![]() Is it finally time for big changes when it comes to restaurant pay? After years of restaurants testing the waters with no-tipping policies and, in many parts of the country, having to adapt to new minimum-wage requirements, the pandemic (and the unruly diners it has brought with it) may be providing an industry-wide time of reckoning. Many operators are finding that making adjustments to the compensation they offer – whether through their hourly wage, tipping policy, or health benefits – has become a must at a time when the industry is losing workers to other professions. The operators who have found ways to make it work are reporting some early success: According to a recent New York Times report, operators who have changed their compensation structure to ensure a steady living wage – or even simply offering other quality-of-life benefits like flexible schedules, lower health premiums and student debt-reduction programs in its place – are attracting staff. Providing income and scheduling stability stands to help restaurants retain their staff too (and minimize the high costs of employee turnover). Of course, it takes a strong business model to make it work financially, and operators are making such money-saving moves as streamlining menus and adding a service fee to checks to make that possible. As you consider your operation’s strengths and weaknesses when it comes to employee compensation, where are there opportunities for you to improve your staff’s quality of life in meaningful ways? If raising wages isn’t an option, are there ways for you to make your existing positions a better long-term fit with your staff’s personal lives – and minimize your turnover costs in the process? ![]() Throughout the pandemic, ghost kitchens have enabled many restaurant operators to keep business going behind the scenes when dining rooms were closed. But as it turns out, operators may be able to build more trust with the public if they pull back the curtain on the foods they’re preparing in ghost kitchens. According to a Datassential survey, three-quarters of consumers said they would support a local restaurant that “goes ghost” in order to stay in business. At the same time, they’re sensitive to restaurants using ghost kitchens to present multiple faces to the public: 55 percent of respondents said they think it’s dishonest for a restaurant to sell the same food under a different name and two-thirds said virtual brands should share their locations and state that they are digital-only concepts. If you operate a ghost kitchen, consider telling your customers why you’re doing it – and how it helps improve the final product they receive. Instead of turning them off, it may actually help you build trust with them. ![]() In a recent legislative update from Washington, Sean Kennedy, the National Restaurant Association’s executive vice president of public affairs, said the restaurant industry had lost 45,000 jobs at the end of August. Further, new vaccine and testing mandates at businesses with a certain threshold of employees on staff could also make already-challenging staffing conditions even more difficult. To be sure, this is not exactly the Covid-19 recovery that restaurant operators had in mind – but there are efforts underway to try and change that. Industry advocates are urging lawmakers to continue to replenish the Restaurant Revitalization Fund (RRF), though Kennedy says it appears that members of Congress don’t want to add any Covid-recovery measures to the $3.5 trillion infrastructure spending plan in process, which is focused largely on climate initiatives, paid leave, childcare, education and healthcare. Because funding the spending plan will impact businesses in the restaurant industry, however, Kennedy is urging operators to add their names to Restaurants Act, a grassroots organization for the restaurant industry that is looking to generate broad support from the restaurant industry in order to urge lawmakers to continue to fund the Restaurant Revitalization Fund. (The fund closed to new applicants in May and according to a recent announcement from the Independent Restaurant Coalition, 82 percent of independent restaurants are concerned they may close permanently if the fund is not replenished.) You can join or learn more about the effort to refill the fund at Restaurantsact.com. ![]() The restaurant industry is still trying to climb its way back to pre-pandemic employment levels. According to research from the National Restaurant Association, the industry is still about one million jobs shy of the 12.3 million jobs it offered before Covid-19 hit. Throughout the pandemic, many news stories have said the high rate of restaurant employee turnover was due to staffers’ unemployment benefits surpassing their restaurant earnings. But according to a recent report from Restaurant Dive, the reality is more complicated than that, and a combination of factors are responsible for escalating employee turnover: Among them are a shift of workers into other professions, a shortage of people with cooking skills and increasing reports of abuse on the job. But there are steps restaurant operators can take to help mitigate some of those problems at their own businesses. Restaurant Dive suggests adopting tech tools like on-demand pay apps, which tend to offer more flexibility on pay schedules. Further, it advises operators to be clear in job postings about wages, schedules, benefits, room for advancement, and incentives such as employee referral bonuses. Overall, put yourself in the shoes of a potential employee, who wants to work in a safe environment, understand their responsibilities on the job, be paid on time for shifts completed, and be granted some flexibility if and when their personal lives require it. ![]() Restaurant delivery continues to climb: In 2023, the online food delivery market is expected to balloon to $154 billion from $111 billion in 2020, according to Statista. Are you doing all you can to make sure that as many delivery orders as possible are coming to you from customers directly instead of through third-party delivery apps? Your patrons aren’t necessarily seeking out the DoorDashes and GrubHubs of the world – they are simply ordering via the channel that’s most convenient to them. You can make direct orders more convenient (or at least more enticing) for them when they’re ready to place an order. First, make sure your customers know they can find the best food selection and deals if they order directly from you. Limit the menu options you offer via third-party providers to your highest-margin items – and make it clear on your website, search engine listings and social media posts that people can find a wider variety of food options, lower prices and access to limited-time offers by coming directly to you. When they do visit your website, they shouldn’t have to navigate far to where they place an order. Modern Restaurant Management suggests using a pop-up banner with a link (and perhaps a QR code) that directs them to your online ordering page. On that page, encourage them to join your loyalty program so you can continue to reach them with direct and increasingly targeted offers. Finally, make sure your customers know that they can best support you and your staff in challenging times – and help ensure they can keep their favorite dishes coming – if they order from you directly. Include language on your menu, website and on notes placed in third-party delivery bags that says just that. ![]() Restaurant brands are more reliant than ever on third parties responsible for the last mile between a consumer and the takeout food they ordered. Yet even when food arrives cold or soggy due to a third-party delivery vendor who took too long to reach an end customer, the restaurant – not the delivery provider – is far more often the one to receive the negative review or angry phone call. The handoff is critical and both the restaurant and third-party delivery provider need to be in sync about the importance of protecting the restaurant’s brand in off-premise environments – through accuracy, speed and service. As Geoff Alexander, President & CEO of Wao Bao, said at The Spoon’s recent Restaurant Tech Summit: the “brand transfer has to be the most guarded and respected piece by the brand itself and by the operator to work together.” If your restaurant offers delivery, what do you do to ensure your brand doesn’t lose value when you hand an order to a third-party delivery provider? ![]() Consumers are expecting things to be a bit different as a result of the pandemic – and at a time when supplies continue to be short, labor is difficult to find and customer traffic is unreliable, restaurants can use this expectation to their advantage. Many restaurants already are: Take Michelin-rated Eleven Madison Park, which announced it would be reopening as an entirely plant-based restaurant after its closure during the pandemic. As you have managed your restaurant throughout the course of the pandemic, have you come to conclusions about major aspects of your business that need to change in order to preserve the longevity of your restaurant? Would you be better able to stabilize your menu by making it entirely plant-based? Have you always relied on a dine-in customer base but believe this can no longer be your main source (or even a small source) of sales? Do you think you should serve a different demographic of customers than you did before? Are you too reliant on labor shifts – and burdened by the need to provide higher wages and benefits? Now is a good time for reinvention. Identify your primary pain points when it comes to your supplies, staffing, marketing and day-to-day operations management. By changing things that may have needed changing for a long time, you can give yourself a new story to tell customers, refresh your brand and generate renewed interest in it as we emerge from the pandemic. ![]() There’s plenty of pressure on restaurant prices lately, whether from the increased competition for labor, shortages of key ingredients, or other demands. How have you responded? According to recent research from Fitch Ratings, pent-up demand and fiscal stimulus have driven a recovery in restaurant sales in recent months – and that has enabled restaurants to pass increasing costs on to customers. Plenty of businesses have needed to (think of the restaurants who specialize in chicken wings), but others have hesitated due to the strains of the pandemic on customers in the past year. Where is the line for your customers when it comes to food prices – and what might you do to help smooth it out? Start by analyzing your menu and identifying your most costly and difficult-to-source items. Where might a less expensive or easier-to-source item be substituted? In cases where you need to keep a more expensive item on the menu, where can you incrementally boost the price of another item to help make up for the higher cost? Also consider the demographics of your customer base. According to recent consumer research from RMS cited in Nation’s Restaurant News, most respondents said upticks in food costs, the minimum wage and safety precautions justify price increases at restaurants – with Baby Boomers being most receptive to higher menu prices. Finally, you could consider adding an overall service charge to each order – with a brief, carefully worded message on the menu explaining why you need to do it – and how it ensures your restaurant can sustain itself and take care of employees. ![]() Are you squeezing as much revenue as possible out of your kitchen? Your restaurant technology can help you create a virtual, delivery-only brand – and it’s one way restaurants will be maximizing their existing ingredients, food expenditure and labor in the years ahead. Consider where you have extra capacity to better capitalize on a daypart (or create one where it didn’t exist before), reinvent a dish for a different customer base, use an ingredient more broadly, or make better use of your staff’s hours and skills. Could you create a new brand with your existing resources, then use your kitchen technology to tap into a delivery network and expand your base of customers? ![]() Restaurant sales are up 8 percent over where they were in June 2019, according to NPD Group’s David Portalatin. While that’s positive news for sure, business conditions are far different from what they were in 2019. People are preparing more meals or meal segments at home than they did back in 2019, whether from scratch or from meal kits. The business-lunch and happy-hour set is now spending more days working (and eating) from home, and the delta variant of the coronavirus is causing anxiety about eating out where it didn’t exist before. That may mean that your once-busy urban location isn’t getting as much traffic and that your suburban location is seeing more delivery and carry-out business. It’s more important than ever to know your guests’ habits – where they are eating, when they are most apt to order a restaurant meal, and what promotions would tempt them to buy a meal or drink from you instead of staying home. Treat each transaction as an opportunity to gather helpful data that you can use to plan your next menu item or promotion – or even your next investment in technology or real estate. At every order, are you gathering information on what items are selling the best and what channels those orders are coming from? Are you incentivizing guests to join your loyalty program and analyzing their orders so you know which promotions are most likely to inspire them to return? Your systems for automatically gathering, understanding and acting upon consumer data are what will help you flex with the fluctuations of the current environment – and better weather whatever challenges might arise down the line. |
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