Restaurant work, reinvented
As with so many other aspects of the restaurant business throughout the course of the pandemic, restaurant work is experiencing a period of reinvention – and it’s not all about raising wages. At its heart is the need to manage the work involved in the business so restaurants can offer meaningful roles and flexibly respond to turnover. A recent New York Times report describes how at a number of restaurants around the country, the kitchen hierarchy is being scrapped in favor of a more egalitarian system. This is playing out in a range of ways: At some restaurants, long-time employees are being given profit-sharing opportunities or even a stake in ownership so they have more incentive to commit to the business and help it thrive. At others, responsibilities are being shared more evenly, with employees being cross-trained in functions ranging from events to finance to food preparation – and being given opportunities to contribute ideas regardless of their rank. These steps – which many restaurants took during the pandemic in an effort to survive – are actually good long-term strategies that may make it easier for these businesses to roll with the challenges that come. This will make restaurant teams look different in the future – a smaller crew of higher-skilled employees who can recreate a recipe, manage incoming orders, interact with guests and make financially sound decisions, vs. a larger, more hierarchical team with different skillsets. By elevating the skills of its team, a restaurant can spread its risk more thinly – it won’t buckle if one employee leaves (though employees with meaningful roles are less likely to leave in the first place). Looking at your current staffing approach across your business, have you reverted to pre-pandemic approaches that need to be refreshed? Are there any roles that could be recast for improved post-pandemic resilience?
Even in the best of times, restaurant margins are thin. Challenges related to the pandemic, labor, food prices and the supply chain only place additional strain on them. But the good news is that there are a number of steps operators can take to cut costs without taking anything away from the guest experience. First, ease supply chain-strains by ensuring your inventory goes as far as possible. Encourage precise ingredient measurement across your menu – Modern Restaurant Management advises operators to measure ingredients in grams vs. ounces for a more precise result. Take stock of your energy use and find ways to use it more efficiently – by turning equipment on only at the time it is needed, using energy-efficient lighting, and adopting technology to monitor your appliances so you can be alerted and act quickly if something isn’t working as it should. Be just as mindful of food waste. To avoid having usable food scraps tossed out, Restaurantowner.com suggests eliminating trash cans in the kitchen and giving each kitchen employee a clear box with their name on it where they can place food scraps so managers can minimize food waste being generated from the kitchen. Where possible, consolidate purchases with a single supplier to gain leverage in purchasing agreements. Finally, make the most of the staff you have by scheduling people in accordance with your anticipated sales and traffic each week – your schedule should not be on autopilot
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.
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.
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.
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.
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.