More Liquor Licenses in New Jersey
Poll suggests it won’t be easy. The concept of “more booze” isn’t as accepted in New Jersey as one might think. Responding to Gov. Phil Murphy’s call for more liquor licenses in the state — one of the priorities laid out in his State of the State address — just half of the respondents in a poll from Fairleigh Dicksinon University said they’d be on board with such a move. In the FDU poll, 38% of New Jersey adults said New Jersey should not expand the number of liquor licenses, and 12% said they’re on the fence. Fifty-four percent of Democrats expressed support for Murphy’s proposal, compared to 43% of Republicans. At the same time, Democrats were more likely than Republicans to say that they prefer bringing their own alcohol to restaurants. “I’m not sure the governor was looking for a big political fight when he raised this … but he definitely picked a big political fight,” said Dan Cassino, poll director. “It’s going to be a lot of wrangling, and it is going to be a horribly divisive issue.” Murphy indicated that he’s in favor of overhauling New Jersey’s current system — which ties a municipality’s license allotment to the number of residents — in order to stimulate the economy and make the price of a license more reasonable for non-chain establishments. Proponents of the move say that the high cost of licenses is keeping restaurateurs from opening locations, and perhaps hindering the progress of downtown revitalization projects. But any proposal to expand the number of licenses is likely to receive strong opposition from entities that have already spent hundreds of thousands, or millions, of dollars to secure a license for their own establishment. There are likely a number of municipalities that don’t want to see additional licenses because a lack of licenses has been an effective way to keep chain restaurants from opening up, Cassino added. “What’s especially tricky about this is that it isn’t a statewide problem,” Cassino said. “Any change is necessarily going to hurt some people more than others.
How Restaurants Can Ace the General Manager Position
The GM has become the most important role in a restaurant company. It’s a subject that comes up more and more with restaurant leaders in public comments on their companies’ performance: Success runs through one specific role employed across their system. “The manager role in our restaurants is the most important role we have — especially the general manager or the managing partner,” said Rick Cardenas, CEO, and president of Darden, in a call to report earnings for the quarter ending Feb. 26. “Being fully staffed gives them more time to spend with their team and train their team, develop them, and make them stronger and spend that time forecasting their business and spending time with guests. Indeed, GMs have one of the widest-ranging positions in an entire restaurant company, one that impacts both guests and crew members. And in today’s climate of economic turmoil and a shallow labor pool, restaurants must pay close attention to recruiting strong leaders and retaining them through ongoing development. General managers excel first and foremost by forming connections with the often-disparate cadre of people working for them, who in turn drive the success of the restaurant, experts say. At a time when the industry is facing a challenging labor environment, the ability of a GM to create a culture that makes people want to perform well is essential, said Victor Fernandez, VP of insight and knowledge at Black Box Intelligence.
What’s the Restaurant Investment Forecast?
What makes a brand scalable? There are multiple different ways brands can achieve scale. In our experience, having an omnichannel presence certainly helps, but there’s no “one size fits all” strategy. Whether that is omnichannel in nature (e.g., direct-to-consumer/CPG) or strictly brick and mortar, I think investors are generally looking for repeatable concepts with consistent performance across a broad swath of markets, as well as locations and units. At RSE, for example, we have been actively looking at more CPG brands than ever before. A CPG product can be a great way to bring something special from one concept nationwide in an efficient, economical manner. While this can help brands achieve scale in a relatively short duration of time, it’s not something that can (or should) be forced. The addressable market ultimately needs to be large enough for these products; otherwise, you’ll likely end up with something niche, at best, which won’t serve the overall goal of scalability. At the end of the day, I think it is ultimately rooted in the fundamentals of your brand. You first need to have a deep understanding of your category, as well as the key drivers that make your business stick, before assessing which growth strategy is the right fit.
As the Trade Down Continues, Consumers Cut Back on Restaurant Dinners
Full-service dinner traffic has declined by 13%. One quarter down for 2023 and we still don’t have a whole lot of certainty about the macroeconomic picture and its implications for the restaurant industry. Our crystal ball has displayed mixed signals for months (here and here, for instance) and there aren’t many indicators that’s going to change anytime soon. What’s mixed, exactly? Well, on one hand, labor is improving for the industry and consumers have proven their willingness to access restaurants despite relentlessly higher menu prices. On the other hand, customers are getting anxious about bank turmoil and layoffs and higher interest rates and are continuing to pull back on discretionary spending. A recession is yet to be declared, though several signs are pointing aggressively in one’s direction. “My view is that 2023 will still be bumpy. I think we’re adjusting to a new normal and I wouldn’t say the new normal is completely flat yet,” Torchy’s Tacos CEO/founder Mike Rypka said in an interview this week. “We’re faced with a hard economy right now. If we’re not in a recession, we’re talking ourselves into one.” Still, consumers have to eat, and food-away-from-home continues to trend at a lower inflationary clip than grocery. As such, according to new data from Circana, restaurant traffic was up by 2% in February versus February 2022. New data from the National Restaurant Association also shows that 51% of operators reported higher customer traffic in February.
NYC Restaurants Impose 90-Minute Time Limits on Diners
Out of control. A few weeks ago, Christina Izzo, 33, was out with a couple of friends at Ye’s Apothecary, a Szechuan restaurant and speakeasy that opened in NYC’s Chinatown last year. They asked to order some more food — the restaurant serves a menu of $12 to $15 small plates — but were told they couldn’t: The clock was ticking, and the 90 minutes allotted for their reservation were nearly up. Izzo was peeved. “It was almost like a bodyguard ushering you out of a club after a fight,” said the editor, who lives on the Upper West Side. When it comes to traditional notions of hospitality, time is up. Facing limited space and staffing at the height of COVID-19, restaurants imposed strict time limits on tables. Now, faced with shrinking profit margins and a need to turn tables quickly, many hot spots are continuing the practice post-pandemic. Diners — who are looking to have lively, relaxed meals out with friends at long last — are none too pleased. “I shouldn’t have to argue with you [if I] want to spend more money at your establishment,” said Izzo. She had a similar experience recently at Torrisi Bar and Restaurant, a buzzy new spot-on Mulberry Street. When her party was first seated, a server warned them that they only had 90 minutes. They were only granted more flexibility when Izzo flexed her media connections and said she planned to order lots of food from the menu of pricey Italian American dishes, which include linguine with clams ($29) and chicken alla griglia ($39).
Are Robot Waiters the Future?
Some restaurants think so. You may have already seen them in restaurants: waist-high machines that can greet guests, lead them to their tables, deliver food and drinks and ferry dirty dishes to the kitchen. Some have cat-like faces and even purr when you scratch their heads. But are robot waiters the future? It’s a question the restaurant industry is increasingly trying to answer. Many think robot waiters are the solution to the industry’s labor shortages. Sales of them have been growing rapidly in recent years, with tens of thousands now gliding through dining rooms worldwide. “There’s no doubt in my mind that this is where the world is going,” said Dennis Reynolds, dean of the Hilton College of Global Hospitality Leadership at the University of Houston. The school’s restaurant began using a robot in December, and Reynolds says it has eased the workload for human staff and made service more efficient. But others say robot waiters aren’t much more than a gimmick that have a long way to go before they can replace humans. They can’t take orders, and many restaurants have steps, outdoor patios and other physical challenges they can’t adapt to. “Restaurants are pretty chaotic places, so it’s very hard to insert automation in a way that is really productive,” said Craig Le Clair, a vice president with the consulting company Forrester who studies automation.
My Wife Orders at Restaurants Without Checking Prices
Ask Amy. My family is upper-middle class. I love to dine out, and at my instigation, we do it often. I am also always seeking value in whatever I purchase, including restaurant meals. Bargains gravitate to me. Our most recent meal at a fine restaurant came about when the restaurant was offering a weekday promotion of a 10-ounce strip steak with side dish for $19.95, considerably less than the normal price. My wife ordered a nine-ounce bleu filet, which was $40.75 — one of the most expensive items on the menu. When the check came, she said she was waiting to see whether I would have a heart attack, indicating that she knew her dish was pricey. My wife worked as an accountant before we were married. I am semiretired and manage our investments and shop for the family. We do quite well financially, but this is a common pattern for us. My wife said that she does not look at prices and that if we are going out to dinner, she is going to order what she wants. Although her expensive meals are not going to take food off our table, it seems like poor form to me. Your take?
Did You Know?
The Sushi surge isn’t letting up. According to ibis world, the number of sushi restaurants in the U.S. has grown by 4.8 percent in 2023 to more than 19,600 businesses. While the vast majority of U.S. sushi restaurants have typically been single-unit independents, America’s growing palate for high-quality fish and novel, international foods has spurred emerging concepts to try its hand at crafting the platters of rolled rice with various fillings and topping. According to IBIS World, the number of sushi restaurants in the U.S. has grown by 4.8 percent in 2023 to more than 19,600 businesses, yet there are no companies with more than 5 percent market share—leaving a large opportunity open for growing concepts.
Employee Tip
Restaurants continued their hiring streak in March. The March jobs report shows that food and drinking places gained 50,000 employees and employment in the sector remains 2.2% below pre-pandemic levels. The March jobs report showed a slight slowdown, with 236,000 positions added on the month, versus 311,000 added in February. However, the Bureau of Labor Statistics report slightly beat estimates as the unemployment rate remained steady at 3.5%.
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