While the pandemic is seemingly losing it's grip on us, there are many other storms brewing on the horizon. Rising food and labour costs, supply issues and an increasingly aware consumer demands are creating a very difficult environment for owners. So what to do? Everything old is new again...
There still may be time to make some corrections and adjustments before the hoards of tourists start pouring into your region, and of course your restaurant. First lets look at the issues, and then some solutions.
From servers to cooks, and other restaurant workers to agriculture and the meatpacking production workforce, labor shortages still significantly affect the industry and the cost associated with running a restaurant—the number of employees willing to work is such a critical situation that many restaurants are forced to operate with shorter hours and fewer days. In addition, continuing trucker shortages and delays in delivery have created congestion in restaurants' delivery processes, causing some restaurants to modify their menu.
Just yesterday, i had a conversation with a younger Chef/owner about this very topic. After looking at his menu and the clear fatigue written all over his face, I stated a simple fact; "Your menu is to big!" The old concept of being everything to everyone in terms of menu has to go! The solution is simple. By doing a little menu analysis and engineering, we can eliminate items that are labour intensive, costly and contribute nothing to profit.
Supply Chain and Food Supply
Supply chain issues also raised multiple problems for restaurant owners, from fresh produce to meats to paper products such as coffee cups, straws, and takeaway containers. As a result, restaurant owners continue to experience shortages and increasing prices as we approach the second quarter of 2022. Products that used to cost $11 or $12 a pound have doubled &, in some cases, nearly tripled in price. Unfortunately, with the current supply chain issues & rising inflation, I believe that restaurant owners & management will be navigating around this particular challenge for quite some time."
According to the National Restaurant Association, Wholesale food costs were up 7.9 percent in 2021, and hourly labor costs were up 8.6 percent for the year.
The simplest solution to supply is of course as I have stated before, become more self sustaining. Buy local, grow your own, play with portion sizes, introduce vegetarian options and so on...
Changing consumer behaviors
Staying relevant and profitable requires more than following the latest food and beverage trends. Restaurateurs who understand their target market, including evolving preferences for ordering, payment, and add-on services, increase profits. The old rules are dead. Not only will you have to diversify the way you do business, you will also have to deal with a higher customer expectation. Throughout the pandemic, while your restaurant was closed, people didn't stop eating...they started cooking. What a novel concept! Your consumer is more aware than ever with regards to quality and value.
So in conclusion lets say that it is both a good and a bad time to be in the restaurant business. Staying positive, I would encourage all my "Brick and Mortar" chums to take a good look at the above information, and make some changes. Although it's not a great time for the restaurant business, it's also a time of opportunity and positioning. Cheers! Have a Happy Hump Day!