First Quarter Review for the 2013 Restaurant Industry

In comparison to a year ago at this time, sales in the restaurant sector during the months of January and February weren’t quite as good. There’s been a variety of factors influencing the downturn which we will discuss below. That being said, March actually saw most restaurants moving back into positive territory, although consumers’ willingness to spend continued to fall (as indexed by Consumer Edge Research.)

Given the slow start to the first quarter, the opening of the second feels somewhat uncertain, though opportunities to solidify market share and attract new consumers can still be found.

Challenges to First Quarter Restaurant Sales

There have been a number of factors which have influenced the sales for the restaurant industry in the first quarter of 2013. Part of it has to do with the impact of payroll taxes and delays in tax refunds, which certainly hurt consumer spending as compared to a year ago. The bad weather that many areas of the nation have been experiencing over the last couple of months has also played a role in first quarter results.

March seems to have shown a recovery to some of these challenges, but the economic environment continues to be somewhat fragile.  In addition, Easter fell in March this year (as opposed to April last year), which alters the numbers somewhat.

A Look at First Quarter Statistics for the Restaurant Industry

Interestingly enough, during the month of March restaurant same-store sales rose by .5 percent, yet same-store traffic declined by 2.0 percent. In comparison to February, this is positive news (February same-store sales declined by 5.0 percent, and same-store traffic declined by 4.2 percent). In addition, 107 out of 171 DMAs reported positive results, compared to only one such report in February.

Overall for the first quarter of 2013, same-store sales fell by 1.3 percent and same-store traffic declined by 3.7 percent. Consumer Edge Research puts out a report called ‘Restaurant Willingness to Spend Index’, which shows that consumers’ willingness to spend their money came in at 83 for January, 82 for February, and 81 for March.

Turnover Results and Niche Market Opportunities

Analysis of turnover rates for the month of March shows that turnover in management positions is decreasing while turnover in hourly positions is increasing. This makes sense given that everyone is looking for ways to make more money – those who aren’t getting paid enough are going to look elsewhere and those that have good jobs are going to want to keep them. Overall job growth for the first quarter remains right around 0.9 percent.

First quarter sales have also seen an increase in adult-only parties, with many families saying that it is simply too expensive to eat out with the kids. This trend represents an opportunity to recapture the family audience through strategic positioning and brand messages.

All in all the first quarter results are a little disappointing, but many businesses are looking forward into the rest of the year with optimism as our economy continues to improve and people are better able to relax the need to be hyper-vigilant over their budgets and expenditures.

Superfoods in the Restaurant

The last few years have seen a marked increase in a variety of different foods getting elevated to the status of ‘superfoods’. You’ve probably heard all the hype about how these superfoods go above and beyond in terms of the provision of essential nutrients that your body needs to stay healthy. In fact, you may have heard too much hype and are tempted to simply dismiss these foods as passing fads. Do so at your own peril! Superfoods are here to stay, and Americans are embracing them whole-heartedly.

We Live in an Increasingly Health Conscious Nation

Thanks to all of the media coverage about how Americans are some of the most obese people in the world, in combination with new insights about how to stay healthy, our nation’s people are becoming increasingly health conscious. They recognize the importance of proper nutrition and the effect that it has on our performance and well-being. More and more people want to both look good and feel good. It’s no surprise then that they are looking for healthier options on restaurant menus when they eat out as well.

What Criteria Classifies Something as a ‘Superfood’?

When you hear something called a ‘superfood’, you can expect that it means it is packed full of vital nutrients. In most cases the food either has more than the normal level of certain nutrients or it has quantities of nutrients and/or amino acids that are difficult to find elsewhere. That being said, there actually isn’t yet any set, formal criteria to consider something a superfood. As a result, there is currently a wide variety of foods housed under that umbrella and you should conduct your own research to conclude which are genuinely worthy of being additions to your regular menu options.

Superfood Hits from 2012 Restaurant Menus

Thanks to consumer pressure to provide healthier options and pending legislation about the disclosure of calorie counts on the menu, many restaurants have already added a number of superfoods to the menu. Avocado had the largest menu penetration for restaurants in 2012 – appearing on 35.6% of restaurant menus (an 8.9% increase from 2011). Olive oil followed its heels closely with an appearance on 30.1% of menus. Walnuts hit 23.6%, blueberries at 20% followed by sweet potatoes with an 18.6% appearance rate. Other foods such as kale, quinoa, beets, acai, and brown rice all also made substantial gains in appearance on restaurant menus across the nation.

Now, it’s obvious that consumer trends can change quickly in terms of the specific ingredients they want to have available to them when they eat out. While keeping up with these trends is somewhat important, it’s not necessary to try to feature each and every one on your menu.

The specific foods that are going to fall into the superfood category will shift somewhat according to the tastes and fashions of the moment. Instead of trying to follow every one, what is more important is simply the recognition that the current consumer trend for more healthful foods is a trend that is here to stay.

The Benefits of Using Tech Tools to Manage Labor Costs

Balancing your cost of labor against the amount of sales you’re making at any given time is often a big challenge for restaurants. It can be hard to predict whether or not you should keep staff on in preparation for potential customers or send them home to save some money on labor costs.

Fortunately, there’s some great new tech tools designed to not only address this issue, but provide a wealth of other information as well. It’s called POS (point of sale)-based scheduling software, and if you’re not using it yet, you should be!

Restaurant Staff Scheduling Becomes Streamlined

When utilizing POS scheduling software, you no longer have to deal with irritating questions such as, “Do I work today?” Instead, you send out an approved schedule via email, text, or smartphone push alerts letting everyone easily stay on the same page.

Even better, if employees want to switch or trade shifts, it can’t happen without management approval and once the change is made it’s sent out to everyone else on the team immediately.  This system also helps to keep overtime in check as well as assisting your ability to stay within your labor budget. You can see how effective a communication and planning tool this can become for your team.

POS-Based Software Boosts Your Bottom Line

Along with making scheduling far more convenient, POS scheduling software also keeps track of information such as historical sales data, labor expenses in real time, and labor to sales percentages. This information can help improve predictive scheduling, control costs, and catch mistakes as they happen so that there are no surprises at the end of the week.

Above-store access allows district managers to view multiple locations at once, in real time if they wish, to see how closely actual costs are paralleling budget targets. This wealth of information is particularly useful in fine-tuning the actions of your managers. For example, if business has dropped off at 2:00 but the manager has kept everyone on until 3:30, it’s easy to see the impact of that choice.

Generate Forecasts so that You can Better Predict Staff and Sales for Your Restaurant

The final major benefit of implementing POS-based scheduling software is that it can utilize your historical sales data, labor budget, current events, and even extraneous factors such as the weather to help determine the amount of staff you should keep on during any given time frame. Managers who have a forecast of sales revenue handy are better able to schedule labor accurately for all positions and wage levels. It makes them more conscious of scheduling on a focused basis rather than just letting a shift ‘happen’.

Now granted, this technology isn’t fool-proof. Utilizing it effectively still requires some gut instinct on the part of your managers, but when used as a guide it can be a very powerful tool to both streamline your restaurant’s business as well as give you some clear insights on how to best manage the cost of your labor against the amount of money your business is actually bringing in.

Leveraging Facebook to Drive Sales and Increase Customer Loyalty

By now it’s old news that every business should have a Facebook presence. That said, many businesses continue to flounder in terms of garnering any real results from their pages. To simply have a presence is not enough – nor is attempting to use your page as a mere placeholder for advertisements. You’ve got to have an effective strategy to engage your audience and get them to take action. When it’s done properly, Facebook pages can be a particularly powerful tool for restaurants to both build their customer base AND drive sales. Here are the highlights of how to do just that.

Post Messages that are Fun, Engaging, and Speak to What Your Customers Value about Your Restaurant

Having an effective presence on Facebook means that you have to walk a fine line between providing content that is entertaining versus content that is brand-relevant. You go too far in either direction and you end up, quite frankly, wasting your time. It’s important to consider what your customers really value about your restaurant – not just menu items they might like, but what makes your establishment stand out from the crowd for them. Figure this out and you’ve got your starting point for posting content that is both engaging and relevant to them.

Take a Note from the Big Guys’ Facebook Campaigns

The fastest way to get an effective Facebook campaign up and running for your restaurant starts by checking out what is really working well for other businesses. Chain restaurants have been particularly good at creating effective social media campaigns. In fact, it was just 14 brands that produced the top 100 Facebook posts by restaurants with the most likes, comments, and shares in the first quarter of 2013.

Spend some time investigating brand pages such as Applebee’s, Starbucks, Taco Bell, McDonald’s, Papa John’s, The Cheesecake Factory, Subway, and Red Lobster to get some great ideas about strategies you can implement on your own restaurant’s page.

Facebook Graph Search Changes the Game

Facebook Graph Search was announced at the beginning of the year and promises to be quite a game changer in terms of how people find your business through online search. The idea is that a person can look for say, a nearby place to eat, based on the likes and recommendations of their Facebook friends. The kicker is that the search results for Graph are based on a variety of factors including the number of likes, virtual check-ins, location in relation to the searcher, number of friends’ photos tagged to your restaurant, reviews, etc., and what shows up for one person will be totally different with the next.

Fortunately Facebook Graph Search is still in beta, so you’ve got a little time to get all your ducks in a row and optimize your pages appropriately so that they show up in Graph search results. Facebook Graph Search is going to become a major pillar in how Facebook presents information about businesses, so it would be a savvy move on your part to get started now and get an edge on your competition.

Methods of Communicating With and Luring In Cautious Customers

Our economy over the last several years has created a lot of fear and anxiety for both customers and businesses alike. That said, as a restaurant owner it’s important not to cut back on your marketing budget, but rather to simply shift the types of marketing messages you are putting out. Doing so will not only help your retain your customers when the economy shifts, but can actually go a long way toward branding yourself as a positive, responsible establishment which people truly enjoy patronizing.

Shift Your Marketing Message to Reflect the Minds of Your Customers

Even after the recession lifts, customers are unlikely to return to the willy-nilly spending habits of years gone past. That said, a reduced price on your menu items is far from the only (or even the best) way to catch your customers’ attention. In fact, you need to be careful about marketing based on discounted price points, or you may forever relegate your establishment to being associated with ‘cheap’.

A smarter way of marketing to your more cautious customer base happens when you not only acknowledge their mindset, but also give messages that resonate with them in a positive way. Rather than making your message just about price (which can inadvertently remind customers of how hard up they feel), it’s smarter to emphasize value.

For example, you could draw their attention to menu items which could serve as two meals allowing them the convenience of not having to deal with tomorrow’s meal prep. Or, you could emphasize the opportunity to spend more quality time with the family by eating out, rather than having to waste that time on shopping, cooking, and cleaning.

Emphasize Responsibility in Your Marketing Messages

Given our economic circumstances, the word ‘responsibility’ is particular resonate with the average consumer. Gone are the days of gaudy extravagances and in their place consumers want less excess and more discipline and sustainability from both themselves and the businesses they patronize.

When you consider a ‘marketplace of responsibility’, picture upscale styles and experiences delivered with moderation and class. Going ‘local’ is one way to demonstrate your commitment to responsible practices, and is something that many consumers consider when making their choices about where to eat and shop.

Get Creative with Your Marketing Appeal

There are numerous ways that you can creatively appeal to your newly cautious consumers. Aside from simply providing positive (don’t remind them of the bad times), responsible and value-based marketing messages, you can also appeal to your customers’ need to have some control in terms of both finances and food choices. Letting customers order the portion sizes they want, being flexible about what they can substitute, and showing them how to find better value in your menu all serve to give customers feelings of comfort and control and end up creating loyalty to your establishment.

The take home message here is that while today’s economic situation does dictate some changes in behavior, the opportunity to attract more cautious consumers still exists through the appeal of value, experience, and quality.