The Dollar is Falling and the Bottom Could Drop Out of Many Industries

The U.S. dollar has been falling drastically in value when compared to a number of other currencies in world markets. We’ve touched on it before, but now it’s time to discuss this in detail and how it could affect the restaurant industry.

What Happened

We all know about the recent (and many say current) recession, dubbed the “Great Recession.” Even now, unemployment is hovering in the range of 10% and economists say that the true number is much higher since so many people have given up looking for work or are working in part time jobs when they would really like to be working full time.

In order to help the economy, the U.S. Treasury has been printing money like it’sgoing out of style tomorrow! The Fed (Federal Reserve – the National Bank of the United States) has kept interest rates artificially low in order to stimulate demand.

All these efforts however have caused a drastic reduction in the value of the dollar when compared to many world currencies. The Euro, the Yen, the British Pound – they’re all relatively strong against the dollar.

That’s why so many exporters are having a field day selling to customers overseas. Plus, tourism is up from these countries as well sine our country is a relative bargain for vacationers.

The Bad News

So what could be bad about this you ask? Lots. First of all, a number of countries are now working to weaken their own currencies in order to keep their own exports flowing to the United States. China for example has been keeping the yuan at an artificially low value compared to the dollar in order to keep their exports cheap.

However, as more and more countries try to compete and see who can make their currencies weak compared to the dollar, it becomes in the words of one economist, “a race to the bottom.” At that point, global economic malaise begins to take over. This will have a direct effect on our industry as fewer and fewer people are able to afford to eat out.

Inflation

The other side of this is that the Fed’s current monetary policy may lead to increased levels of inflation, since money is cheap and demand begins to outstrip demand. This would further push down the fund people have for eating out.

All in all, it’s a scary cat and mouse game at times is very reminiscent of the Great Depression. (But keep in mind there are many factors which mean we’re nowhere near a real depression!) And we don’t even have prohibition to get people into the speakeasies this time. Give them good food instead!

Why Your Restaurant isn’t Just About Food

We recently read a new survey regarding restaurant customer service from Empathica.  It reminded us of a story about a girl who used to love going to restaurants, but was always annoyed when her mother wouldn’t let her have tuna fish.

The story was published in the New York Times a number of years ago. It discussed issues of child rearing. The girl in the story loved eating tuna fish in the restaurant, but her mother always refused to allow her to buy it because she would say “you can have tuna fish at home.”

“It Just Tastes Better at the Restaurant”

The woman who wrote the story mentioned that yes, she could have tuna fish at home. However, it wasn’t creamy and loaded down with mayonnaise like it was at the restaurant. Instead, it was dry and “good for you” at home.

The story was brought to up to illustrate the point that when you have kids out at a restaurant, you should allow them to indulge and not be so strict. The story equally points up another issue which is more important for American restaurateurs: It’s all about the experience.

It’s Not Just About The Food!

Even if all you run is a small hot dog stand in the middle of New York City, the experience of getting a hot dog at a New York City hot dog stand instead of cooking one at home is why people are willing to spend the money to buy from you. All the more so when you run a full service restaurant – it’s all about the experience and that’s the main reason people go out to eat.

Of course there are other factors that enter the picture, such as time constraints or lack of any desire to cook. But the primary issue for any restaurateur should be to make sure that their customers have an amazing experience at their restaurants.

Customer Satisfaction can Kill or Carry Your Business

However, a recent survey shows that 52% of Americans are unhappy with the customer service they are getting when they go out to eat. When we see numbers like this, it should scare the heck out of us.  Why? Because it means that the limited discretionary spending money people have is likely going into DVDs, internet entertainment, and frozen pizzas instead of into restaurants.

No one is immune. Horrible—or even moderately bad—customer service can effectively take four stars off of any five-star rating. So, do your utmost to make sure your guests are happy and having a good time. It’s not just a feel good moment. It’s a solid business decision as well.

The Coffee Comeback: Why Breakfast has Become a Meal to Eat Outside the Home

Coffee, in spite of the advice of budget experts who recommend that people drink it at home on the cheap is not only doing well, but is actually showing an increase in sales value.

That’s because more people than ever are going out for breakfast – a meal traditionally underserved by most restaurant chains since it was assumed that the first meal of the day would be consumed at home before racing off to work.

Getting to Work Earlier Means Getting a Decent Breakfast is Harder than Ever

The reasons for the trend are clear: in spite of the fact that the Great Recession has been pushing people to try to save money, people are working even harder to make sure they can keep their jobs so that they don’t have to worry about saving money (at least not as much).

That means more workers than ever are grabbing an early breakfast out before heading into the office, just so they can show the boss how dedicated they are to the cause and thus avoid being the next person to be laid off.

What the “Coffee Breakfast” Means for You

Increasing the selection of morning foods and of course coffee can only be a good thing for most restaurant owners. As more workers decide to eat out, those who get in early on this trend will see the most benefit as people start to stick with their usual routine.

Keep it Fast

The one key component that restaurateurs should be keeping in mind however is that speed is of the essence. Breakfast meals out are not likely to be considered a luxury where people are sitting down for a slow breakfast. Instead, expect customers to be in and out briskly, demanding fast service and possibly even office delivery.

You can also improve your bottom line by offering online ordering where a meal can be ordered through the Internet and then delivered directly to the office for the person to eat a their desk.

How to Use Social Media for Restaurants as Great Recession Comes to an End

In December of 2008, at the beginning of the bleak recession, the New York Times featured an article outlining a trend among restaurant customers: eating in.

The Dark Days of the Economic Downturn
Thank goodness we are beginning to see light at the end of the tunnel as the Great Recession begins to come to an end. During the darkest days of the economic downturn, job loss by the hundreds of thousands was a common, monthly occurrence and consumers scrambled to make ends meet.

According to a 2008 New York Times article, one of the most popular methods was most challenging for restaurant owners: eating in. The article underscored the bleak reality by sharing the results of a survey conducted by marketing research firm Mintel International, which discovered that 60% of those surveyed said they had begun to eat in more and dine out less in order to save money.

Customers Return to Eating Out
Although consumers are beginning to take tentative steps toward resuming their pre-recession habits, including dining out more frequently, improvement is slow. Factors like a nearly 17% food inflation rate and a continuing rise in fuel prices are causing growth to stagnate. Capturing those customers ready to trade their kitchen aprons for cloth napkins at their favorite dining establishment may require creativity among restaurant owners.

Using Social Media to Grow Consumer Base
The rise of social media networks like Twitter and Facebook have caused many business owners to consider how implementing the services could grow their consumer base. Those who have successfully used the networking services suggest:

• Use social networking to create a dialogue beyond the restaurant.
• Use the sites to send information about news, sales and events related to the restaurant.
• Avoid too much sale-pitch related information.
• Cover things going on in the local community.

Using social media allows restaurateurs to connect with those who want to hear from the restaurant. It allows customers to see the restaurant in a new light.