May 2, 2016
Wallace B. Doolin, chairman and founder of TDn2K, predicts big trends coming for the restaurant industry:
Several years ago, I drove around the Phoenix market with a franchise owner who had successfully navigated the build-and-bust cycles in the telecom industry. As we approached busy trade areas, he would point to a bank and say, “There are too many banks.” Next would be car lots, phone stores and, yes, restaurants. Finally, the comment that has rung in my ears for years: “There is too much of everything!”
As I have experienced the ups and downs of the restaurant industry’s growth, that foretelling comment has always ticked in the back of my mind.
Now fast forward to January 2016. As I enjoyed a beautiful morning in Key Biscayne, Fla., with a great cup of coffee and the rare read of a print newspaper, a Miami Herald headline caught my attention: “Record breaking year in Dade County (Miami) for new restaurant openings”.
In my line of work, who needs cream in their coffee with a story to read like this? In fact, Dade County had 627 new restaurant openings in 2015, an all-time high. It was the most of any county in Florida, including the approximately 424 openings in Orange County (which includes Orlando) and 336 in Broward County (home of Fort Lauderdale). In other words, last year almost 1,400 new restaurants opened in just three Florida counties.
This leads me to suggest three big potential trends occurring in the U.S. restaurant industry:
1. Consumers and our restaurant guests
We have been discussing for several years that after the Great Recession the industry would return to pre-recession growth rates. I now question if that will be true. I’m afraid my franchise partner’s vision may be right both from a restaurant industry perspective (too many restaurants) and the consumer mindset of “What else do I need?”
The economy has improved, but industry average same-store sales are still in what we suggested in Black Box Intelligence four years ago, a “1.0 percent world.” Seldom up more than 1 percent or down more than 1 percent in same-store sales, notwithstanding a continual 2-percent to 3-percent increase in average check. More alarming are the negative traffic numbers for the past seven years.
2. Independents and regional operations
Who opened all those restaurants in three counties of Florida? I assure you it wasn’t just the 130+ great chains that TDn2K tracks domestically, representing more than 24,000 restaurant units. It has to be a predominance of independents and regional restaurants that are tapping into the consumer quest — often fueled by Millennials — for the local, the new and the unique.
Like most of you reading this, I grew up in an industry where chain restaurants took share from the independents year after year. Has that changed in the largest and urban markets? My hunch is yes.
The executives of TDn2K’s member companies constantly ask about the growth of independents and regional restaurants and how they impact sales and traffic. Just the initial trial of all those new restaurants has to create a ripple for established competitors. Of course, we know there is a high failure rate, usually in the first year or two, but in the meantime these new entrants steal occasions and share.
3. Workforce and wages
We hear a lot about workforce shortages and wage pressures. Our own People Report data shows increasing difficulty in recruiting and hiring qualified employees and managers, and increasing wages. In fact, turnover rates have returned to pre-recession levels in all segments.
Again, feedback from our members reveals frustration in the quality and quantity of applicants. About wages, several leading restaurant executives have told me that they are becoming more aggressive in their compensation to ensure they can retain their own talent, and steal the top of the market from their competitors. Is this only a function of supply, or are we back to the “too much demand” scenario?
When we review data from Black Box Intelligence, People Report and White Box Social Intelligence, we can’t help but wonder if this is our own canary in the coal mine. Consumers continue to express their frustration with service in White Box Social Intelligence. People Report data records higher turnover and vacancy rates. Both trends correlate with sluggish Black Box Intelligence sales.
These observations bring several questions to mind:
• Does someone have to fail for me to grow?
• What does that mean for my restaurant and my company?
• What could I recommend to readers and restaurant operators?
(H/T nrn.com)
Apr 25, 2016
Timing is everything when you own a restaurant. When do you add seating? Is it time to hire new employees? Does it make sense to extend hours? Is there a need to launch a new marketing campaign?
Managing growth is a challenge for many small business owners—particularly for owners trying to decide whether they should finance that growth. Ian Bramson, owner of Eclectic Kitchen in Portland, OR, suggests asking yourself two questions to determine if it’s time to add staff, additional seating, or otherwise grow:
Do you really know how busy you are?
Like many restaurant owners, Bramson spends a lot of time in the kitchen making sure the food served at his restaurant keeps his diners coming back. He opened Eclectic Kitchen in 2009 with 32 seats and a focus on breakfast and lunch. “We rely on our regulars to keep us busy,” he says.
With that in mind, he adds, “it’s important to step out of the kitchen to get a feel for what’s really happening in the dining room. You can learn a lot from talking to your customers and giving the servers a hand.”
Ian suggests paying attention to how many people you have waiting, and how long they need to wait. “If people are waiting for food, it’s not a good thing,” he said. “If they’re waiting to be seated, that isn’t good, either,” he added.
While waiting is often just part of the restaurant experience, how your restaurant grows can be an important part of how you manage the wait and will likely influence your decisions about whether it’s time to hire a new server or an additional cook. It might also be an indicator of the right time to expand seating or stay open more hours.
He also suggests noting the seasonal nature of your restaurant. “We get really busy in the fall,” he says. “But our sales are up for this time of year, so we’re expecting to be busy this fall.”
Do you have a strategy to accommodate growth?
“We’re planning to increase seating with an outdoor dining area as well as adding more seating inside the restaurant to prepare for the fall,” Bramson says. “We’re also thinking about adding dinner to our menu.”
Bramson has an expansion plan for the next few months and knows that he not only wants to increase the number of tables he can serve, but will need additional staff and refrigeration to accommodate growth in the kitchen, too. “Growth in the dining room impacts everything else in the restaurant,” he says. “You need to plan for that.”
“We really depend on word-of-mouth advertising,” he says. “We focus on really good food and great coffee to make our new customers happy, keep our regular customers coming back and give them all a reason to tell their friends. In addition to food made with fresh, local ingredients, we even use a local coffee roaster our customers seem to like, Trailhead Coffee, to help set the tone for a great breakfast.”
Bramson suggests it’s important for independent restaurant owners to keep your finger on the pulse of what’s happening in the dining room, as well as the kitchen, to know when the time is right to hire new staff or otherwise expand. With that said, you need to plan for how you’re going to accommodate growth when the timing’s right.
(H/T restaurant-hospitality.com)
Apr 18, 2016
Third-party booking sites could pave the way for acceptance of reservation fees, says new study.
Would you ever dream of charging your guests for a reservation? Few restaurants are in demand enough to get away with it. But a study by Cornell University found that while most guests would find the practice “unfair,” a segment of the dining public would accept a fee for reserving a table.
Authors of the study (“Revenue Management in Restaurants: Unbundling Pricing for Reservations from the Core Service”) Sheryl Kimes and Jochen Wirtz point out that table reservations themselves have a value, but restaurants traditionally include that value as part of the overall cost of a meal.
But Kimes (professor of operations management at Cornell’s School of Hotel Administration) and Wirtz (professor of marketing at the National University of Singapore) observe that the reservation itself “becomes particularly valuable at popular restaurants where tables are hard to get.”
Moreover, they say, it didn’t take long for third-party tech startups to recognize this value and make a business of “selling hard-to-get reservations in popular restaurants.”
Kimes and Wirtz surveyed about 300 U.S. residents to gauge attitudes on the topic. They found that “a substantial minority” of restaurant guests would be willing to pay separately for a restaurant reservation.
“We see some acceptance of the idea of paying separately for a restaurant reservation through third-party firms, especially among respondents who said they were familiar with the practice. So far, though, we are not aware of any restaurant that is charging for reservations,” says Kimes. “That said, we anticipate that we may see restaurants adopt this practice as restaurant guests become more familiar with it. This is a logical extension of the revenue management principle of pricing a service to match demand.”
Wirtz says Singapore’s taxi system provides an analogy to paying for tables. “Like restaurants, taxis usually include the value of the reservation as part of the fare that a customer pays. But customers in Singapore are willing to pay an extra reservation fee to ensure that the taxi arrives when they need it. We could see this rationale extending to similar businesses, including restaurants.”
(H/T RH)
Apr 18, 2016
(Via NRN.com) The new year has arrived, and 2016 already promises to be a year driven by consumer demand for nutrient-dense menu choices prepared with clean, locally sourced ingredients and easy-to-use nutrition and allergen information. This growing demand translates into a wealth of opportunity for restaurants to leverage a healthy bottom line. NRN contributor and Healthy Dining president Anita Jones-Mueller asked some industry trendsetters, “What are you doing to ‘healthify’ in 2016?” Here’s what they said.
Anita Jones-Mueller, MPH, is a contributor to NRN and president and founder of Healthy Dining and HealthyDiningFinder.com. This article does not necessarily reflect the opinions of the editors or management of Nation’s Restaurant News.
Dawn Sweeney, president and CEO, National Restaurant Association
“I will be ‘healthifying’ at the National Restaurant Association by instituting walking meetings so that we are walking around outside rather than always sitting during one on one meetings. We are also thrilled to be celebrating the fifth birthday of the Kids LiveWell program in 2016. This fifth year marks a tremendous effort on behalf of participating restaurants — coast to coast — to contribute to the health and well-being of our nation’s children. We are proud that the Kids LiveWell program is helping families nourish their children while enjoying the dining out experience that our industry is passionate about.”
Photo: Chuck Fazio
Tom Boucher, CEO, and Nicole Barreira, corporate chef, Great NH Restaurants
“In 2016, our menu development will continue to focus on providing guests with healthful choices across our three New Hampshire-based concepts, T-BONES Great American Eatery, CJ’s Great West Grill and Copper Door Restaurant, including our children’s menus. Our culinary team defines healthful as dishes and options that provide guests with not only the ‘traditional’ low fat, low calorie and low carbohydrate options, but also dishes created with superior-quality ingredients, scratch-made recipes, nutrient-rich vegetables and grains, along with the freshest locally sourced items possible. All of these elements produce a variety of healthful options that matter to our guests’ individual needs and preferences. As a company and per our culture, we’ll continue to encourage employees to maintain a healthy work/life balance. We have invested in and started to roll out a 2016 leadership training program to further educate and inspire managers to be the best leaders they can be…for their teams, themselves and for the businesses they are running.”
Photo: Great NH Restaurants
GJ Hart, executive chairman, president and CEO, California Pizza Kitchen
“As many of us strive to make healthy choices in our lives and in our diets, the culinary team at California Pizza Kitchen is hard at work innovating with ingredients and techniques that offer full-flavor, healthful menu options. We’re helping our guests ‘eat with the seasons’ by featuring seasonal ingredients on our menu that are at their peak freshness, like hearty root vegetables and citrus in the winter and berries in the summer. We’re also using spices in unique ways, like fennel in our California Roots Cocktail, nutrient-rich grains like farro and techniques like pickling, that amp up flavor in a healthy way. Our guests never have to sacrifice big, bold flavor for the sake of fewer calories or fats in their diet.”
Photo: California Pizza Kitchen
Ype Von Hengst, co-founder, executive chef and VP culinary operations, Silver Diner
“For 2016, I am continuing the journey of fresh and local…it is still the biggest chance in the industry and will be for some time. In addition, I will test more center-of-the-plate veggie items, downsized desserts, and recipes using African and Middle Eastern spices, all of which are becoming increasingly popular. Homemade fruit-based sodas will be a great opportunity to steer the guest away from unhealthy drinks. Non-GMO is on the rise, and I will seize opportunities in this area as well for 2016. Finally, elevating peasant food, like we have done with our Truffled Organic Bison Meat Loaf and Upscale Pot Pie, is on my resolution list for 2016.”
Photo: Silver Diner
George Michel, CEO, Boston Market
“The world is focused on making food faster, more portable and more profitable. Boston Market promises just one thing… to make food good. This promise will continue to define Boston Market’s strategy through 2016 as we focus on serving ‘better for you’ meals that guests can feel good about eating and serving to their friends and family. As part of this, we hope to grow our healthful menu, which currently features 150 meal combinations containing 550 calories or less — it’s among the largest of its kind for fast-casual restaurants. Boston Market will continue to be a proud participant in the National Restaurant Association’s Kids LiveWell program and a strategic partner of the United States Department of Agriculture’s MyPlate program through 2016.”
Photo: Boston Market
Meghan Dwyer, brand marketing manager, Umami Burger
“Umami Burger is resolving to add two to four more vegetable-dominant dishes to our menu for some lighter fare. We are already experimenting with Asian and umami flavors on broccolini, Brussels sprouts and shishito peppers.”
Photo: Umami Burger
Ralph Rubio, co-founder, Rubio’s Fresh Mexican Grill
“I’m looking forward to our new grilled Wild Alaska Coho Tacos and Salads coming to Rubio’s this summer! Personally, I will be playing more tennis, pursuing more strenuous cardio workouts in preparation for my rec soccer season, and eating less meat (chicken and beef) and more veggies. In fact, I’ve recently started preparing my own vegetarian ground meat recipe at home using red chili, garlic and black pepper to add lots of flavor. At Rubio’s, ‘Ocean Goodness,’ whether it’s continued focus on serving quality, sustainable seafood, or creating new, bold flavors like our new Smoky Oaxacan Shrimp, ‘healthifying’ will be a major theme for me next year. Wishing all a very happy, healthy and prosperous 2016!”
Photo: Rubio’s Fresh Mexican Grill
Fred LeFranc, CEO, Results Thru Strategy
“I have been a board member and consultant with Healthy Dining for over eight years. As a result, I have become keenly aware of what I eat and how I exercise. Each year, I commit a week to visit the Ashram Wellness retreat in California for a 75-mile hike and a week of exercise and vegan cuisine. It gives me the perspective and motivation I need to be at my best for a power-packed year.”
Photo: Results Thru Strategy
Nicole Abraham, VP of marketing, Luna Grill
“It is our mission to inspire others to feel good by eating. We genuinely care about our food, where it comes from and how we serve it. In 2016, we will continue to offer many non-GMO items, such as our oils, beef and lamb. We are committed to using antibiotic-free, all-natural, free-range beef and lamb. And we will continue to support locally harvested produce and local businesses wherever possible. Every day we are working to serve our guests organic, pure, real food, and we will continue to do so in 2016.”
Photo: Luna Grill
Rod Silva, founder, Muscle Maker Grill
“Spending more time with my family and exercising outdoors with them through hiking, playing basketball and soccer! I am striving for a more stress-free, family-oriented life starting in 2016!”
Photo: Muscle Maker Grill
Sarah Grover, chief brand and strategy officer, Barfresh
“Our CEO, Riccardo Delle Coste, is committed to offering our customers the best possible blended beverages with the operational ease they are known for. To make 2016 our best year yet, Barfresh is currently consulting with Healthy Dining’s team of registered dietitian nutrition experts to evaluate the full product line for optimal nutrition. We are actively working to minimize added sugars and maximize the amount of whole fruit per smoothie. Barfresh isn’t ‘healthifying’ at the expense of flavor, either — we are planning to build an even better flavor profile by incorporating more fresh, healthy ingredients.”
Photo: Barfresh
David Goronkin, CEO, MyFitFoods
“My Fit Foods offers our employees a 50-percent discount on all of our handcrafted meals. Each meal is full of flavor and also meets our (and Healthy Dining’s!) criteria on calories, fat and sodium. In addition, we have a holistic approach to health and talk to our guests about nutrition, hydration and exercise. We do the same with our employees, so next year we are providing many of our employees with a FitBit to encourage activity and installing refillable water coolers in each location for easy access to water throughout the day. January is a great time to establish healthy habits for the year. This is why every January, many of our Support Center employees and their families, including my wife Joleen and me, sign up for a three-week My Fit Foods meal plan to lose a little weight, boost metabolism and restore natural energy levels. Our meal plans include three My Fit Foods handcrafted meals plus two snacks, so it is easy and convenient to eat healthy without any sacrifice. It’s fun to support one another as we all strive to be a little healthier.”
Photo: MyFitFoods
(H/T nrn.com)
Apr 15, 2016
