Oct 14, 2016
The downturn for most of the restaurant industry continued during September. Same-store sales were negative for the fourth consecutive month and chain restaurants endured another period of declining guest counts. Even restaurant job growth, which until recently had been posting solid gains, dropped considerably. This insight comes from data reported by TDn2K through The Restaurant Industry Snapshot, based on weekly sales from nearly 25,000 restaurant units and 130+ brands, representing $64 billion dollars in annual revenue.
Same-store sales growth for September was -1.1 percent, a decline of 0.5 percentage points from August. “The key driver behind the fall in sales during September was a decline in traffic, which continues to be the biggest challenge for chain restaurants,” said Victor Fernandez, executive director of insights and knowledge for TDn2K. “After improving slightly in August, traffic fell -3.5 percent in September. Traffic counts have fallen by at least -3.0 percent in four of the last six months.”
The third quarter of 2016, at -1.0 percent same-store sales growth and -3.4 percent in traffic, was the weakest quarter since the second quarter of 2010. Year-to-date results also present a sobering picture. Through September, 2016 sales growth was -0.6 percent, driven by a troubling -2.8 percent change in traffic. At the current pace, 2016 would be the weakest annual performance since 2009, when the industry was recovering from the recession….
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Oct 7, 2016
Wrigley Field is more than a baseball stadium. It is a pilgrimage site for faithful Cubs fans and for anyone else serious about Major League Baseball. The second oldest Major League stadium, Wrigley has changed very little in its 102 years. On the other hand, the surrounding Lakeview neighborhood has evolved, and is evolving, at an ever increasing rate. Three new major projects immediately adjacent to the field are hoping to transform the area into a year-round attraction.
Sharing an irregular block with the stadium a new mid-rise tower is well on its way to completion. Designed by Stantec (formerly VOA), the mixed-use office-retail project will be the new home of the Cubs administration and a backdrop for a new plaza. The six-story structure is careful not to be taller than the stadium, and is only slightly taller than the three- and four-story residential neighborhood beyond. The triangular plaza created by the new building and the stadium is expected to be a vibrant public space with programing throughout the year.
“The Ricketts family’s goal is to provide an environment that is community-friendly and has a sense of space that can be a town square for Wrigleyville.” Hickory Street Capital’s vice president Eric Nordness, himself a Wrigleyville resident, said. “That can be everything from family ice skating in the winter and farmer’s markets in the summer and fall, all the way to kid’s theater programs and a maybe a movie series on the large AV screen on the front of the building.”
Along with the office project, Stantec and Hickory Street Capital are also behind a seven-story hotel beginning to rise across the street. The future Starwood Hotel will have 180 rooms, with extensive retail and concessions at street level. Both projects were initiated and backed by the Ricketts family, owners of the Cubs. The office tower and plaza are expected to be completed by summer 2017, and the hotel opening is planned for summer 2018.
Directly across the street to the south of the stadium, another major development has recently broken ground. The Solomon Cordwell Buenz-designed Clark and Addison is going up after nearly 10 years of negotiating with the public over the project’s form and program. Weaving between existing buildings along Clark street, the large mixed-use complex will include a 10-screen theater, retail, apartments, and a recreation clubhouse. Residents of the 148 apartments will have access to a community kitchen, a fitness center, event space, and a business center. The building’s clubhouse will also offer over 5,000 square feet of indoor space and 8,746 square feet of rooftop outdoor space, which includes a pool and spa. The project steps back six feet at the street level to widen the sidewalk for the throngs of fans that pass the project on their way to the stadium.
By 2018, the heart of the Wrigleyville neighborhood will be unrecognizable, except for the constant that is Wrigley Field. Considering the proximity to Lake Michigan, transportation, a major university, and an already thriving nightlife scene, it was only a matter of time before the area around the field was updated. With a new public plaza, and more non-baseball related entertainment, the Friendly Confines will be just that much more friendly.
(H/T archpaper.com)
Oct 5, 2016
The restaurant industry is a notoriously difficult place to do business. There are many reasons why first-time operators fail, but one of the most overlooked factors might just be the simple day-to-day bookkeeping. Understandably, most aspiring professionals, especially those chefs who want to open their own restaurant someday, don’t approach the subject of financial planning with exorbitant enthusiasm. It can be cumbersome work, and a talented culinary leader would probably rather be working on his menu than tracking expenditures. But there’s little doubt it’s a crucial tool for employees at all levels of the industry if they want to survive.
When students walk into my Personal Finance class at The Culinary Institute of America, I challenge them with what sounds like a simple task at first glance: For the next 30 days, financially speaking, track everything that comes in and out. This can be difficult for a lot of people. However, it’s the first step toward setting an honest budget. And having legitimate financial benchmarks can make or break any career, especially one as dynamic as the restaurant profession. In this industry, definitely more so than most, you can watch the bottom line soar and plummet with alarming regularity. This is true of all workers, from a tenured restaurant owner to a first-day server. Given the myriad of fluctuating factors tied to success, such as seasons, sourcing, and changing trends, there are going to be bountiful weeks, and there are certainly going to be difficult ones. With that in mind, understanding how much money is flowing in each direction is vital to developing the foresight to understand what needs to be saved and what should be spent.
Patience is another critical factor that isn’t stressed enough. Trying to do too much, too soon, can be a recipe for financial disaster. Instead of attempting to open a restaurant right out of college, it might be better to accrue some real-world experience and develop a network of positive mentors. I think the perception that most restaurants fail because they don’t have enough start-up capital is misguided. I believe most falter because the owners involved are not paying close enough attention to day-to-day finances. It’s the budgeting and planning part that turns out to be their downfall, not necessarily lacking a stellar bank account.
If this all sounds daunting, the reality is that operators don’t have to be accountants. There are software and third-party options available. Approach with caution and be sure to stay on top of the books, however. No business owner should ever know less about his operation than the accountant does.
Alternative financing is another hot topic. There are relatively new options, like crowd sourcing and Kickstarter, as well as your more traditional methods. I look at it this way, though: Chances are, if a bank turned down your request for a loan you should reevaluate your finances. Being denied credit is a chance for reflection. I always encourage operators to stay away from the quick, high-interest options that will step in when banks shut the door. In that scenario, it might be best to ask yourself, “Is this the right time to do this?” instead of seeking out other lenders.
One financial area where I do suggest seeking outside help is payroll. If a business owner has more than one or two employees, it’s always best to outsource this work. The penalties and interest for filing payroll taxes incorrectly are really harsh, and can be more than if someone files their income taxes incorrectly.
This is also a business where a lot of income goes unreported—and that is stating it lightly. My position as an accountant is to report everything, from the smallest tip to the biggest multi-unit transaction. We spend a lot of time talking about taxes, and it’s a concern that can surely catch up to you later in life.
Like we hear all the time at the CIA, it all comes down to mise en place. This unquestionably applies to finances as well as kitchen prep. Keep everything in order, develop proper habits, and the rest will take of itself. Then, in line with the original goal, chefs can get back to doing what they love most: making food, making guests happy, and, of course, making money.
Cameron Rabe is an assistant professor of business management at The Culinary Institute of America. He teaches the Personal Finance, Corporate Finance, and Intraventure Planning courses in the CIA’s Food Business Management major.
(H/T fsrmagazine.com)
