Across the restaurant industry right now, profits range from 0 to 15 percent, according to Toast, and profits between 3 and 5 percent are most common. That doesn’t leave much wiggle room for making errors or adapting to industry changes such as the rising demand for off-premise dining. Operators have to be continuously creative when it comes to finding and mining sources of revenue, whether from new products, services or partnerships. (Note the current fervor around restaurant brands partnering with Beyond Meat, with Subway and Hardee’s being just two of the latest companies to tap into the meat substitute’s popularity.) Restaurant Nuts suggests operators consider options such as joint ventures – for example, partnerships with grocery stores to sell your products can help you promote a special offering while lowering your sales and marketing expenses. Or, as All Food Business suggests, you can partner with a corporation to offer expense accounts, business dinners, client programs or events that can generate income. You can align with a business or charity whose mission complements yours if it helps you to expand your audience, offer a special event you wouldn’t be able to offer on your own, or tap into resources (such as technology or delivery capabilities) that benefit both parties. Within your business, building out a catering menu can help you make the most of your food costs (and minimize waste) while serving lucrative off-premise and corporate customers. Depending on your business, there may also be opportunity to offer retail products like clothing or take-home versions of signature sauces that your restaurant is known for.
Want to win over customers? It’s not about having mouth-watering new specials or transforming your marketing strategy. It’s all about your operations. (At least that seems to be the trend based on recent performance results of a number of major brands.) As reported in Restaurant Business, brands including Dunkin’, McDonald’s, Starbucks and Wendy’s have prioritized operational changes over menu innovation in recent months. Wendy’s has focused on eliminating tasks and training employees to improve speed of service. McDonald’s continues to experiment with automation and has held competitions to find ways to serve guests faster. Dunkin’ has streamlined its menu and changed the layout of stores to improve flow of operations. As for Starbucks, third-quarter same-store sales increased 7 percent and store traffic increased 3 percent, due to what the company says is its focus on simplification – reducing the tasks that need to be completed in-house and shifting employees’ focus to guests. How can you simplify your operation – both with and without technology – to deliver better service?
If you feel like the rising costs of ingredients, labor and transport give you no choice but to raise prices at your restaurant, you might take comfort in knowing that across the country, brands are following through and raising prices -- and customers (so far) aren’t blinking. As the Wall Street Journal reported recently, Chipotle, which raised prices last year, experienced a 10 percent rise in sales largely as a result of bigger orders. Mondelez and McDonald’s have been experiencing similar results after boosting prices. While talk of a recession looms, U.S. consumer confidence is still at near-record highs since the recession, according to the Conference Board. If you need to raise prices in the coming months, find ways to make consumers feel it’s worth their while to pay you a visit. Link your price increases to discounts and other promotions, particularly for your most loyal guests. As Psychology Today reports, those deals tend lead to greater overall spending – an item regularly sold at a stable, discounted price will seem more valuable and worthwhile when the price is raised and a generous coupon is offered to offset it. Be strategic about the promotions you offer. As Toast advises, for a promotion to be most successful for your business, you should take time to understand your target customers and tailor promotions to what motivates them; address the business operational challenges you face (and which your point-of-sale system – not your gut -- will best help you identify); tap into local media, which can broaden awareness and interest well beyond the time frame of your promotion; and know your margins so you can bundle items that will lead guests to try higher-margin items on your menu (i.e. offering free fries with every milkshake purchase is better than simply giving away fries).
Long a trend setter in the delivery space, Domino’s is now going national with its use of e-bikes to boost delivery efficiency, according to a QSR Magazine report. The brand, which announced a partnership with e-bike company Rad Power Bikes recently, had been testing electric bikes in markets including Miami, New York and Houston and saw improvements in delivery and service as a result. As third-party aggregators vie for restaurant delivery customers, Domino’s has sustained its use of an in-house delivery team. While that can be a financially beneficial move for a large brand, the introduction of delivery via the Rad Power e-bikes, which have integrated motors that assist with pedaling up to speeds of 20 miles per hour, may enhance that efficiency further. Domino’s reports that there have been labor benefits from being able to hire candidates who don’t have a driver’s license but can use a bike, as well as team satisfaction benefits from workers who had been delivering via bike and can now get an extra boost when pedaling up hills with the help of a motor.
Hepatitis A has reached outbreak status across the U.S., with new cases ranging from Florida to Washington state, Food Safety News reports. The Centers for Disease Control say the liver disease can spread most easily through the ingestion of food that has been contaminated with the feces of an infected person, as well as through uncooked (or not thoroughly cooked) food that has been contaminated. Many of the restaurants where the disease has been present have closed temporarily for employee vaccination clinics, but the best way to prevent the spread of the disease from the start is through – surprise – thorough and frequent handwashing, as well as by ensuring employees don’t work when they are ill. Be aware of such symptoms as jaundice, nausea, diarrhea, vomiting, stomach pain, low appetite and fever.
When a food delivery order leaves your restaurant, how confident are you about being able to keep that food safe en route to your customers? A new survey found that nearly 30 percent of food delivery app workers sample food they are delivering – and even more than that are tempted to try. To alert customers that someone has tampered with their food, operators are increasingly using tamper-evident labels. A QSR Magazine report advises using ones that will adhere to the full range of your packaging materials and also have security slits that tear if someone tampers with the label. These labels are a good place to market your food safety values, so they’re also a good place to feature your company logo, website or other identifying information.
The complimentary bread-and-butter basket has become a relic from the past at many restaurants around the country, but according to recent menu trends research in New York, Chicago and Los Angeles by Flavor & the Menu, that’s just leaving space for bread to occupy a more important place on the menu. The report says some restaurants are elevating bread by focusing on creating small-batch varieties of butter – with such flavors as olive and lemon, bacon fat and malt to make the bread more special – while others are raising their bread game with homemade biscuits, cornbread and grilled focaccia. The showstopper in the trends research was a bread sharing platter at Chicago’s Tied House, where a bread course including locally made breads and a range of housemade spreads such as miso butter, crème fraiche with honeycomb, green tomato marmalade and chicken liver mousse sells for a cool $32.
Are you and your guests in sync when it comes to what matters most about food delivery? According to Toast’s new Restaurant Success Report, guest and restaurant priorities don’t align. (And that lack of alignment is likely to keep a brand from succeeding, according to Hope Neiman, chief marketing officer at the restaurant ordering technology firm Tillster, who spoke to Restaurant Dive.) The Toast research found that among the 1,000-plus consumers surveyed, speed (77 percent) and value (74 percent) are key priorities when it comes to delivery. Those factors were less important to restaurants – 57 percent of the 1,000-plus operators surveyed prioritize speed and 49 percent prioritize value. On the other hand, restaurants value driver tracking (40 percent) and loyalty (22 percent) more than consumers do. Only 10 percent of consumers surveyed value driver tracking and 6 percent value loyalty points from delivery. Granted, offering delivery is already challenging enough for many operators to make worthwhile, but stepping into the shoes of your best delivery customers when structuring your service can at least make sure that the delivery you offer is what they hope for. When you survey customers, ask about their delivery service expectations, likes and dislikes in addition to asking about the food. You may have to take such steps as adjusting your delivery menu to make sure the items you offer are delivering the fastest preparation time for the consumer along with the most worthwhile value for you.
While some believe eating out is about connecting with others over a meal, let’s face it: Many people also value having some face-to-phone time when they go out. If you can ensure guests have a smooth, sustained wifi connection and power supply, guests are likely to remember and return. Powermat is one company that is helping hospitality businesses ranging from coffee shops to hotels provide the incremental technology improvements that can make a difference with guests. Its technology enables wireless charging of electronic devices. (If you’ve ever been in the position of searching in vain for a place to plug in a laptop while on the road, you will appreciate this benefit.) The wireless charging market is an emerging one poised for growth in the next five years, so if you’re looking to accommodate guests’ technology preferences, it’s an offering to consider.
Restaurant operators often have a love-hate relationship with delivery: They want to accommodate customers’ need for it but often see it as a minefield of challenges. A newly released RestaurantOwner.com survey of 1,000 operators confirms these mixed feelings. More than half of the operators surveyed (56 percent) offer some form of delivery at their restaurant, yet 47 percent of those operators plan to make some changes to their delivery offering. Delivery is worthwhile on the whole -- 67 percent of operators surveyed who use third-party delivery said they were satisfied with the service -- but those who were dissatisfied had feedback that fit three key themes explaining why: the high fees charged by third-party providers, poor service delivered by drivers at those companies, and a lack of control over food quality and presentation. If you’re in the latter category, understanding the overall landscape may help you adjust your delivery strategy. In terms of costs, there was a wide range of fees charged by third-party providers – enough variation to indicate that operators may have some wiggle room when landing on their ideal revenue model: Most operators surveyed are being charged between 21 and 30 percent of the sale but 11 percent being charged less than 6 percent and 3 percent aren’t being charged at all (the delivery service places the order and charges the fee to the customer). To gain more control over the service and overall experience provided, operators who are making changes are taking such steps as adjusting the packaging they use for delivering food (perhaps to both keep food at the proper temperature and to prevent driver tampering), integrating their POS with delivery, limiting delivery to weekdays when the restaurant is in greater need of business, and even – much like large brands like Panera and Domino’s who are showing how it can be profitable and protect the customer experience -- taking on the management of a delivery fleet themselves.
Consumers are getting increasingly comfortable with (and even reliant on) digital assistants. For proof, just ask Alexa: Earlier this year, Amazon announced it had sold more than 100 million Alexa devices to date. For their part, Google Assistant and Apple’s Siri have hundreds of millions of users apiece. Foodservice brands are finding new ways to tap into consumers’ growing ease with such tech tools. Take Aramark, which has partnered with the tech company Mashgin to expand its use of artificial intelligence (AI) in the baseball parks where it operates. Mashgin offers express self-checkout kiosks that are capable of scanning multiple items at once without barcodes, Verdict Foodservice reports. The result is a faster payment and a shorter time waiting in line for consumers, a valuable service when you’re dashing to pick up food and merchandise between innings. Every transaction then feeds data back to Aramark about consumer preferences.
Any chef can confirm it: Running a restaurant well can require the skills of a lawyer, doctor, designer, HR manager, mechanic, janitor, and the list goes on. And that’s on top of having to offer an appealing, in-season menu that can be readily adapted to different nutritional needs. While that ever-changing environment can bring interest and variety to each day, chances are you were drawn to the restaurant industry more because of the food than for your ability to negotiate a beneficial contract or identify the best cleaning supplies. Further, the multitasking often required in a restaurant setting can kill productivity: A University of Michigan study found that when a person attempts to accomplish more than one task at a time, productivity drops by 40 percent. Team Four’s Palette program can serve as an extra pair of hands, taking on some of the responsibilities on your plate so you can multitask less and focus more on parts of the business that suit you best. For example, Palette can help you fine-tune your brand, including redesigning your menu or updating your graphic identity on your website, signage and marketing materials. You can also access restaurant equipment, linens, office and cleaning supplies, along with services for managing waste collection and pest control. And in case your menu or inventory needs attention too, we can help you develop new recipes, identify cost-effective menu substitutions, improve your food safety record and offer negotiated contract pricing to help ensure you’re getting the products you need at the best value. You can access the full list of services included in Team Four’s Palette program at www.palettefoodservice.com.
Now that Uber Eats is testing a “Dine-In” feature on its app, expect other third-party delivery providers to follow suit. The feature allows a person to order food at a restaurant, track the process of its preparation so she can arrive at the restaurant in time to eat it, and also leave a tip. The benefits to restaurants could include having to pay a smaller fee to the delivery provider than would be required for third-party delivery, faster table turnover, and the opportunity to offer deals that could attract dine-in guests during slow periods. It remains to be seen how accurate the app’s food preparation tracker will be at peak periods, but if you’re struggling to fill seats, it might offer an opportunity to entice guests to come in and sit down.
Placing a few bits of information on your TCS food storage bins can have a range of benefits: It can help you avoid serving expired product that could potentially lead to illness, give you a heads-up about when you’ll need to offer specials to get rid of excess items, save you money, and demonstrate to your health inspector that you’re managing your operation well. Upserve suggests you use a food rotation label that clearly lists the type of food being stored, the date it was prepared and added to the storage area, and the date it will expire. Then all it takes is a quick scan to make sure the first bin in is also the first one out.
You stick to strict cleaning procedures and take steps to avoid the cross-contamination of foods, but how much do you know about the quality of the air in your facility? You may have excess dust accumulating in the air that can contaminate food, or moisture from ovens that can generate condensation and lead to mold. Further, the simple act of cooking can make indoor air as dangerous to breathe as smog, according to new research from HomeChem. Asthma or other respiratory ailments on your kitchen team can signal you have a problem, but you can improve air quality going forward by maintaining appliances and ventilation units routinely, having your air tested for chemical or biological pollutants, replacing old cookware with models that are less likely to contaminate the air, and using natural building materials and decorative elements in your restaurant.
It’s the season for grabbing some prepared food to go, then enjoying it at summer picnics and other outdoor events. If you offer grab-and-go foods, double check that you’re following food safety procedures so you can avoid contamination hazards and other safety risks. Daymark Safety Systems suggests operators follow several steps to protect grab-and-go storage areas. Regularly clean any doors, shelves, machine dispensing areas and lights that are part of your food displays. If you have any automated kiosks with touchpads, clean and also disinfect those high-touch areas to kill any contaminants — you may need to leave the disinfectant on the surface for a few minutes before wiping it away. Check regularly for spills on the floor and within your display, and consider using an absorbent pad or mat to reduce the risk of slips when spills occur. Clean floors at least once a day, and ensure trash and recycling bins are cleaned inside and out and don’t become overfilled.
The love-hate relationship between restaurants and third-party delivery providers continues to show some cracks. As of this writing, there had just been a hearing in New York to hash out differences regarding the fees that third-party vendors charge restaurants for their services, which tend to range from 12 to 30 percent of each check total, according to the AP. In the meantime, some restaurants have alleged that the charges from third-party delivery companies aren’t stopping there. A class-action lawsuit filed in Pennsylvania in May claimed that Grubhub was charging for calls to restaurants that were made through the Grubhub app even if the call did not result in an order. (For example, a New York Post report said calls for reservations and customer complaints were being charged.) And there’s yet another wrinkle: A new report in New Food Economy found that Grubhub had purchased more than 23,000 potential restaurant website domain names, which would enable the company to prevent the restaurants from using those domains (without Grubhub’s involvement, anyway) to support their businesses. The sites appear to be for the restaurant in question but phone numbers shown on them direct users to Grubhub and then are forwarded (and charged) to the restaurant. Grubhub then receives a commission between 3 and 15 percent per order placed this way. For its part, Grubhub told New Food Economy that it purchased the sites to give restaurants an additional source of restaurant orders and that any affected restaurants could request to have their domains transferred to them. Regardless of the outcome, at a time when delivery has become compulsory for restaurants, restaurant operators would be wise to screen their contracts carefully — and to consider the future of their web presence. Third-party delivery vendors can help smaller brands compete with larger ones that have the resources to manage their delivery in-house but it’s important to understand where the costs may outweigh the benefits.
Is this tech fThere is a lot of noise in the restaurant technology space. How do you know which new technology is a solid investment — or even when it’s worth upgrading your existing tools and systems? CIO Review identified five E’s that can help you sift through the clutter. Asking yourself these questions can help you narrow down your options. First, is it easy to use? If it’s not, your team won’t use it and it may even motivate their decision to leave. Next, is it effective in tackling intended challenges — enough so that it makes the investment worthwhile? Third, is the technology efficient? It should either automate or reduce the steps you must take to complete a task, not create new ones. Fourth, is it engaging to use? In addition to being intuitive to use, the interface should provide feedback and visual cues to guide someone through a task. Finally, how tolerant of errors is the technology? Can you easily undo a task initiated by accident? It should have controls in place to minimize the impact of user errors and above all, safeguard your data.or you? Remember the five E’s
At a time when restaurant businesses are feeling pressure to identify new revenue streams, the CIO of Mattson, a food and beverage innovation firm based in Silicon Valley, says many operators are missing out on a potentially lucrative opportunity: meal kits. Barb Stuckey of Mattson told Restaurant Dive that she has long been urging operators to take a look at offering the kits to at least determine if they make sense financially or operationally, but few are following through, save for perhaps Chick fil-A. The brand tested meal kits to positive results last year, according to Forbes, though they haven’t announced future plans for them. Stuckey likes the kits because she thinks they can help operators attack some of the quality-control issues they may experience with delivery. For instance, kits may be worth a shot if you have menu items that could do well off-premise but may not travel as well when they are fully cooked (like fries and sandwiches). Or, if you have brisk lunchtime traffic, promoting the kits during lunch may help you sell to guests who want to sort out their dinner plan in advance. At least, the category could help restaurants tap into a less saturated segment that is ripe for reinvention. According to Packaged Facts said, meal kit market expansion in the future is likely to rely more on alternative purchasing venues than on the traditional subscription model, which can clash with the on-demand mentality of off-premise customers. Restaurants can provide that on-demand experience.
A study by IHL Services, Inc. found that 96 percent of consumers between the ages of 18 and 39 like to use kiosks for ordering food. Restaurant operators who consider kiosks to be the domain of large chains might keep an eye on Tapit, an emerging player that offers a customizable kiosk platform called SELFIT that is aimed at individual restaurants on up to small- to medium-size chains. The platform, which was on display at the recent National Restaurant Association Show, aims to help restaurants customize menus and integrate promotions, lifting check totals in the process. The company’s technology is currently used in the Israeli sandwich chain New Deli, where the head of operations credited the kiosks for boosting individual sales by 30 percent and branch sales by 13 percent. National Restaurant News reports that Tapit’s kiosk platform will have its first U.S. rollout at Duchess Restaurants in Connecticut.
Restaurant operators know it’s important to offer off-premise dining. But what isn’t always clear is how to get your restaurant to the front of the pack. At the recent National Restaurant Association Marketing Executive Group’s annual conference, representatives from such brands as Kitchen United, Technomic, Le Pain Quotidien and Dunkin’ gathered to share their insights about how operators can stand out among the competition in the delivery space. First, put yourself in your delivery drivers’ shoes — or better yet, drive around with them for a shift to observe their experience with other restaurants. Note which brands make it easiest (or even most pleasant) for drivers to collect orders, whether that be via providing separate parking spaces, pick-up windows or shelves, or offering reliably friendly treatment from your staff or a free soda to go. Then note what sort of service those best-performing restaurants get in return (e.g. having their orders picked up fastest or delivered first). That said, make sure you label orders with a stamp detailing the time the order was complete and ready to go — if food arrives late, it can help you and the customer understand who is responsible. Next, offer ordering incentives that will help lift check totals without too much effort on the customer’s part. Offer a free appetizer for a customer ordering food for $25 or more, for example. Finally, pay attention to the factors that boost your delivery numbers. Is there rain in the forecast? At Dunkin’, that means sending out a marketing offer to local customers or posting a promotion on Facebook to help bolster delivery orders.
If your restaurant shows games or other live events on television, you are likely aware of Tunity, a company that makes it possible for people in fitness centers, sports bars, hotels and other venues to use their smartphone to listen to audio from muted televisions showing live events. The company was onsite at the National Restaurant Association Show to promote its testing of a new feature that may help restaurants target guests with special offers based on their viewing preferences. So, as Nation’s Restaurant News reports, if one of your guests is an L.A. Lakers fan, Tunity’s app can help you send a push notification to entice the person to watch the Lakers’ next game with you — and get a free beer or other offer in exchange.
What’s your challenge? Whether you need help developing recipes and concepts, analyzing food costs, fine-tuning purchasing, planning a marketing campaign or managing another aspect of your business, we can provide guidance tailored to your needs. Contact Team Four at firstname.lastname@example.org or 888-891-3103 for more information.
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