Archive for July, 2010

These Days, You Need to Work Locally but Think Globally

July 30, 2010

For those who have been in this business for a while, the idea of working locally but acting globally is an old one which was first introduced to the world by none other than Starbucks Coffee. Those who followed them from early on will remember that Starbucks started life as a single Seattle coffeehouse way back in 1978.

At the time, Starbucks was the epitome of local. They were a tiny café where the owner was often seen hanging out behind the counter and chatting up the customers directly. He had arranged to buy beans from all over the world and brought them into his store where he was able to sell them to discerning customers who understood that coffee was more than just the cup of joe people drank and grimaced at in the morning.

Even then He Thought Globally

While Starbucks really took off as a global powerhouse when Howard Shultz took the place over in 1987 and started bringing the Starbucks brand to other countries, even back when they had just one shop in Seattle, Starbucks was really a global company. They were just acting locally.

After all, Starbucks introduced their customers to the idea of purchasing beans grown in different parts of the world and the concept that different countries could provide vastly different taste sensations in their coffee beans. This was the epitome of working locally but thinking globally.

How This Applies to Your Business

Try to think of ways that your restaurant could benefit from the same kind of initiative that Starbucks took back then. Perhaps you could introduce new dishes from other parts of the world. Maybe introduce common food products produced in exotic places and show your customers that there is a range of difference in flavors. You’re still working locally since this is your restaurant, but you are thinking globally.

For example, an ice cream shop may choose to introduce customers to different flavors of vanilla beans. Or a pasta place may show their local customers why Italian pasta really is the best in the world.

Where is the Restaurant Industry Headed?

July 28, 2010

Where exactly is the restaurant industry heading this quarter?  If Darden, the world’s largest owner of casual sit down restaurants such as  Red Lobster, Olive Garden and LongHorn Steakhouse is any indication, things are starting to look up in a very slow but steady way. The company had a hard time in the beginning of the fourth fiscal quarter; however, they have shown themselves to be finishing the quarter quite strongly.

This in spite of the fact that they’ve had some trouble getting the word out for some of their top brands including Red Lobster, which has proven to be a bit of a drag since consumers grew tired of the advertising quickly. Furthermore, Olive Garden’s advertising simply never got underway to begin with.

Darden is Still Looking Good – The Rest of the Industry, More of a Maybe

The trend in the restaurant industry does seem to be moving in a slow but steady upwards direction. The forecasts from UBS call for a flat to growing bottom line in the restaurant industry with Darden showing better growth than most having made some great strides in May to turn things around and move their brands forward.

Recent Study Shows Upbeat Attitude Amongst Consumers

We reported earlier that a recent study indicated that consumers were beginning to change their attitudes about going out to eat and that they are starting to look for more dining opportunities, albeit still at discount prices, reflecting the overall uncertainty in the general economy.

Restaurants Expect Strong Summer Sales

Because of that study, restaurateurs are expecting to see a fairly good summer where more travelers will be dropping in for meals; however, they are also expecting to spend an increasing amount of their funds on promotions and on discount plans to lure customers inside their doors.

Darden’s Estimates

Getting back to Darden for a moment, they are expecting to show growth for the quarter of between 2-4%. While not the kind of growth that makes industry executives jump for joy, it is still fairly solid, offering good outlooks.

New Study Shows Dining Out is Back and Better than Ever

July 26, 2010

The restaurant industry has been in something of an upheaval for a while since the financial crisis hit a few years ago. There has been an increased interest (or at least it was perceived that way) by Americans to stay home and save a few bucks on the cost of their restaurant bills. However, according to a new study from Market Force Information, that perception is dead wrong.

Americans Plan to Eat Out More or At Least Maintain Levels

The study asked 4600 participants whether they planned to eat out more or less at restaurants over the next three months than they did over the previous three months. 25 percent of the respondents said that was their plan, an increase from just 5 percent when the same question was asked back in December 2009.

Even more telling, when asked whether they planned to eat out less in restaurants over the next three months, just 8 percent of those questioned responded in the affirmative. This compares very favorably with a whopping 52 percent who answered yes to the same question back in December 2009.

All of this in spite of the fact that the economy is still quite anemic and shows few signs of the recovery everyone keeps hoping for.

How You Can Cash In

The same report indicates that there is a growing interest amongst Americans in eating out for breakfast. Replacing the coffee and donut on the go, more Americans are choosing to eat a full meal at places like Burger King and McDonald’s. This has, however, been fueled by these restaurants offering special value menus for the still price conscious consumer.

New Methods of Reaching Customers

The way restaurants reach out to customers has also changed, with more restaurants than ever offering discounts and advertising in social media outlets such as Facebook or Twitter. These methods of reaching out to customers have proven particularly effective with the younger, hip 20 and 30 something crowd who has the most money to spend at restaurants and who are most likely to eat out.

Is Pasta the New Burger and Fries?

July 24, 2010

With the advent of several new “fast casual” restaurants serving pasta as a mainstay of their menus, some analysts think the time may have come for pasta to become a mainstay of American restaurant menus in the fast food world.

Always Available at Slow Food Places

Pasta has always been a staple of the slow food restaurants where diners would sit down to a white cloth dinner table and enjoy heaping mounds of pasta covered in various types of sauces. Even restaurants that didn’t focus on pasta on their menus often offered the Italian food as part of their optional menu. What is new is that this is being done in the fast food market.

Not Quite Kept Under Heating Lamps

Of course, the new pasta places aren’t exactly warming up piles of pasta and keeping them under heating lamps, ala hamburgers and fries. One new place is offering pasta meals custom made to order, using only the freshest of ingredients and all of them organic at that. However, just because the pasta is custom made to order doesn’t mean it’s a sit down restaurant in disguise. This is still a fast casual style restaurant and that’s what’ so exciting about the new pasta places springing up all over the country.

So Should We Add Pasta to the Menu?

If you’re running a fast food place and wondering after reading this blog post whether or not it’s time to start adding pasta to the menu, the answer is probably not. Let’s face it, pasta isn’t exactly what most people think of when they walk into the local greasy spoon. There is a certain kind of fair expected in these places and pasta really doesn’t fit into a place offering fries, milkshakes and monster size burgers.

On the other hand, if you’re looking for a new restaurant concept, pasta may be just the thing you need for your new restaurant and serving it in a more casual, fast food atmosphere may be the way to go.

Make your Menu More Inviting and Try Offering New Salads.

July 22, 2010

More than ever before, Americans are trying to find healthy things to eat. As much as we still love our Big Mac and fries, Americans in droves are looking for salads instead. However, many people feel turned off when they see all that green. Wendy’s has come up with a new idea for salads and it’s one that you may want to try as well.

Try Completely New Menu Ideas

Wendy’s is calling their salads “totally reinvented and they certainly sound like it. Instead of the traditional green lettuce and red tomatoes topped with a piece of chicken, one of the new salads from Wendy’s includes red and green apples, blue cheese crumbles, pecans, cranberries and of course the requisite chicken fillet.

Now we’re not saying to copy the new Wendy’s salad fruit for fruit. Instead, we’re suggesting you get together with your staff and start trying to think of new ways to create salads that never existed before and that will include things people really want to eat.

A Strong Market for Salads

Salads now represent a significant and growing portion of the market for fast and slow food. That’s why virtually every major fast food joint has started offering leafy greens on their menus. However, those leafy greens may never attract the diner who likes things sweet and crunchy. For them, consider using ideas like the ones Wendy’s used. Start creating brand new salads that reflect the tastes of your clientele.

Taste Test First

Of course, before you start selling your new salad creations to unsuspecting customers who may say horrible things about your place if they don’t like them, be sure to test the salads first. Look for friends, family, staff members or regular customers that you know will tell you the truth and ask them what they think. You may also want to hire a professional market research company to test the salads if your budget allows for that.

Is It Time to Start Pigging Out on Hogs?

July 20, 2010

The USDA recently released their quarterly report on the number of hogs available for slaughter, breeding and sowing in the United States. The numbers are showing some improvement over last quarter, with a slight uptick since the previous report. However, the numbers are down overall since the same time last year. That said, some analysts examining the reports say they expect to see the numbers continuing to increase over the coming months due to increased survival rates.

So does that mean you should start adding more hog products to your menus or lowering prices? Well, the answer is a definite maybe…

Down for Now, But Possibly Up Longer Term

The pig population in the United States as of June 1 was 64.4 million head. That’s down 4% from the same date last year, however it is up 1% from March and the numbers look set to continue to rise at a slow, but steady pace.

What it All Means

Right now, Wall Street analysts say that they expect the numbers to continue to rise meaning that there will be a slight glut in the inventory available in the coming months. This should theoretically cause a slight decline in fresh pork prices, meaning better bottom lines for restaurateurs and other food service professionals who use pork and other hog related products extensively in their menu.

So Does This Mean Prices Will Come Down Substantially?

On the one hand, the number of pigs available on the market should increase, theoretically showing a slight decline in prices. On the other hand, the pig population is still at its lowest level since 2007 and the United States is now exporting pork to the Russian market, which means demand should keep up with supply.

The only question is how high the numbers will go. If they go too high, supply will begin to outstrip demand, leading to lower prices. But will that actually happen? As we said, the answer is a definite…maybe.

Is Texting in Your Future?

July 18, 2010

For the younger crowd, texting is as natural as breathing. Children in junior high school and high school over the past few years have tended to send more texts than they have made phone calls. Some of those children are now entering the real world of business. If you’ve got some of them on your staff, it may be time to consider using texting to keep in touch with them. Not to mention that it’s a great way to be in touch with your customers as well.

Texting to Customers

The most common use most restaurants make of texting is to send out notes to their regular customers informing them of the day’s specials or offering them some kind of a special discount in order to entice them to come by and have a meal. If you aren’t doing this yet, there are several websites available that will let you sent text bursts to multiple numbers all at one time, thus allowing you to have a valuable and low cost method of advertising.

Texting to Staff

The newest thing with texting is to send out mass notices to your staff. If most of your wait staff is of the 20 something crowd, then your best bet for making sure they’re all aware of the day’s specials and when there are staff meetings and the like is to simply send them all a text. The same services that you can use to send texts to your customers can just as easily be used to send texts to your staff.

Should You Allow Texting at Work?

The question of course is whether or not it’s a smart idea to allow your staff to use cell phones on the job at all. After all, if they’re getting texts from the boss, they may think it’s okay to be texting on the job. In these cases, it may be best to send out texts before work and make it clear that cell phone may not be used while working and especially not in front of customers.

Get Ready for the Summer Rush

July 16, 2010

The summer is finally here and pretty much every school system in the country has now let out so that means you can expect to see increasing numbers of tourist families showing up in town looking for a bite to eat at a local eatery. Here’s how you can cash in on the summer rush:

Offer Family Friendly Food

It goes without saying that families traveling with children will be looking for a variety of dining options on the road. They’re going to want to see grown up food for the adults and kid friendly food for the kids.

Not every restaurant is suited to both parties–not to mention that some restaurants would prefer that families with young children don’t grace their tables; however, the vast majority of restaurateurs would do well to make sure that their menus reflect the needs of this traveling crowd.

Budget Conscious Menus are Important as Well

“The Great Recession” is still hitting American consumers in the wallet. A recent survey showed that people planning to travel this summer will be looking for cheaper food options when they eat out.

That doesn’t mean you have to compete with the McDonald’s dollar menu, although you may want to consider offering some kind of family specials on your menu in order to encourage these diners to choose your establishment over any other.

Which Restaurants Can Expect to See the Crowds?

It goes without saying that there are some restaurants that will not see the upsurge in family dining and frankly, they wouldn’t want it anyway. The very expensive restaurants in town that cater only to the sophisticated crowd will likely see the same people coming in regardless of whether they offer kid-friendly food and discounted family packages.

Similarly, specialty restaurants, such as the only kosher restaurant in town or the only vegan restaurant in town, while likely to see an uptick in the number of visitors, will not need to worry too much about offering special deals. However, for the rest of us, it’s time to start putting together those summer menus.

Perceived Downturn in Customer Service

July 14, 2010

A recent survey of 6,800 Americans reveals a troubling trend. A majority of respondents believe that the customer service they receive while dining out is becoming progressively worse.

Consumer Confidence Shaky
Bloomberg Businessweek reported that consumer confidence is somewhat fragile as few expect their incomes to increase within the next year and many consumers are concerned about future employment. As a result, consumer spending has been restrained. In fact, according to Bloomberg Businessweek, sales at stores like Taco Bell, Pizza Hut and KFC opened within the last year by YUM have remained unchanged.

Increased Expectations Lead to Disappointment
A survey conducted by Empahtica, Incorporated revealed that 55.2% of consumers within the US believe that customer service within the restaurant industry is on the decline.

According to Empahtic’s Executive Vice President of Client Services, Gary Edwards speculates that this may be due to increased expectations on the part of consumers who are cash strapped and therefore dining out less frequently. quotes Edwards as saying, “With less discretionary spending, people aren’t going out as frequently, and when they do, they have heightened expectations. Even if service levels aren’t truly declining, restaurants maybe evaluated more harshly. There is simply more of a negative sentiment among consumers.”

Service More Important than Food
Meeting those heightened service expectations is a must for restaurateurs as a full 20% of consumers who responded to the Empahica survey stated that good customer service is more important to them than good food. According to the Empathica survey, when consumers visit a favorite restaurant and receive poor service 25% said they do not return to that establishment again. Even worse, they tell others not to dine there as well.

Edwards cautions against simply throwing labor dollars at the issue and instead advises solid training coupled with reinforcing quality service expectations. Edwards explains that working with staff to emphasize those service opportunities which make a difference in the consumers overall experience is essential.

Panera Goes Non-Profit, Seeks to Contribute to Charitable Organizations

July 12, 2010 recently featured an article explaining how getting employees involved in local charitable organizations, fundraisers and other events benefited the restaurateur in greater employee loyalty and lower employee turnover rates. Panera has taken this concept a step further.

Top Performer, Panera takes Radical Turn
According to the company’s website Panera Bread was recognized in 2006 by The Wall Street Journal as the top performing restaurant in the area of one, five and ten year returns to its shareholders.  In fact, since 1999 Panera Bread stock has improved 13 fold, creating more than one billion dollars in shareholder value.

Although stellar in its performance, profitability and share returns, Panera Bread has decided to take a radical turn and opened a non-profit, pay-what-you-wish restaurant in Clayton, Missouri an experiment of Panera’s chairman, Rondal Shaich.

Non-Profit Draws Customers, Builds Loyalty
One month after opening its non-profit in Missouri, Shaich revealed that Panera will be able to cover its costs within a few months. The goal is to generate additional capital that can be used to help charitable organizations meet their goals.

As it turns out, nearly all the customers (between 60 and 70 percent) pay full price for the items they choose at the pay-what-you-wish Panera Missouri location. A small percentage pays a bit more and some pay less or nothing at all, but the concept is building a following and developing customer loyalty.

Creative Solutions
Restaurateurs are coming up with creative ways to attract customers who returned to their kitchens during the height of the recession. For some, this means offering discounts and coupons. Others have found that leveraging the power of social media networks to remain connected with customers is an effective solution. Still others have placed greater emphasis on being involved in community activities.

For Panera, they’re finding that creating a revenue stream to support their favorite charitable organizations is a win-win for all involved. .