In an economic climate that remains challenging, restaurant operators must understand what motivates consumers to select one restaurant over another, according to the National Restaurant Association’s 2012 Restaurant Industry Forecast, released earlier this week.
The report, which projected that restaurant industry sales will reach a record high of $632 billion in 2012, offers insight into the minds of consumers, their financial situation and spending patterns following a year when many consumers didn’t feel the economy improved at all.
A survey in December 2011 found that 92 percent of adults described the current state of the economy as either “fair” or “poor,” the same assessment given at the end of 2010.
Their outlook for the year ahead was even less optimistic.
The report found that 3 out of 10 adults said they think the economy will get better in 2012, while a solid majority expect things to get worse (24 percent) or stay the same (44 percent).
That was similar to responses at the end of 2010, when 29 percent said conditions would improve in 2011, and 17 percent thought things would get worse.
On a more personal level, however, consumers were feeling better about their prospects with 33 percent of adults saying their household financial situation would improve this year. Only 9 percent expect their personal finances to get worse.
Read more here >>
[ Reposted with permission from Nation's Restaurant News ]Read More
Expected growth rates for 2012 slightly below sales growth posted in 2011
The U.S. foodservice industry is expected to post sales totaling $631.8 billion in 2012, a 3.5-percent increase from last year and the third consecutive year of positive growth, according to the National Restaurant Association’s 2012 Restaurant Industry Forecast, released today.
The expected sales growth is down slightly from the growth rate of 2011, which totaled 4.0 percent, and looks more like 2010, when industry sales rose 3.1 percent. However, the industry is clearly in recovery after the two years of recession-driven sales declines in 2008 and 2009.
In inflation-adjusted terms, total U.S. foodservice sales are projected to grow 0.8 percent in 2012, down slightly from a 1.3-percent gain in 2011.
“Driven by the continued national economic recovery and consumers’ pent-up demand for the food, service and social outlet that restaurants provide, the U.S. restaurant industry is projected to expand in 2012,” the NRA’s 2012 Forecast stated. “Although both the nominal and real growth rates will be somewhat below the 2011 gains, industry growth will remain in positive territory for the third consecutive year.”
Among U.S. foodservice sectors — from commercial restaurants to health care services — not one segment is expected to post a decline in sales or book negative growth. The foodservice sectors expected to generate the largest growth rates include military services, managed services in hospitals and nursing homes, and what the NRA calls retail hosts, or convenience stores, gas station restaurants and grocery store restaurants.
Increases hit eight states Jan. 1, Washington state wage rises to $9 per hour
Eight states saw minimum wage increases Jan. 1, and Washington became the first state to break through the $9 per hour minimum pay threshold.
Wage hikes tied to cost-of-living increases are scheduled for Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington.
Colorado posted the lowest increase, with a 28-cent uptick per hour to a state rate of $7.64. The highest threshold is in Washington state, where the 37-cent-per-hour increase this year raises the minimum hourly wage to $9.04. Washington has had the highest state minimum wage since 1998, when voters adopted legislation tying the rate to the Consumer Price Index, or CPI.
Bruce Beckett, vice president of government affairs for the Washington Restaurant Association, said the state’s wage rate has gone up every year since, except in 2009.
During boom times, the increases had less of an impact on business, Beckett said, but this year restaurants in Washington are expected to feel the pain of the additional 37 cents – especially as Washington is one of eight states without a tip credit, meaning the state does not allow employers to use a lower hourly wage rate for employees that garner compensation through tips.
In a recent survey of its members, the Washington Restaurant Association found that almost 70 percent of roughly 450 businesses said they would have to reduce hours or shifts, cut employees or drop benefits as a result of the increase in labor costs in 2012.
“Only a handful said they felt they could deal with the minimum wage increase with [increased] menu pricing,” he said.
Washington has, on average, about three fewer employees per restaurant compared to the national average, which Beckett attributed to the higher minimum wage in the state.Read more here >>
[ Reposted with permission from Nation's Restaurant News ]
Over the weekend, I re-read an article called “Moving Upward in a Downturn,” an article by Darrell Rigby in the Harvard Business Review of June 2001. (No, that’s not a typo, 2001 is correct. Yes, we were in a downturn, even before 9/11/2001.) The article contained three basic bits of advice -good advice in a prolonged economic slump. I’ll try to translate this into restaurant sales logic.
1 – Play to win where you are strongest: reinforce your core
Face it, you do some things extremely well and you probably suck at others. If you were good at everything, you wouldn’t be reading this. Pay attention to your weak points. If you serve great steaks and your service is weak, upgrade your service. (There are thousands of books on service, my only advice on service is to read all of them and stay out of the dining room. If your service sucks, it probably begins with your attitude which is very contagious.) Work to minimize weak points; but don’t put too much focus on them.
Focus on what you do well, -what other people think you are pretty good at, -not what you think you are pretty good at. You only have to be the best in your market at 2 or 3 things – you can do that. When you are sure what it is that you are good at, make some noise and promote those things. There are so many opportunities to market inexpensively online. Email to regulars an occasional coupon. Make it good for something worth more than the gas to get them to your restaurant. Make the coupon valid only on slow weeknights. Don’t offer them the crap that you can’t give away; give them something good that they will want to return and buy.
Let them know that you like doing business with them and appreciate it when they come. Yes – continue to search for new opportunities, but remember where your core is.
2 – Treat your customers like fellow combatants who happen to be stuck in the same foxhole
I like the way he worded that. Sometimes we can feel like we are in a foxhole. We are not alone. I am sure that many of your customers feel the same way. Most have felt the effects of the downturn as much as we have. Let them know that you feel it too, but also that you know you are not the sole victim of a crazed economy. Most will treat you and your staff with the same demeanor that you treat them with. (You want to be smiled at: try smiling yourself …this ain’t rocket science.)
Remember, anybody who eats food is a potential customer …so treat all food-eaters like good customers.☺ This is kind of like golden-rule stuff. Funny how that rule keeps coming up.
3 – Shift smoothly into higher levels of growth.
I’ve read the article a few times and I’m not sure that I understand all of the implications of higher levels of growth. I have an idea and that is: maintain an unwavering focus on quality: quality time, quality service and products. These qualities are the primary differentiators between your place and the competitor’s, whether it be Mickey D’s or Chateau d’C-note. So be sure to keep systems in place to maintain your standards when you get busier. No other type of business is more ruined by success. How many restaurants started slowly, got busy because they did something well, and got ruined because they couldn’t do it well when traffic picked up?
So thank you Darrell Rigby for the advice. I’m sure that this advice was written with titans of industry in mind, but maybe we restaurant types can pick up a few granules of business savvy from the big guys.
You really know all this stuff, most of it anyway; but sometimes it slips our mind when we are worried about no-show customers and no-show chefs and broken compressors and disappearing bar tabs and the sorts. So just smile your way through the dining room, stroll over to the cook-tops, and keep stirring them frigg’n peas.
You cannot overestimate the unimportance of practically everything. – John Maxwell
Restaurant Stuff, Memos-Musings http://www.la10duh.com
We all enjoyed being wowed from time to time.
We especially like being wowed when we are not expecting to be. Who hasn’t been dragged to an event that we expected to be a yawner, and have benn pleasantly wowed? It’s nice.
I’ve spent the better part of 20 years managing food service sales reps. In that time, I interviewed hundreds of candidates for those positions. I never looked forward to those days spent interviewing. After the third or fourth interview, all candidates seemed alike. “I really like food and I really like people and I really like to go out to eat so I thought that I’d be perfect.” It was almost as if they had taken the same “sucking at an interview-101” course.
Every so often, I would get wowed. It was a nice change from the normal, Every so often that special person would come in, apparently very sure of themselves, full of positive energy, incredibly persistent, unwilling to get sidetracked, they would even have shades of charisma.
Inevitably, I would hire these people …who wouldn’t? During their first month on the road after training they would open a score of new accounts, usually in places where many would tell us that we already had all the business. Inevitably, however, these folks would be gone in three to five months. This didn’t happen once; this happened once a year. Every time I got wowed, this person would look like a super-star after a couple of months on the job. I would beam thinking that my great judgment had been validated. A couple of months later, they would be gone. What was I doing wrong?
I was hiring the wrong person.
That person who wowed me might do a great job at selling cars or computers or jet engines or sales managers …any selling job where they would need to have a quick and immediate impact. Successful food service sales people build long-term relationships.
You folks who run restaurants, yes, you might get wowed at first and give that dynamic new food service rep an application. But you also quickly get tired of the pushy, unrelenting, “this is the product that will solve your problems” type of sales person. Usually, you are justifiably pushing this guy out the door after a few months.
The person who will win your trust and respect over long-term is not the person who will wow you on the first visit. It’s the person who gives a crap about the customer (you) that (s)he is servicing; who takes the time to learn their customer’s business, their customer’s wants and needs, and their likes and dislikes.
The same sort of thing can happen with a waitstaff: they are your restaurant’s salesperson.
The super-waiter who can upsell an appetizer or dessert, who will relentlessly sell the blackboard specials; they may be wearing themselves thin with your clientele. These are the same people that will get all of the accolades after their first couple of weeks. A few months later, they too are gone along with many of the customers who were wowed by them.
As a patron in your restaurant, I will be impressed, perhaps amused, by this person on my first couple of visits. It won’t take long, however, before I tire of the “antics.” I am here in your restaurant to eat and enjoy the food and atmosphere, not to be sold, or worse …hounded. As a matter of fact, as a customer in your restaurant, I hope to be treated the same way you expect to be treated when doing business with your suppliers. Kind of sounds like the Golden Rule, doesn’t it?
So don’t try to Wow them with your sales pitch, you are probably driving away customers more than driving up the check average. WOW them with your service and food …that will get them coming back. And remember …no butts in seats = no check average = no food cost = an expensive commercial kitchen.
You know all this stuff, but you get so overwhelmed with so much crap that sometimes you can forget the basics. So please, just smile your way back into the kitchen, find a pot with some peas in it, and just stir the frigg’n peas.
The toughest thing about success is that you have got to keep on being a success. —Irving Berlin