In these shaky times for the restaurant sector, many operators are facing steeply lower guest counts and cancelled catering orders as the spread of the coronavirus – as well as fear about its spread – continues to grow. In light of that, there may be some actions you can take to ease the concerns of guests and keep business coming in over the next couple of months. First, these are times when your email list may prove its worth. Contact your customers and share what you have done in recent weeks to help ensure your restaurant is a safe place to dine – talk about your efforts to enhance your standard cleaning and sanitizing procedures, as well as more recent steps you may have taken, such as replacing your buffet with an à la carte menu, monitoring employee health more vigilantly, increasing the distance between tables or limiting seating. Promote your delivery and the precautions you are taking with it – from packaging food more securely or accommodating no-contact food drop-offs. Share similar messages on your website, voicemail system and social media. This is a time when people are becoming more community-minded and are making a concerted effort to look out for people who are at risk – if you have stories about how your employees are helping people in need right now, share them. Finally, look to other income streams – if you sell merchandise such as packaged food products or gift cards, market those items now and partner with other organizations that might cross-promote them with their own products. You can believe that once fears over the virus have subsided, people will be eager to get out of their houses and gather with friends over food and drinks. Plan now to be part of the comeback.
Last year, restaurant prices climbed 3.1 percent year over year, according to the U.S. Department of Agriculture, and they are set to increase again this year between 1.5 and 2.5 percent. If you’re among the many operators that must raise prices this year, consider how you might achieve that without turning off your guests. First, try adding some value to the dishes you serve and the experience you provide. Some low-cost ideas that guests may perceive as adding to their experience could include offering fresh-baked bread or a larger side salad with a meal – or finding ways to make your menu more memorable, whether that means writing a guest’s name in chocolate sauce on a dessert plate or creating specialty artwork in the foam of a latte. Could you do a better job of explaining the quality of the ingredients you use? If guests get some extra detail about the steps you’re taking to provide a quality product, they may not mind paying a premium. If you have plans to upgrade your branding or marketing materials (to include your menu design), make pricing changes at the same time so you’re not simply taking your existing menu and plugging higher prices into it. Next, focus on your loyalty program – if you’re offering your best guests a chance to get something at a discount or for free, even if it is just once in a while, you can make higher prices easier to swallow. Finally, at a time when consumers value transparency, consider sharing your cost dilemma with them via social media or your email list – it helps if you haven’t raised prices in a while and can say you’re not willing to cut corners on quality. Of course, be sure to encourage them to share their feedback about what’s working well and what isn’t so they feel they are contributing to your success.
Looking to streamline your off-premise business? Many restaurant industry experts are placing their bets on ghost kitchens as the future of the industry. They have their benefits: For small brands and large, these spaces can help ease labor and rent burdens, meet growing off-premise demand and help restaurants connect their food with customers quickly. On the negative side, restaurants with ghost kitchens are generally relying on (and paying) third-party providers to deliver food to customers, and in the absence of a front-of-house team, they may also encounter challenges in connecting customers with their brand – unless it’s already well established. As the ghost kitchen industry expands, various models are emerging. Check out this map of the landscape from Spoon to get a sense of where different providers and restaurants are building a presence – and where you might fit in.
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 past decade brought quality restaurants to just about every corner of the country – well beyond restaurant cities like San Francisco, New York and Chicago. This was among the eight trends that New York Times food critic Pete Wells identified in his recent look back at what has happened in restaurants since 2010. This shifting of the restaurant landscape has set the stage for a focus on all things local: Team Four’s corporate chef predicts that in 2020 we can expect more hyper-local food, with restaurants in smaller metro areas driving the push to connect consumers with the foods and flavors of the local region. Your marketing efforts should follow suit. The marketing website jeffbullas.com offers seven guidelines for hyperlocal business marketing: First optimize your Google My Business listing, representing your business in the way people would search for it (not necessarily its legal name). Then offer local content – blogs, videos, articles, graphics, quizzes – and build them upon events or special features of your region. Make your contact information stand out on your site. On Google, categorize your business as local, including structured data mark-up for your business to help the search engine find you. Your site should both help people locate you online and present itself in a way that converts online visits into sales. If you have multiple locations, create individual landing pages for each business location, which will help elevate your appearance in search and improve your local rankings. Finally, use hyper-local advertising, bringing together location-tracking features and geo-fencing to help you direct content to people in a specific location around you – and hopefully lead them to your business.
Food packaging technology is evolving so fast that it’s making plastic cutlery seem almost quaint. A startup called Planeteer LLC, for example, has taken on the challenge of packaging waste and developed a variety of cutlery that isn’t merely compostable but also edible. The company has created a spoon that it promises will hold its shape for 25 minutes in hot soup and 50 minutes in a cold dessert, The Spoon reports. Planeteer cofounder Dinesh Tadepalli said it is vegan, all-natural, rich in protein and composts in days if not consumed. The company will be presenting its product at the Smart Kitchen Summit’s Future Food Competition in October.
Across the restaurant industry right now, profits range from 0 to 15 percent, according to Toast, and profits between 3 and 5 percent are most common. That doesn’t leave much wiggle room for making errors or adapting to industry changes such as the rising demand for off-premise dining. Operators have to be continuously creative when it comes to finding and mining sources of revenue, whether from new products, services or partnerships. (Note the current fervor around restaurant brands partnering with Beyond Meat, with Subway and Hardee’s being just two of the latest companies to tap into the meat substitute’s popularity.) Restaurant Nuts suggests operators consider options such as joint ventures – for example, partnerships with grocery stores to sell your products can help you promote a special offering while lowering your sales and marketing expenses. Or, as All Food Business suggests, you can partner with a corporation to offer expense accounts, business dinners, client programs or events that can generate income. You can align with a business or charity whose mission complements yours if it helps you to expand your audience, offer a special event you wouldn’t be able to offer on your own, or tap into resources (such as technology or delivery capabilities) that benefit both parties. Within your business, building out a catering menu can help you make the most of your food costs (and minimize waste) while serving lucrative off-premise and corporate customers. Depending on your business, there may also be opportunity to offer retail products like clothing or take-home versions of signature sauces that your restaurant is known for.
If you operate a restaurant in or near a college town, you’re in a sweet spot: You have access to a large concentration of food-savvy consumers who are looking for their next meal or snack (and are likely not preparing it themselves). If you deliver food, you’re also more likely to be able to maximize your profits by delivering multiple orders in a single trip. But becoming a campus favorite takes some strategy, particularly if you offer higher-end dishes or are otherwise not an ideal match for a student on a budget. To appeal to the convenience- and cost-driven college consumer, Running Restaurants suggests partnering with the college or university on any programs they offer that allow students to use some of their on-campus dining credits at your restaurant. Encourage word about your restaurant to spread on campus by offering promotions in the campus newspaper, taking part in pop-up food events, and hosting happy hours or other social events. Your online presence is important with this demographic, so make sure you offer online ordering and encourage engagement via social media (your social media handle should be visible on all of your marketing materials). Finally, values and transparency count with this community, so if you have a good story to tell about the local produce you offer, or charities you support, or eco-friendly business practices you have long used, talk it up.
Any chef can confirm it: Running a restaurant well can require the skills of a lawyer, doctor, designer, HR manager, mechanic, janitor, and the list goes on. And that’s on top of having to offer an appealing, in-season menu that can be readily adapted to different nutritional needs. While that ever-changing environment can bring interest and variety to each day, chances are you were drawn to the restaurant industry more because of the food than for your ability to negotiate a beneficial contract or identify the best cleaning supplies. Further, the multitasking often required in a restaurant setting can kill productivity: A University of Michigan study found that when a person attempts to accomplish more than one task at a time, productivity drops by 40 percent. Team Four’s Palette program can serve as an extra pair of hands, taking on some of the responsibilities on your plate so you can multitask less and focus more on parts of the business that suit you best. For example, Palette can help you fine-tune your brand, including redesigning your menu or updating your graphic identity on your website, signage and marketing materials. You can also access restaurant equipment, linens, office and cleaning supplies, along with services for managing waste collection and pest control. And in case your menu or inventory needs attention too, we can help you develop new recipes, identify cost-effective menu substitutions, improve your food safety record and offer negotiated contract pricing to help ensure you’re getting the products you need at the best value. You can access the full list of services included in Team Four’s Palette program at www.palettefoodservice.com.
Rising labor costs are forcing all restaurant operators to make tough decisions about how to manage staff and how to prepare the food they serve. But what happens when the decisions you have to make are central to the brand identity your guests associate with you? Case in point: Chop’t. The fast-casual chain is known for chopping salad in front of the customer, a practice that provides some visual intrigue while sending the message to guests that their food is freshly prepared according to their tastes. But the company announced recently that it would be making the switch to pre-chopped ingredients. (Guests can still have their salad chopped but have to request the service.) Darren Tristano of FoodserviceResults predicts that regular guests could be turned off by these changes — in the short term — but will probably forgive the changes and return to old habits eventually. Just the same, if you’re experiencing a similar need to cut back on services that are central to your brand and important to your best guests, what can you do? A well-executed loyalty program may help you bridge the gap. Chipotle, for example, recently unveiled a new digital loyalty program designed to both give guests what they want and continue to collect customer data that will help the brand feed future decisions that will keep guests engaged. Skift Table reports that the new loyalty program, which was market tested for months, awards guests with free chips and guacamole after one purchase. Each $10 purchase earns guests one point and after $125 spent, guests earn a free entrée. These enticements are encouraging more visitors to sign up for the loyalty program — and share their data in the process. From there, Chipotle can study what factors bring those guests back and make them spend more money, whether it’s discounts on certain items or special promotions. What can you do to keep your guests coming back?