destroying crops. Overseas, the Dutch government has mandated a 30 pecent reduction in livestock – a damaging directive that will disrupt the food supply and close one in three Dutch farms. And the ongoing Ukraine/Russian conflict means six million tons of exports, including grain, are stalled. Labor shortages mean food is rotting in shipping containers, warehouses, and trucks because there aren’t enough workers to get them to their final destinations. This perfect storm of crises is threatening our food supply. Restaurant operators would be wise to take the following steps:
How to Proactively Prepare
For the next food crisis. No one could have predicted the COVID-19 pandemic and the enormous disruption that ensued. The food industry wasn’t prepared for shutdowns, supply chain disruptions, product shortages, and rising prices that resulted from the COVID crisis, and we didn’t have backup plans to deal with the fallout. Many restaurants didn’t survive the crisis. Those that did had to demonstrate tremendous flexibility, resilience, and creativity to navigate uncharted waters. The key lessons that we learned during the pandemic – pivot to different menu items when certain products are unavailable, reduce waste, lower food and labor costs, etc. – will also be essential as our industry faces a new set of threats. As a restaurant operator, you have no control over the weather, overseas wars, or ongoing inflation, but there are things within your control, and that’s where you should focus. Prioritize waste reduction. Adjust your menu to feature local, affordable ingredients. Research new suppliers. Stay aware of industry trends and current events. Utilize tech tools to streamline operations and make important tasks more efficient and accurate. If you stay prepared and resilient, you’ll be ready to handle whatever curveball comes next.
Why Inflation is Making Customer Experience More Important than Ever
Customers demanding more value for their money. With discretionary spending dwindling as a result of the economic slowdown, now more than ever, restaurants are being pressured to adopt new methods to boost customer engagement. Remaining competitive in an ever-changing world is becoming increasingly demanding, especially as it becomes the norm for restaurants to provide digital experiences. Whereas quick-service restaurants used to trust that foot traffic would undoubtedly come their way, this is no longer the case, as foot traffic has fallen by almost 50 percent post-pandemic. Many of their most loyal customers failed to return after COVID, and the boom of digital food delivery services such as Grubhub and UberEats means that many customers just aren’t entering brick and mortar sites like they used to. The rising cost of living has resulted in customers demanding more value for their money, especially as menu prices rise with inflation. Restaurants must now get creative by producing innovative digitized experiences that add value to their services, while also maintaining the physical elements of in-person dining.
How Operators Can Get Clever with Guest Data
Repeat customers provide an abundance of valuable insights. Many diners are creatures of habit, ordering their same weekly takeout burger, or coming into a restaurant at the same time each week. Yet some operators might not recognize that these repeat customers provide an abundance of valuable data that they can use to deepen their loyalty—both on and off premises. There are countless clever ways restaurant owners can leverage this guest data to boost revenue and increase brand loyalty to create the ultimate guest experience. Let’s start with our loyal in-house diners. The guests that come into their favorite spot each week, for example, provide tons of customer data which can be used to its fullest potential through a comprehensive customer relationship management (CRM) system. This allows operators to match the guests’ weekly reservation with their existing client profile or, if the customer hasn’t dined with them before, create a new one according to their contact information. Returning guests continue to build a robust customer profile over time, providing staff members with a vast understanding of their flavor preferences through the collected data. So, when that loyal customer books their weekly dinner for taco Tuesday, their server can suggest a drink recommendation that pairs well with their routine dish, such as a spicy margarita made with house-made infused tequila. Having actionable insights from guest data presents the perfect opportunity for operators to upsell different food and beverage components.
Uber Eats Makes it Easier for Some Restaurants to Sign Up
Operators that use Toast or Clover. Uber Eats is making it easier for some restaurants to sign up for its services. Operators that use Toast or Clover can now create an account with the third-party delivery provider directly through their POS systems. A tighter integration between Uber Eats and the suppliers simplifies the process, allowing restaurants to get set up in “just a few clicks,” according to Uber Eats. Uber Eats said the self-signup system is a first for the industry and will apply to hundreds of thousands of restaurants. “At a time where merchants are faced with unprecedented staffing challenges, we heard loud and clear that we need to make it as easy as possible to unlock the growth that Uber Eats offers,” said Roy Frenkiel, director of product management at Uber, in a statement. The integration also means that once restaurants are up and running on Uber Eats, incoming orders will be injected directly into their POS rather than a separate tablet.
Did You Know?
10 Secrets of Restaurant Management. Did you know that 60 percent of restaurants fail during their first year, while 80 percent face death’s door without making it past their five years? The two major reasons for failures are locations and poorly organized processes. If location is quite an obvious and easily fixable problem, managerial issues cause restaurant owners and managers too much headache, indeed. Is there a secret ingredient to professional restaurant management? If you apply the below little-known or sometimes underestimated tricks, you’ll have a stellar restaurant team that can lead your business to higher revenues and success.
Could extra teen working hours help restaurants with the labor shortage? Federal regulations around teenage work have been in place for decades, but new legislation in the House seeks to increase youth workforce participation – a move that could help restaurants fill the void created by the ongoing labor shortage. Introduced by Rep. Dusty Johnson (R-SD), the Teenagers Earning Everyday Necessary Skills (TEENS) Act(Opens in a new window), H.R. 8826, would amend the Fair Labor Standards Act to expand working hours for teens between the ages of 14-16. Specifically, the bill would allow 14- and 15-year-olds to work between the hours of 7 a.m. and 9 p.m. year-round and increase the number of workable hours during a school week to 24. Currently, teenagers are limited to working 18 hours/week and are not permitted to work past 7 p.m. when school is in session.
Bielat Santore & Company – Restaurant Industry Alert
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