For restaurants, the past couple of years have been a study in becoming more flexible: learning how to scale up in certain areas, scale down in others, adopt new streams of business and change service models based on the evolving lives and habits of guests. While pandemic challenges are waning, economic challenges remain: According to recent data from the National Restaurant Association, 85 percent of operators say their restaurant is less profitable now than it was in 2019. While the specific challenges facing the industry are changing, the need for flexibility is not. Restaurant brands that gave up their dining rooms a year ago in an effort to accommodate more efficient delivery may now find themselves being passed over as consumers seek out restaurants for special dine-in experiences. Dissecting your brand may help you get to the root of what your restaurant needs to offer to more easily navigate uncertain times. What qualities are at the heart of your brand? Sustainability? Comfort? Fresh, in-season ingredients? Consider how you can best serve your guests using a range of approaches and vehicles. From your website, to your dining room, to food trucks, to partnerships with convenience stores, delivery companies, e-commerce companies or other industry segments, how can you offer the experience of your food in ways that allow you to reach guests efficiently and flexibly – and regardless of the current economic obstacles that may stand in your way?
If your curbside pickup business has become an important stream of business for you in the past couple of years, you may be seeing some increased competition from not only fast-casual competitors but also convenience stores. According to research from the National Association of Convenience Stores, 38 percent of c-store operators plan to expand app-based ordering and payments, 32 percent plan to expand mobile ordering for in-store pickup, and 14 percent expect to offer more ordering options at the pump for in-store pickup. As food options available at convenience stores improve, restaurants will need to find ways to differentiate themselves – or even partner with these businesses to capture sales from customers on the go.
While ghost kitchens took off during the pandemic when dining rooms were closed, their popularity began to cool over the summer as more consumers either returned to restaurant dining rooms or reigned in their spending on delivered meals. As a result, while ghost kitchens continue to grow, they are growing at a slower rate than they were. Mott Smith, cofounder and CEO of Amped Kitchens, recently said he is fielding more calls from real estate brokers looking to sell poorly located ghost kitchens – particularly those that aren’t able to adapt to multiple sales channels. (Ghost kitchens that operate as food halls with delivery functionality have been more successful in capturing traffic.) How times have changed once again – and have again demonstrated how important it is to build flexibility into your business model. In the meantime, what will become of the ghost kitchen facilities that have accumulated in less-appealing locations? Restaurants looking to test new concepts or launch additional franchises may be able to find reasonable deals, including hourly and daily lease terms, on shared commercial kitchen space. The benefits of these spaces remain: Newer franchises can benefit from the skills and expertise of more seasoned franchises operating out of the kitchen, all while avoiding the costs and responsibility of real estate when trying to launch a new concept. While ghost kitchens themselves are evolving, they may still be able to help traditional restaurant concepts evolve.
Restaurant culture is a frequent news maker right now, and as evidenced by the popularity of the drama series The Bear, it’s a source of entertainment too. Against the backdrop of workplaces of all kinds being reinvented to suit employees, restaurants – and their reputations as high-pressure environments that can be tough on employees – are coming under increased scrutiny. Changing the industry’s reputation for the better can start with individual restaurants making decisions that support career longevity so you can retain the staff you currently have. As we approach the time of the year when seasonal illness begins to ramp up and holiday gatherings are being planned – both of which put additional strain on restaurants – give your culture a health check. Take care of your team by regularly giving them an outlet to share feedback and ask for support or help without judgment. Make sure they have time and space to rest between shifts. Review your policies for sick leave and overtime so you can anticipate challenges and make fair decisions. Train staff regularly to keep them motivated and engaged. Get to know them as people. As part of your daily conversations, ask what they’d like to learn and encourage them to set written goals to prepare them for positions of increasing responsibility in your business. Give them incentives to keep going by rewarding the stand-out performance of individuals and teams. Then make it worth their while to stay – through a bonus or other benefit for those who stay past a certain period of time.
Back in August, a survey of restaurant operators by the National Restaurant Association found that 65 percent of respondents did not have sufficient staff to meet guest demand. That means there are a lot of restaurants having to streamline tasks, adopt new technology to offset labor loss wherever possible, and make tough decisions about where employees are truly needed most in the business. If you’re struggling to do as much as possible with far fewer staff resources than would be ideal, start with that last point. Considering the people you have available to you, what is the most important function for them to serve? Talk to them about how their skills can best support the business in those places. Then get creative – or even ruthless – about making changes in other places. A recent Reuters report indicated that restaurant brands are taking such steps as introducing new equipment that can accelerate or automate aspects of cooking and cleanup, using more speed-scratch ingredients, and changing preparation procedures so that any time spent waiting for food to cook is time spent completing tasks that previously would have been handled separately at the start of a shift. Scrutinize any wasted labor at each step of a shift. When you look at the preparation of each menu item and your needs to keep your operation clean and safe, where is there room to optimize the staff resources you have on hand? Across a shift and across a restaurant chain, all of those labor efficiencies add up. You may be able to operate with less staff than you had previously thought.
As the weather cools, you’re likely to experience a shift in guest preferences and expectations when it comes to your available seating, both indoors and out. While many of your guests may have put the pandemic behind them and are happy to eat inside, others may be looking to avoid mixing with others indoors and expecting your outdoor seating area to be open. Now is a good time to give your cool-weather plan a review so you can readily tell guests in advance (on your website, reservations platform, phone line and other places where you provide information about your restaurant) whether your outdoor seating area is open, as well as share any adaptations you have made to make the area more comfortable in chilly weather. After all, in an era of abundant plexiglass and dining bubbles, outdoor dining in cool weather can look very different across restaurants. While you’re at it, consider the comfort and safety of your outdoor furniture – including replacing aluminum chairs that are icy to the touch or using blankets to warm them up, covering or securely storing outdoor furniture overnight to protect it against inclement weather, and clearing away leaves, twigs and other debris that may collect on your walkways and cause a tripping hazard.
Labor needs have been soaring at restaurants, but you wouldn’t know it by looking at enrollment in culinary schools. According to a recent Washington Post report, the Culinary Institute of America now accepts 97 percent of all who apply, up from 36 percent two decades ago. Over the same time frame, the percentage of students who ended up enrolling dropped from 91 percent to 33 percent. To be sure, the low pay in the sector relative to the cost of culinary education, the strains of the pandemic on the industry, and increased prioritization of flexible work schedules, paid sick leave and health insurance haven’t helped those results. The industry’s labor challenges are expected to persist: The Bureau of Labor Statistics projects that the need for chefs will climb 25 percent from 2020 to 2030 as compared to an 8 percent average projected growth rate for all occupations. All that said, there is a silver lining for those looking to enter the industry – and for restaurants looking for motivated staff. The current conditions may provide aspiring chefs with the opportunity to get on a faster track to higher-level positions in the industry. One restaurant manager quoted in the Post report said jobs that once required a person to pay their dues over 10 years or more might now be achievable within three to five years. Candidates for these jobs may not come from the country’s top culinary schools but from high school culinary programs or other alternative programs that give students a taste of restaurant work and may spark some motivation for developing a career in the industry. Restaurant operators may have to mine for talent in new places and develop more in-depth training programs that provide education on the job in exchange for work provided. But at the same time, these efforts may also help transform how restaurant employment is perceived by the workforce, elevating restaurants as places in which a person can build a long-term career.
Limited-time offers are a critical tool for restaurant operators right now. While most restaurant brands won’t be so lucky as to land on the next Pumpkin Spice Latte or Shamrock Shake, LTOs still bring benefits that are especially helpful in uncertain economic times. They can motivate guests to return more often, inspire loyalty by helping your most frequent guests build rewards more quickly, and help you innovate on a shoestring by providing you with a vehicle for testing new ideas. They can also help you stay front-of-mind with guests throughout the year by giving you a regular stream of content to promote. Holidays and changing seasons can provide natural inspiration and launching points for new LTOS. Even the best idea won’t take off without a plan to help it succeed, however, so lean on your marketing and communication tools to generate awareness and interest. Get the word out about each LTO on your email list and provide an exclusive offer around it. Design a contest to generate buzz on social media around your offer, and make sure that all promotions — email, social media and in-store — link back to up-to-date information on your website. Make it easy for guests to get more information about your offer by using a QR code on all materials and linking it to key information on your website. Throughout the process, collect data on the response from guests that you can analyze in an effort to both feed your future plans for LTOs and also course-correct where needed.
Enticing guests to splurge or treat themselves can be a tough sell when consumers are pinching pennies. But people still have to eat, so reinforcing the value you provide — not necessarily the low prices but the quality of the overall experience — can make coming to your restaurant a justifiable expense for guests. A recent report from Modern Restaurant Management shared how a range of different brands have been promoting value to guests, including a $5 off dine-in offer for a limited time this summer in an effort to help guests pay for gas, and an “inflation relief” menu that slashed prices by as much as 75 percent for a limited time. Offering discounts can only happen for so long at a time when restaurants themselves are also straining to eke out profits, so whether you’re cutting prices for a limited time or not, it’s just as important to think beyond the monetary value you provide. As you plan your promotions in the months ahead, think of the value you’re providing from different angles. Maybe you can help your guests solve a problem, like the offer above that helps guests pay for gas. Perhaps you can offer social value by bringing people together at a happy hour or other event. Maybe your brand is one that can offer psychological value because of the care you take in offering healthy options or your commitment to sourcing from sustainable suppliers. Weaving several kinds of value into what you offer can strengthen the offers you provide. Your efforts don’t have to be elaborate: Even a simple thank-you message to guests on your website and social media can help boost the good will that brings people back.
When so many supplies are scarce and restaurant operators are facing mounting pressure to source popular menu ingredients or suitable substitutes, cutting corners on sustainability is understandable. But increasingly, consumers hinge their spending on the degree of trust they have in the ethics of a business. Further, any sustainability risks within your supply chain could damage the value of your brand, impact your ability to adapt to change and make it difficult to remain in business. Being clear about your own mission and values can help you communicate them to suppliers, employees, investors and customers — and help you hold yourself and others accountable. In a recent report from New Food Magazine, Rick Sanderson, founder of the STAR Index ESG Platform, advises brands to focus on four P’s to gauge their starting point in this effort and to actively monitor progress: people, politics, platforms and partners. Do you have people around you who can adapt to ever-changing conditions and who ideally bring some external insights to their work? Are all departments and influencers in your business aligned in their willingness to adapt to changes, or do you have skeptics who need to be persuaded? Do you have the technology platforms needed to monitor and measure your progress, as well as to communicate with customers, suppliers and other parties? Are you aligned with partners who can help support your strategy and objectives — and who are motivated by their own mission to improve sustainability?