It’s something restaurant operators have had to prioritize in recent months: making the overall experience they offer feel worthwhile for guests. In a recent episode of the Restaurant Business podcast “A Deeper Dive,” the consumer strategist Lisa Miller covered how consumers perceive the value of restaurants right now – and her research shows that operators may need to keep working to make their experience feel like a good value to guests. In her monthly surveys of consumers, Miller has found that a growing number of consumers feel their restaurant visits are not worthwhile. What’s more, over half of consumers get sticker shock when they visit quick-service restaurants, where prices have jumped 30 percent since the pandemic. She says operators need to make employee training a priority to help deliver experiences to guests that feel worth the price they’re paying. Still, the math may not work out for some restaurant businesses – or it may simply look better if the business model is somehow reimagined. For example, it may not be a coincidence that more restaurant hybrid business models are emerging right now. In recent weeks, the Chicago-based retailers Foxtrot Market and Dom's Kitchen & Market, which offer both fresh meals and groceries, announced they would be merging to form Outfox Hospitality. It’s among the latest examples of foodservice businesses that are trying to continue to offer what restaurants do best while providing options that can elevate home cooking. As more grocery and convenience stores offer higher-quality foods, restaurants that step into this space may be able to showcase the value they offer while minimizing the overhead of conventional restaurant models. Inflation has made restaurant meals a tougher sell for consumers, so the experience of your restaurant carries more weight. In a recent webinar from Datassential, speakers referenced some very different examples that illustrate how restaurants are approaching this. For example, at the Mini Chef restaurant at the Lego House in Denmark, each guest is given a packet of 16 Legos. Each piece in the packet corresponds to a customizable ingredient listed on a simple menu. To submit their order, a guest must “build” their desired combination with their Lego pieces and submit it into a machine at their table that confirms their preferred ingredients. The novelty of the ordering system becomes entertainment – and as much of a focus as the food. But boosting your experience doesn’t require an operational overhaul. Consider one low-tech approach by a restaurant across from a children’s hospital: Guests can buy a beer for a parent or carer of a patient at the hospital and their purchase is marked with a sticker on a sign posted in the restaurant. The free beer can give recipients a brief respite from the stress of a hospital stay and help those buying it feel like they are doing a good deed for someone who needs a lift. When you take approaches like this that are special to your brand, you can get guests in the door. If you then combine them with guest personalization – by collecting data about what a guest has ordered in the past, what they like and dislike, and then making targeted recommendations they are more likely to enjoy – you have a formula to keep those guests coming back. Considering your own community, guests and brand, how might you adjust the experience you offer in ways that have a big impact? In a recent Restaurant Dive report about trends shaping the restaurant industry, Darcy Kurtz, CMO at BentoBox, weighed in about how food inflation is making menus smaller – and driving chefs to be more inventive and flexible with the menus they plan in an effort to operate efficiently. She said she doesn’t expect smaller menus to dampen people’s excitement about dining out, because “the [restaurant] discovery process is becoming more visual. It’s becoming more experience-oriented … that will offset any decline [in interest] because the menu isn’t quite as big as it used to be.” The times seem to be changing the definition of restaurants – and it’s becoming less about the food. Granted, it’s hard for a restaurant with poorly conceived food to survive, but the experience a restaurant offers is increasingly the secret sauce it needs to thrive. And the delivery of that experience is evolving too. As Food Digital reported recently, restaurants are becoming community hubs in new ways – perhaps applying some lessons learned from the pandemic. As they think beyond food, they are increasingly opening themselves up as spaces for events, workshops, community meetings and other gatherings – that also happen to offer food. How might you open your restaurant’s doors and reinvent it as a gathering place in an effort to build your brand and business? At the time of this writing, grocery inflation was still outpacing menu prices, but it was in decline. Consumer Price Index data released by the Bureau of Labor Statistics in February indicated that food-at-home prices increased at an annual rate of 11.3 percent in January, down from 11.8 percent the previous month. Comparatively, prices for food away from home climbed 8.2 percent for the same time period. This pricing gap is, at the moment, giving consumers a nudge to buy restaurant meals. Restaurants may have an opportunity right now to entice guests with limited-time offers that stand out and even push beyond what guests expect from a brand. This can work especially well if you have a new item or service model you’re testing that needs to make a splash and generate some attention. Take Shake Shack, which recently unveiled its $20 Truffle Table experience, a limited-time offer designed around its new truffle-related menu items. It includes a table for two with a white tablecloth, fine china, wine, a milkshake of the guests’ choice, and a selection of truffle-themed menu items. It’s not what guests would expect from Shake Shack – with the possible exception of the milkshake – but it generates interest, feels like a novelty experience, and therefore elevates the offer into something more memorable and special than something prepared at home. To be sure, rising inflation and fears of impending recession are making many consumers want to pull back on spending. But the picture may not be as gloomy as it seems for restaurant operators. As a recent CNBC report indicates, while people are feeling less optimistic about their finances, they are still showing willingness to spend money on experiences – including travel, concerts, movies and drinks – that could easily fall into the “discretionary spending” category. So how can restaurant operators keep this going and ward off a slowdown in traffic as we slide toward a possible recession? NPD Group advises focusing on providing value – and that’s not a euphemism for a lower-priced experience but rather one that justifies the price charged. It’s about carefully tracking how people respond to your prices and promotions so you understand at what point your guests will pull back on buying. NPD Group advises not lowering prices if guests remain willing to pay more, for example, and to adjust pricing as levels of various items in your inventory rebound. Give guests reasons to make impulse purchases. Offering memorable experiences of various kinds can do the trick, particularly as ongoing pandemic fatigue gives people a good excuse to make time to be with friends and family. Finally, continue to monitor excess costs and look for ways to trim them so you can make the most of what you do spend. |
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