To be sure, there are plenty of gloomy news headlines about the restaurant industry right now – and more than ever, restaurants need the support of their communities to recover. But at a time when it is easy to feel overwhelmed by the multitude of challenges standing in the way of rebuilding business, take heart in the examples of operators who are somehow doing better than ever right now. They are succeeding, seemingly, through a combination of letting go of ego, ignoring the desire to keep items on the menu out of sentiment, being willing to flex to new business conditions each day, and focusing on what people need right now – even if it doesn’t necessarily mesh with the polished brand the restaurant had in its beginnings. Take Alinea veteran Eric Rivera of the Seattle restaurant Addo. A report from Wired details, Rivera has been offering an ever-changing menu of items ranging from $9 food bowls, to meal-and-wine packs, to eat-at-home versions of his 20-course tasting menu during the pandemic. He has even thrown in some Game of Thrones- and Seattle Mariners-themed dinners to mix things up. The constant changes give him some new fodder for social media promotion on an ongoing basis, and people are linked from Addo’s social media posts to its Tock sales platform, which allows customers to order meals in advance (and Rivera to better manage inventory and waste). Addo’s dining room now looks more like a warehouse and the employees who once served a roomful of guests are now staffing in-house delivery for the restaurant.
A recent Forbes article pointed out that before the pandemic, the average person visited a store to buy food 2.2 times per week but, according to Zagat, went out for lunch or dinner 4.9 times per week. Pre-pandemic, were restaurants missing opportunities to create new business streams with customers via packaged foods and products – whether those products were directly related to the restaurant or not? As many restaurants are currently offering specialty food items, housewares, branded products and even everyday household goods like flour to bring in business during the pandemic, these changes are ones that could well be worth making permanent if they can help you build closer connections with your customers. As many people are getting into a cooking rut during the pandemic, could you provide a recipe along with specialty olive oil, sauce, cheese, wine or bread could help them recreate a part of your restaurant experience at home? Partnering with other local businesses to find opportunities to cross-sell products or plan future events can bolster your public perception too. Brand perfection isn’t necessarily critical right now either – your ability to be human and understand people’s needs is most important. Are there hidden revenue streams – or opportunities for community support – that you can uncover right now?
While the news headlines may be gloomy, don’t lose hope – there actually are foodservice operators who are managing to make lemonade from a whole lot of lemons right now. The ones forging a way through these stressful times are getting creative: Wingstop, which is experiencing an uptick in sales right now, is tapping into an oversupply of chicken and offering a free delivery promotion that is driving sales. Farmers Restaurant Group has shifted to a bodega concept that sells meal kits customers can schedule for pickup using OpenTable. Another operation that has nimbly shifted its approach is Front Burner Restaurants, which operates eight restaurant brands in six cities in the southern U.S. At the start of the pandemic, Front Burner had to furlough 4,000 employees, but it quickly shifted gears to create Furlough Kitchen, a non-profit concept that offers one free meal kit a day from its restaurants to hospitality workers who have been furloughed as a result of COVID-19. Through the support of community donations and anticipated federal stimulus funding, the company rehired employees working in its catering operation, as well as some of its hourly employees who take orders, post on social media and carry food out to customers for curbside pickup. Regular customers, suppliers, vendors and others in the community have been generous with donations and other support, and tips are collected into a pool that is distributed on the pay cards of furloughed employees. Furlough Kitchens currently has two locations and expects to open five additional locations from its existing restaurants soon. In a recent Restaurant Business podcast, Front Burner CEO Randy Dewitt said they are currently funded through the next 60 to 90 days. He thinks that finding a way to keep his restaurants open – even if they’re not profiting right now – should help with their eventual recovery. The community goodwill he is building in the meantime won’t hurt.
Want to boost your traffic? Develop a strategy around limited-time offers. According to Technomic, limited-time offers have increased 64 percent at Top-500 chain restaurants and retail businesses in the past five years – and they aren’t going anywhere. But LTOs are not a slam-dunk for restaurants: While they can help brands boost traffic and generate excitement on social media, they can also be expensive and risky for a restaurant, not to mention time-consuming to plan and execute. According to a Restaurant Business report, Brian Hipsher, vice president of City Barbeque, says developing an LTO can involve up to 150 steps for that brand, with phases including ideation, marketing, trial and test, and feedback and survey. Want to boost your LTO success rate? The restaurant software company Eat advises you tap into seasonal appeal, much like Starbucks with its pumpkin-spice latte or the Shamrock Shake at McDonald’s. Make sure your offer is in fact only available for a limited time, since scarcity drives demand. Restaurant Business also suggests pricing the item carefully – you don’t want it to be too expensive for guests to want to try – and using vivid photography, special ingredients and a novelty factor to help elevate an offer over those of competitors. Finally, consider collaborating with a partner to increase your reach, promote your values or demonstrate your efforts to support the community: POS Sector suggests partnering with organic vegetable producers on a limited-time salad offer, for example.
The new year has gotten off to a shaky start across the restaurant industry, according to Modern Restaurant Management magazine’s Research Roundup, which assesses the industry landscape. According to data from Black Box Intelligence based on weekly sales from more than 47,000 restaurants and $75 billion in annual sales, same-store sales growth was down 2.1 percent in December, the worst result for the industry in more than two years. Still, there have been pockets of good news – such as in the family dining segment, which experienced strong same-store sales growth throughout last year. Kids often drive a family’s decision about where to dine – but you don’t have to turn your restaurant into a playground to attract families. If you’re looking for simple ways to boost your family appeal, Restaurant Rockstars advises offering each child a helium balloon (labeled with your restaurant logo) on the way out the door. Host a coloring contest that requires a parent’s email for subsequent contact, then send all applicants a $5 gift certificate to be used on a return visit when they can view their winning entries on display. But even some menu ingenuity – or ideas that appeal just as much to adults as kids – can work. Restaurant Business, for instance, suggests such ideas as offering kid-friendly “flights” of fries, dipping sauces or ice cream in place of alcohol, customizable menu courses or promotions related to local sports teams.
For many restaurant operators around the country, 2019 has been the year of the rising wage. As the restaurant consultancy Aaron Allen & Associates reports, 21 states announced increases for 2019, and several states that already had high minimum wage rates saw major rises. California and Massachusetts saw increases above 9 percent and Maine experienced a 10 percent climb. Further increases are coming in 2020. Can your menu prices alone accommodate these sorts of increases in your labor spending? It’s not likely. To help your restaurant thrive amid labor challenges, Aaron Allen suggests operators assemble a plan that involves strategies for menu development, marketing, labor optimization, brand relevance and rejuvenation, technology adoption and even robotics. For instance, crafting a well-developed menu can lift check totals, increase party size and help you identify opportunities for limited-time offers, upsells and new profit lines. Conducting an audit of your brand and what sets it apart, as well as of your past, current and future marketing activity, can help you fine tune your strategy and avoid overspending. Similarly, if you audit how tasks are completed in your restaurant and what you’re spending on the labor required to complete each one, you might identify ways to adjust your service model or uncover tasks that can be eliminated or handled by technology. Speaking of tech, what processes can you make more efficient and guest-friendly through the use of technology? Could a tech-based solution help you minimize ongoing labor challenges? You may not need to take action in every area but knowing where you stand in these aspects of your business can help you pinpoint weaknesses that can lead to financial challenges down the line – and help you identify and build upon your greatest strengths.
Most U.S. consumers rate their interactions with brands as simply “okay,” according to a Tempkin Experience Ratings report, which asked 10,000 consumers to rate 318 companies across 20 industries in the areas of success, effort and emotion. Not great (though to be fair, there were some food brands that consumers rated highly, including Wegman’s and Subway). On the positive side, though, that result leaves plenty of room for brands to deliver an experience that impresses guests and brings them back. CBInsights, which builds software that predicts technology trends, identified three components that generate positive emotional reactions and enhance the customer experience, turning “okay” experiences into “wow” experiences: sensory marketing, quality time and human connections. Restaurants have an automatic advantage on the first point. CBInsights points out that scents, for example, can trigger memories and emotions – and that consumers spend an average of 15 more minutes in places that have pleasant smells. So the aroma of the apple pie on your menu may have the power to trigger someone’s happy childhood memory (and connect it to your brand). On the second point, quality time, brands are creating immersive experiences that extend far beyond an initial transaction – Taco Bell’s recent launch of a pop-up hotel (featuring not-yet-launched menu items and other promotions tied to the brand) is one extreme example of how this can be done. Finally, brands are using human connections to bond with consumers. As companies delegate more tasks to technology, they are freeing up staff to engage in more face-to-face interactions with customers in order to help them and gather insights from them. How can your brand combine sensory marketing, quality time and human connections to provide memorable experiences for guests?
Do you have a thorough crisis management plan? How much confidence do you have in it? At a time when a single bad experience at a restaurant can spread online overnight, having a step-by-step guide in place can help you respond better in the moment, keep the issue out of the public eye and get back on track more quickly whether you face a severe crisis like a hurricane causing flood damage or a small one like a scathing review on TripAdvisor. To help, first gather input from your team at all levels so you have a handle on the range of scenarios you might face, what actions would be required to resolve them and which stakeholders are likely to be impacted. Draft some simple, clear talking points that can be adapted to each scenario and present you as both in control of the situation and interested in doing all you can to improve it and keep stakeholders informed. Develop a communication grid that includes those key points, the person responsible for delivering the message, and the ideal communication channel for the message. For larger crises that are likely going to end up gathering momentum online, consider proactively reaching out to someone you trust in the media and providing an interview. After the fact, assess what went well with your crisis management effort and what could have been improved so you can update your plan with new risks, stakeholders or talking points to keep in mind. View some additional crisis management plan guidelines and find sample templates here.
Running events at your restaurant can help you generate a reliable stream of income, especially if a shift to more off-premise sales has taken a bite out of your in-house dining sales. But according to the latest Meeting Room of the Future Report from the International Association of Conference Centers (IACC), facilities that host corporate events are lagging when it comes to reducing food waste and being mindful of the environment — and there is a significant opportunity for those who have a thoughtful strategy. First off, the times of a buffet line overflowing with food have passed: In the report, which polled 250 meeting planners around the world, 60 percent of respondents said they consider how well a venue manages food waste before they book an event with that venue. Further, 44 percent of respondents said that in the next five years, ethical operations and sustainable practices will be more important when booking a venue — the only factor ranked more highly was access to interactive technology. To put your best foot forward when working with people who are booking corporate events, take steps now to integrate more in-season foods on your events menu and to buy them in bulk, research and partner with producers who follow sustainable practices, ask about nearby services available to compost/recycle both food and packaging (if you don’t ask, you won’t necessarily hear about them), train your staff to speak knowledgeably about your efforts so your values come through to meeting planners and potential guests, and weave your sustainable practices into your marketing materials. They’re as much of a selling point as your menu.
Restaurants and movie theaters, sports bars and memorabilia shops, cafés and bookstores…Restaurants can seem like natural partners for a wide range of businesses. The promotions you offer through these sorts of partnerships help you attract new customers and streams of revenue. Or do they? It depends on how well the partners suit each other and how well they develop their strategy. A recent Fast Company report advises business owners use several criteria to determine whether another business passes the partnership litmus test. First, focus on your core challenge or goal. Your best partnerships will help you address it, whether it’s tapping into a new market or gaining insights from a tech-savvy business. Then consider how your restaurant’s values mesh with those of the other business —having a shared vision with help you avoid problems down the line. When you map out your strategy for the partnership, make sure both parties understand the other’s goals and try to anticipate potential pitfalls such as increased costs or slower decision making (and how you’ll manage them). If you’re new to this, begin by looking for partners within your own industry who offer products that complement yours — you’re likely to gain the most from these partnerships, whether in insights or other potential partnership opportunities. Finally, consider partnering on a smaller event together before diving into a larger promotion. It will help you understand the other business’s strengths, weaknesses, and communication and working styles before you have made a more significant commitment to working together.