![]() Just weeks ago, it seemed like things were back on the upswing for restaurants. Consumers were eager for a return to eating out and anxiety about gathering indoors was waning across the country. But the rapid spread of the delta variant, and a range of state and local responses to it at both the government and consumer level, has added a new wrinkle to pandemic recovery. For restaurants in various parts of the country, this has meant an increase in no-shows, new rules about the need for vaccines, a lack of clarity on the wearing of masks and Covid-related backlash from the public on restaurant review sites. Communication – to your staff and to your guests – is critical right now. Determine what guidelines you must follow to protect the safety of all, then find friendly, non-confrontational, non-political ways of sharing your approach. Continue to offer multiple options for dining and collecting orders. Expect requests for outdoor dining to continue – and prepare now for accommodating guests outdoors into the cooler months. Consider what to do about no-shows – whether it be charging a deposit on a table or asking for a text or email confirmation of a reservation. Update signage on your entrance, website and social media channels with your approach, indicate that it will likely be changing in the coming weeks, and ask for everyone’s patience as you work hard to keep business going in challenging times. ![]() As much as we all hoped and expected this summer would represent a return to pre-pandemic gathering and eating out, the delta variant has had other plans in store for many parts of the country. Restaurant operators, again, have been put in the challenging position of having to be enforcers of ever-fluctuating state and local regulations – all while continuing to juggle ongoing labor and supply shortages. If you haven’t already, it’s a good time to take a look back at your early-pandemic playbook and identify income streams that might help you weather the current challenges. That could mean posting new products for sale on your website, offering cocktails to-go if allowed in your state, and promoting family-style meal packages for guests who crave your food but aren’t yet comfortable eating out. Consider how your restaurant might adapt to the current situation of local consumers – whether that be a continuation of working from home or the beginning of hybrid work. Try to create stability, wherever possible, for both guests and staff. That could involve sticking with delivery and takeout service only (at least for the time being) or operating on a limited but set schedule. While it may feel like you’re missing opportunities to generate sales, guests and employees alike are likely to value predictability. Your loyalty program may help you here too. Do you want to boost visits on particular days and times? Increase your carry-out business while dine-in business is uncertain? Consider how you can incentivize your most loyal guests to help you keep business humming. ![]() As the pandemic continues, hybrid work arrangements look like they may be here to stay for many – if not most – companies around the country. Global research indicates that 72 percent of corporate leaders plan to offer hybrid models of working. How might your restaurant meet the moment? If your dine-in business lunch traffic continues to be low, could your business find a new way to attract the guests who used to come to you? Panera, for one, has been acting on a new strategy aimed specifically at remote workers. They are offering scheduled group ordering, as well as catering for companies with workers in different places. At a time when companies are trying to navigate how to maintain camaraderie across employee teams that may only see each other for a few days each week in satellite offices, offering a regularly scheduled catered lunch might be an appealing way to make the most of the time employees spend face to face. Or, you could target the large population of consumers working from home. The World Economic Forum said recently that up to 20 percent of the U.S. entire workforce will continue to work from home permanently, up from 5 percent pre-pandemic. If you’re located in an area with condominium complexes where people are apt to be continuing to work from home, offering a scheduled building-wide delivery might enable you to attract lunchtime traffic – even if it’s not in your dining room ![]() As the supply chain is being impacted by factors including labor shortages, extreme weather, gaps in the availability of raw ingredients, and a spike in demand from consumers returning to foodservice outlets, businesses at every link in the supply chain are feeling the stress. At a time when some foodservice operators have been completely dropped by their distributor(s), the strength of your partnerships is paramount. At the time of this writing, the average fill-rate from manufacturers to distributors was running below 85 percent. But the service level for Premier Value 4 members is considerably higher than this average. That is due to the work our distribution partner, US Foods, is doing to rebalance inventory to provide our members with the best possible service. In recent quarterly earnings releases, US Foods and Sysco disclosed their food cost inflation rates: 8.2 percent and 10.2 percent, respectively. To keep this in context, a normal food cost inflation would be in the 2-3 percent range. Value 4 members have protection against this inflation with contracted manufacturer agreements (CMA). CMA’s give access to 350 vendors covering 105,000 products. Over the past 15 years, inflation on CMA products has been half of the inflation of non-CMA products. Our CMA contracts are firmly in place and while we will not know if that 50 percent “savings” rate is less or more until the current hyper-inflationary period has settled, we are confident that using CMA products is your best protection against inflation – and will offer extra security until we return to conditions that feel closer to normal. If you do not have these protections from your suppliers and partners, consider calling Value 4 to see if you qualify for our programs. ![]() Not so long ago, a food truck was often perceived as a potential means for a fledgling restaurant concept to develop a following with the public before launching a brick-and-mortar location, or for a smaller independent restaurant to spread its brand awareness. Now, established brick-and-mortar brands are looking to food trucks as a way of modernizing to suit the constraints of the Covid era. Take Au Bon Pain. Nation’s Restaurant News reports that Tabbassum Mumtaz, the CEO of Ampax Brands, which is the new franchisor of the Au Bon Pain bakery and café brand, considers food trucks – along with ghost kitchens – to be important tools that the brand can use to modernize itself. Research from IBISWorld found that from 2016-2021, the food truck industry has grown at an annualized rate of 7.5 percent, surpassing the growth of the broader foodservice sector. To be sure, food trucks have their disadvantages – at the time of this writing, most small, independently owned food trucks weren’t eligible for the Paycheck Protection Program or Economic Injury Disaster Loans. However, they do offer a key advantage – namely flexibility – that happens to suit the current times extremely well. While the pandemic has decreased demand for food truck business in office parks, it has increased opportunities for it in residential neighborhoods, hospital and grocery store parking lots, and highway rest stops. ![]() At a time when everything from labor shortages to supply chain kinks are posing challenges for operators, doing anything you can to manage and minimize waste is especially important. To be sure, there are plenty of tech-driven solutions designed to help prevent over-ordering supplies, measure ingredients, condense leftovers and reroute excess inventory – but a number of simpler solutions exist that restaurants can start using today. Most of them have to do with skewing small when it comes to portion size and accommodating size preferences. For instance, you can offer a choice of portion sizes and provide smaller container sizes of any refillable items. Make sure that whatever side dishes or even garnishes you’re serving are ones the guest has chosen, so you’re not perpetually throwing away the potato chips and coleslaw you have always served with your sandwiches. Pricing items à la carte can help. The National Restaurant Association also suggests offering guests the option of splitting an entrée or having part of it wrapped to go before it is served. To help minimize waste once your meals have left your establishment, you can provide reheating instructions on food packages to-go to ensure the meal retains its quality as much as possible when eaten as leftovers. ![]() Other than labor, the top challenges for restaurant operators right now are escalating food costs and short supplies, according to recent commentary from Larry Reinstein, industry consultant and president of LJR Hospitality Ventures. (And of course, labor shortages can impact both costs and supplies.) When you look at your operation, where might there be room to flex when the foods you are known to offer are priced out of your budget or are simply unavailable? First, consider what dishes and ingredients on your menu are more variable and adaptable. You may be able to be more flexible with ingredients than you think. Case in point: When Wingstop, which literally has chicken wings in its name, had to keep business going amid a wing shortage in recent months, it offered the alternative of chicken thighs, the National Restaurant Association reports. For every dish you serve, consider how you might reinvent it without a perceived loss of value for the guest – or if you should temporarily replace it until cost and supply challenges shake out. Of course, you may have some room to raise your prices – media reports are spreading the word to consumers that they have not been paying sustainable prices for restaurant food in recent years. But if you must raise prices, look for other ways to elevate the experience you’re providing guests – particularly if you’re already short-staffed and out of popular menu items. This is where the human side of the restaurant business has an opportunity to demonstrate its worth. ![]() Gift cards are a front-of-mind gift-giving option for a vast number of U.S. consumers. The gift card market is worth more than $160 billion and it has been growing by double-digit margins since 2015 – and gift card purchases have been a means of paying restaurants forward during the pandemic. But according to a new study from Incisiv, restaurants are still leaning on old-school tactics when it comes to managing their gift card sales instead of harnessing the data-driven power they can offer. By better connecting gift cards to loyalty programs, restaurants can capitalize on the special occasions that inspire guests to use these cards – occasions that happen to be predisposed to generating feelings of loyalty. The study advises restaurants fine-tune their approach to gift cards in four areas: First, make gift cards a more frictionless experience for guest and employee alike. That means considering such actions as how to minimize the steps/people involved in processing a transaction, or if you can add a gift card balance to a third-party wallet or loyalty account, for example. Second, make it possible to purchase, transfer, redeem and reload gift cards across all of your purchasing channels. Third, make it more personal – like so much of the experience of dining out, customization of restaurant gift cards helps drive loyalty. Do you offer a range of designs for a range of occasions? Sample messages? Can a giver include a special video message or photo? Finally, make recommendations. Suggesting products based on the occasion and the recipient can help you upsell your cards, as well as generate data that can improve your ability to segment and target your customer base going forward. ![]() Summer is here, record-breaking temperatures can be a challenge for operators to do business as usual, or for people to be willing to eat at restaurants outdoors (or even indoors, unless there was reliably cold air conditioning). As we move through summer, extreme weather conditions – whether intense heat, fires or hurricanes that knock out electricity or otherwise impede business – will continue to be a threat to different parts of the country. But if the pandemic taught the restaurant industry anything, it taught us how to flex in response to a changing situation. Now is a good time to review your emergency management plan: If your facility is hit with a power outage, for example, will you be alerted right away? What actions should this trigger with regard to preserving inventory, safeguarding your facility and contacting employees? If a heat wave strains the energy grid and knocks out your air conditioning, how could you flex your service model, hours, menu and staffing to avoid short-term closure? To be sure, many challenges that come along may be out of your hands. But if you can prepare cloud-based back-up plans to guide you through how to shift operations in different potential scenarios, you may be able to ride out the challenges a little easier. ![]() As evidence of their growing prominence in the restaurant industry, ghost kitchens are now getting their own events. In June, the Ghost Kitchen Conference in Dallas addressed this new and growing segment of the restaurant industry and how brands are approaching everything from menu development to digital marketing to site selection. Nation’s Restaurant News reports that ghost kitchens are demonstrating potential and an ability to gain competitive advantage in a few key areas. Service is one. While demand for delivery and off-premise restaurant food is high, the experience of eating this food can be lacking and difficult for operators to control. There is opportunity in the ghost kitchen segment to condense the physical distance between restaurants and customers and also channel more resources into building stronger relationships with delivery providers in an effort to make delivery a higher-quality experience (Fazoli’s, for example, treats delivery drivers to breadsticks.) Because ghost kitchens are small, nimble and flexible, there is also potential for them to push the boundaries of the segment. They can easily plug into grocery stores, airports, hotels or other facilities with a captive audience for restaurant food. Finally, these kitchens are lowering the barriers of entry into the industry. No longer does opening a restaurant require a substantial investment or attractive real estate (though the challenges of marketing ghost kitchens without brick-and-mortar counterparts surely generate new challenges related to marketing and customer engagement). |
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