Restaurants and Institutions

The unique economic environment we are facing seems to have new ways of presenting itself. I looked at the top five gainers and losers in the market yesterday (Nov.19).

The “gainers” caught my attention. The top two were barely positive, third place had no change in stock price and the last two were NEGATIVE.  In other words, they just did not drop as much as all but three of the other restaurant stocks!

Right now, it is hard to find anything positive to hang onto, but in terms of other retail categories, we do have two things going for us.  First, restaurants tend to be a leading indicator for the economy. While we are the first to feel the pain, we also will ...Read More

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If the Millennials haven’t been on your radar, it’s time to start paying attention. Born roughly between 1977 and 2000, The Millennials have surpassed the Boomer generation in size, and their reliance on foodservice.  There are 83 million Millennials vs. 78 million Boomers. More important, Millennials frequent all types of restaurants—from QSR to Casual Dining—significantly more than Boomers.

However, they make choices differently than Boomers, placing different priorities on restaurants’ attributes. Where they like to go, and what they like to do, may overlap somewhat with Boomers, but don’t count on it as a way to attract them to your restaurant.

WD Partners...Read More

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These are extraordinary times by any definition of the phrase. Darwin’s theory comes to mind.  The weakest of the (restaurant) species will likely go extinct. In fact, a number of units have already closed and many more may follow. 

I do not anticipate any material turnaround till mid 2010.  Many other economic advisors are not that optimistic!  The lesson to be learned is to adopt--even embrace changes to your operation--before it is too late to change. Changing sooner is better than changing later.

While the first thought would be to find new ways to cut expenses, that simply is no longer a sufficient strategy.  Yes, you must (continue) to find ways to reduce outgoing costs, but you must also find ways of enhancing your operation to retain as many visits as possible. 

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Now that I have your attention, let me explain. This may sound like heresy, but perhaps we should embrace putting nutritional information on the menu. If we adopt a reasonable approach and actively implement that plan, we may save ourselves from an array of unreasonable requirements.

The trend is clear, municipal and state legislatures are looking for ways to protect consumers from themselves by requiring restaurant chains to post nutritional information on the menu. 

Some of these local initiatives are reasonable, but many are not. In addition, they all seem to vary on requirements. Imagine running a national chain that had to comply with 20, 40, or 60 (you pick a number) different local disclosure requirements.

Hav...Read More

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Why is it that so many unit-level managers (and frequently, even more senior-level managers) seem to have a case of myopia?
 
I just finished a tour of a number of stores for a due diligence project and observed that this all-too-frequent myopia occurred yet again throughout this concept. Too many units had execution and physical store flaws that were visible to me within two minutes of entering.

From my viewpoint, the “devil” is unit managers’ visual fatigue (for lack of a better phrase) as it relates to spotting and addressing physical plant issues in their own units. These managers would likely see the same things that I--and customers--see if they were to walk into the restaurant. Yet, when it comes to their ...Read More

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You have probably heard about Locavores, but not likely to have given it much thought.  Well, from my viewpoint, its time to put on the thinking cap.

Locavores, if you are not familiar with the word, came into existence only a few years ago.  It refers to people who prefer to eat locally grown food.  The definition of local varies, but usually caps out around 200 miles or so.  Likewise, the strength of consumers’ preference for local foods also varies. But one thing is clear, local sourcing will continue to get more and more important to both consumers and operators.

Several factors are driving this preference for locally produced foods.

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As promised, the other great concept I saw when I was in London a few weeks ago is a dim sum concept called Ping Pong.

Ping Pong is billed as a 21st-century tea house. Its décor, servers and service, as well as the food and beverage belie the pricing.  I expected it would be a much more costly meal (even for London) than it turned out to be. 

The food was excellent. The flowering teas are worth the visit all by themselves.

Interesting, up until now, concepts that offered small plates such as tapas and dim sum never seemed to get a lot of chain attention.  Of course, we were in an era where the only thing better than big portions were enormous portion...Read More

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The abrupt closing of Bennigan’s company stores (as well as Steak & Ale and the Tavern units) has been in the news.  I was speaking with a reporter yesterday about the Bennigan’s bankruptcy, and in the course of the conversation, she misspoke, referring to the segment as "casualty dining." It was one of those funny “out of the mouth of babes” moments. I have to say, it rang true.

We are all painfully aware of how tough these times are for operators. Consumer spending is down, commodity prices are soaring, other costs are following suit. It is about as bad as I have seen it in at past 25 years. So it is not a surprise that a casual-dining brand—-especially one that has not been the strongest of brands...Read More

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I was in London a few weeks ago and was amazed at the new concept development going on there.  Until the early-'90s there wasn’t much going on in London. Now I’d say it’s of the best places to see innovative new restaurant concepts.

One of my favorites on this trip was Vapiano, an Italian fast-casual concept with fun design elements and a great food.

Food is prepared to order, using induction (electric) woks for sauces.  No disposable plastics here. Food is served on china and has great eye appeal, as can be seen in the photo below. The two dishes I sampled would hold their own against fare from much higher-priced Italian dinner houses.

...Read More

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Thanks for the all the comments.  I wanted to make a couple of clarifications. I am not in favor of underpaying any of our employees. All of them should be making a fair wage and being treated with respect.  If you are not doing that, your labor (and service) issues are, or will be, larger and more difficult.

My bigger concerns with the Employee Free Choice Act (or Card Check) are not about wages, but about other issues, such as:

An increase in payroll costs without a corresponding increase in productivity. 

In fact, contracted work rules may decrease productivity.  Imagine the possibility of a kitchen that has to be staffed with the same number of employees on a slow Monday night as it is on a busy Saturday night. (Related to this is the likely reduction in total industry employment if labor costs rise more than productivity ...Read More

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Many of you know about the proposed "card check" legislation.  The bill, known as The Employee Free Choice Act, is anything but that.

In an effort to boost lagging union membership, organizers are going after foodservice. They are asking foodservice employees to contemplate why they do not make as much an hour as their co-workers in manufacturing.  The argument is that foodservice workers work as hard as people in manufacturing jobs, so why aren't they paid the same? 

Now, just think about the impact on your business if your average hourly wage rate was somewhere in excess of $18 per hour. Frightening enough?

If passed, this bill will allow Union representation in your restaurant if they can get a mere 50% of your worker...Read More

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There are two win-wins that seem to be foremost in my thoughts right now. 

The first is that my blog, as you can see, is now on R&I’s site.  I am looking forward to a long and enjoyable relationship with them as well as reaching more of the industry.

The second win-win, could--actually should--involve you and your restaurant(s). 

This second win-win is the Great American Dine Out this September 21st to 28th.

As an industry, we are supporting “Share our Strength,” a charitable organization that desires that no child in the U.S. go hungry. You can contribute a small percenta...Read More

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