by Dallas Henderson, Account Manager at RizePoint
Pent up consumer demand will help restaurants increase sales this year. The National Restaurant Association forecasts that 2022 sales will reach $898 billion, an increase from $864 billion in 2019. However, only one in four restaurant operators think their business will be more profitable this year than last, due to a trifecta of issues: inflation, supply chain issues, and labor shortages.
After two difficult years of the COVID-19 pandemic, restaurants are facing a perfect storm of challenges:
- Inflation – Food prices are rising at the highest rate in 40 years. The cost of all food is expected to increase throughout the rest of this year, with half of food categories expected to reach double-digit inflation. Rent is also skyrocketing for many restaurants.
- Ongoing supply chain disruptions – 96% of restaurant operators have recently encountered product delays or shortages and the same percentage of operators do not believe these supply chain issues will be resolved in 2022.
- A continuing labor shortage – 85% of small restaurant owners in the US are still having trouble hiring employees.
How can restaurants survive – and thrive! – in this disruptive environment? Implement these 9 suggestions:
- Use digital systems to better manage costs. At a time when every dollar counts, use software to provide critical data and insights that can save your business significant money. While it may feel unrealistic to invest in tech tools right now, today’s options provide tremendous cost-savings from optimized scheduling, reduced labor costs, better purchasing decisions, and more. Just be sure to choose an integrated system – not a disjointed one – so you can manage all areas of operations through one tech stack.
- Prioritize safety and quality. No matter what challenges come our way, restaurant operators must prioritize safety and quality. Tech tools are a smart way to ensure these protocols are followed properly and consistently. Today’s digital solutions help minimize risks, boost compliance, and can make essential tasks – like self-inspections and line checks – much easier, quicker, and more accurate. Additionally, use tech solutions to monitor equipment, like to be certain that ovens and walk-ins are operating at the proper temperatures. It’s possible to get alerts sent to managers’ smartphones if equipment is malfunctioning or if there’s a power outage, so they can immediately take corrective action.
- Increase transparency. The COVID pandemic made consumers much more aware about safety, quality, and cleanliness. Now they want brands to be completely transparent about what they’re doing to keep guests and employees safe. Proactively promote your safety and quality protocols. For instance, 110 Grill is known for its commitment to allergy-friendly practices, and they showcase this at every touchpoint. The menus include language about their willingness to accommodate food allergies, servers ask each table if anyone in the party has food allergies, and gluten-free menus are offered to all guests. Their website reinforces this commitment. Be forthcoming about your willingness to accommodate guests and keep them healthy and safe.
- Modify your menus. Inflation and supply chain disruptions mean that restaurants must be more mindful about their menus. Instead of offering a long list of menu items, reduce your offerings and only feature your top-selling items. By focusing on fewer menu items, your team can streamline purchases, buying fewer ingredients for less waste and reduced expense. Create a flexible menu that can easily change based on available supplies. For instance, instead of specifying green beans as a side dish on the menu, offer a vegetable of the day, in case green beans are unavailable (or cost prohibitive).
- Reduce food waste. US restaurants waste 22 to 33 billion pounds of food each year, totaling $162 annually. That means restaurants are literally throwing money away. Reduce waste to save significant money. For starters, work to use every bit of food that comes into your kitchen. Repurpose leftovers into new dishes. Use bones, along with meat and veg scraps to create broths or soups. Stale bread can be the star of a panzanella salad, stuffing, or bread pudding. Create grain bowls with leftover rice, veg, and proteins. If you get too much fresh fruit, freeze some, and use it later to create desserts and sauces. Be creative and resourceful, especially as certain ingredients remain difficult (or expensive) to get.
- Plan better. Poor planning is a huge problem that leads to excessive waste. Use data gleaned from your digital software to make more informed decisions so you’re not buying, prepping, or cooking more than you can reasonably use. Take more accurate inventory so you don’t make redundant purchases. Look at historical sales patterns to see how much inventory you use in a certain timeframe. These patterns can help you determine your busiest and slowest days and shifts so you can plan accordingly.
- Focus on staff retention. The restaurant industry is notorious for its high turnover rate. But during the pandemic, restaurant employees left their jobs in droves for better pay and benefits, as well as safer working conditions with less contact with the public. The pandemic worsened the existing labor shortage in the restaurant industry and made it even harder for brands to remain fully staffed. Only five states have the same number of restaurant employees now as they did before the pandemic. And 70% of restaurant operators nationwide say they’re currently short-staffed. Most restaurant operators expect the labor shortage to extend into at least 2023. Therefore, restaurants should do everything in their power to retain existing employees during this challenging climate. Pay competitive rates. Use digital scheduling tools to ensure employees aren’t overscheduled to help avoid burnout. Offer benefits, including paid sick leave, insurance coverage, year-end bonuses, and free meals. Create a fun environment with plenty of opportunities for advancement.
- Use different approaches to recruit new employees. With this ongoing labor shortage, there’s tremendous competition for talent. How can you find qualified prospects in this tough environment? Create an employee referral program where your employees get bonuses if they refer friends who join your team. Extend the referral bonus to your guests to “widen the net” of your search, and promote this incentive through onsite signage, table tents, and social media posts. Post ads on job boards. Have a presence at local career fairs. Promote available jobs on your website and social platforms.
- Focus on sustainability. Small changes will add up over time. Turn out lights when your dining room is closed. Reduce the heat by a degree or two. Turn off the air conditioning and open the windows. Use reusable napkins, towels, cups, dishes, and silverware instead of disposable. Eliminate the use of plastic straws and Styrofoam packaging. These efforts will help improve your bottom-line – as well as the environment. As an added bonus, many consumers choose to support sustainable brands.
Restaurants have demonstrated perseverance, tenacity, and resilience since the pandemic started, and these traits will serve them well as they navigate the current trifecta of challenges. Continue focusing on safety, quality, and sustainability and you will get through this difficult time.
Dallas Henderson, a 25-year veteran of the service industry, is an Account Manager at RizePoint. RizePoint is disrupting traditional market software with their innovative, new product platform Ignite Supplier Certification Management, which helps small to medium sized businesses simplify the supplier certification and maintenance process. To discuss RizePoint’s solutions, please contact Dallas at dallas.henderson@rizepoint.com.