Why Bar and Restaurant Owners Should Capitalize on Live Sports Entertainment
Consumers crave unique experiences. While serving good food and beverages and providing quality service are the cornerstones of any good restaurant or bar, consumers crave unique experiences. UFC CEO and President Dana White has always said that if you aren’t sitting inside a packed arena, the next best atmosphere to watch a fight is at a bar. That’s true of all live sports. The chance to watch your favorite teams surrounded by people who are as big of fans as you are, is one of the best aspects of being a sports fan. Growing up, my father—and Founder of Joe Hand Promotions—was incredibly passionate about all sports, but particularly boxing. He started out in the sports world as manager for legendary heavyweight champion, Joe Frazier, and the two later became business partners. During this time, cable and satellite television had little reach in homes, meaning there were few matches available on broadcast TV. Fans would spend countless hours traveling to see their favorite boxers square up, either in person or at arenas with giant projection screens that my father would set up. Nowadays, in the ever-evolving television landscape with more sports moving behind paywalls on various services, bar and restaurant owners are at a disadvantage and are losing out on incremental sales to other establishments who have easy access to these games. Tens of millions of consumers watch live sports out-of-home (OOH) on a monthly basis, with bars and restaurants seeing a 21 percent increase in food and beverage sales for high-profile sports events compared to normal, according to a recent research report. By providing access to exclusive games and premium events that consumers traditionally can only access by paying for at home—from boxing and MMA matches, to college football and basketball games and more—bar and restaurant owners have an enormous opportunity to grow revenues and market share by targeting consumers wishing to watch live sports featuring their favorite sport, superstar or alma mater. The result? An operator’s dream scenario: increased traffic, revenues and an enhanced hospitality experience that consumers can’t find everywhere.
October Price Index Unchanged
Restaurants outpace supermarkets. The Consumer Price Index for all urban consumers was unchanged in October on a seasonally adjusted basis, after increasing 0.4% in September, the U.S. Bureau of Labor Statistics reported Tuesday. Over the last 12 months, the all-items index increased 3.2% before seasonal adjustment. However, price increases at restaurants outpaced those at supermarkets in October, the data showed. Mark Kalinowski, principal at Kalinowski Equity Research, noted that the latest Consumer Price Index showed an increase in prices for food at home (grocery stores and supermarkets) of 2.1% in October (sequentially down by 30 basis points from September’s 2.4% increase). Kalinowski said the increase for food at home compared with prices for food-away-from-home (restaurants) that increased by 5.4% year-over-year in October (sequentially down by 60 basis points from September’s increase of 6%). “This marks the eighth month in a row for which restaurant pricing is outpacing grocery/supermarket pricing, following no such months during all of 2022,” Kalinowski said in a note. The gap between grocery inflation and restaurant inflation contracted slightly on a sequential basis, to 330 basis points in favor of groceries. “This is actually the smallest gap in favor of grocery stores in the last four months,” Kalinowski said. “We take that as a sign that the gap likely reached its high point in September 2023 (360 basis points). We do not expect the gap to meaningfully widen from here. In fact, by early 2024, we expect the gap to start noticeably shrinking.” The 20-year (2003-2022) historical average is a 60 basis-point gap, Kalinowski noted, “so October 2023 is the seventh month in well over a year in which the gap is in favor of grocery stores, and simultaneously, larger than the 20-year historical average gap.”
Bielat Santore & Company – Restaurant Industry Alert
OCEAN COUNTY, NJ “ROADHOUSE/TAVERN” FOR SALE
Highway location; 35-year operational track record; booming residential growth in immediate area; quality food & spirits in casual surroundings; seats 124 dining + 76 at bar/lounge + 80 outdoor; 22 Flat Screen TV’s; small package goods store; business climbing back up to pre-covid gross sales of $2M; 50/50 food & liquor; real estate included in sale; financing available to qualified.
Contact Richard Santore, 732.531.4200 for additional information.
We invite you to visit our website, where you will find all our current listing inventory, a library of helpful industry resources and a collection of client testimonials expressing their assessments of our work and our service within the restaurant industry.
A voice for our industry. If you find these weekly bulletins informative and beneficial, we kindly ask that you write a brief Google review providing a vote of your appreciation. Simply Google “Bielat Santore & Company” and when the company name appears click the button on the right to write your review or if you don’t use Gmail, go to Google Maps, type “Bielat Santore & Company” – Allenhurst, NJ into Google Maps; scroll down and you will see an option to leave a review.
The American Restaurant Consumer
Resilient yet selective. As we’ve been reporting for about a year now, the state of the consumer has been puzzling, even for the savviest economists. We started to see some trade down activity happening in the fourth quarter of last year, but it didn’t grow much beyond a ripple as industry sales and traffic remained steady and, in some instances, strong. That began to change in Q3, when pricing fatigue finally set in, leading to sharp traffic erosion. The restaurant industry hasn’t been the only sector impacted by relentlessly high inflation; retail has also taken a pretty big hit. That said, consumers have continued to show their willingness to spend at restaurants and elsewhere, and the U.S. gross domestic product grew at a staggering rate of nearly 5% last quarter. This inconsistency was front and center during Q3 calls, in which BJ’s Restaurants CEO Greg Levin, noted, “We’re all trying to decipher different things.” Or, as Darden Restaurants’ CFO Raj Vennam summed up, “There’s been mixed data on the consumer.” In other words, things remain puzzling, and guidance is, therefore, hard to come by. What we know now is consumers are more discretionary. Except for high income consumers in some – but not all – instances. “Consumers continue to be resilient but more selective,” according to Darden CEO Rick Cardenas. Cardenas’ casual dining peer John Peyton, CEO of Dine Brands, also said guests have become more selective about where they choose to spend their money, adding that it’s a “price sensitive environment.” However, sales remain steady. In any normal environment, this wouldn’t add up so tidily, but this is no normal environment. Peyton believes that works in his company’s – and the industry’s – favor.
The Real Cost of Losing Restaurant Staff
The hidden costs of restaurant staff turnover. Picture this: Sarah, a talented line cook in a popular downtown restaurant, decides to quit unexpectedly. The owner, John, thinks he can easily replace her but what he doesn’t realize is that Sarah’s departure sets off a chain reaction. There is lower morale among the staff, a decline in the food quality and, eventually, a drop in customer satisfaction. Let’s explore the hidden costs of this kind of turnover and how you can turn this challenge into an opportunity. There’s one thing you can’t teach in the restaurant business and that’s experience, especially experience in your restaurant. There’s the experience of what a rush is like, what to do when your burners go out during service, or how to handle a crazy holiday weekend. These are just a few examples of those things that can’t be taught in a manual. Sure, you can systemize a lot of it and teach staff your system, your process, your way and make sure they’re as prepared as possible, but nothing truly replaces the institutional knowledge your experienced employees have. There are also training costs involved and training for new hires is expensive. Twenty years ago, when I first started coaching restaurant owners and their managers, the estimate for turnover was about $2,000 per employee. Today, studies like the one by the Society of Human Resource Management called the “Human Capital Benchmarking Report,” showed the cost of turnover today is $4,129 per new hire. That number includes costs like training wages for the employee and the trainer, uniforms, product errors, service errors and insurance. That’s more than double what it was 20 years ago, so financially it’s expensive when you lose somebody and have to bring somebody else in.
64% of Diners to Order Holiday Items from Restaurants
Thirty-seven percent say they would rather order their entire holiday meal from a restaurant. Restaurants will have significant competition from grocery stores heading into the holidays with several retailers offering heavily discounted group meals. Lidl, for example, is offering a Thanksgiving dinner for 10 people for less than $30. The cost of goods in a Thanksgiving meal basket is up 27% compared to 2019, which could make some consumers prefer a restaurant meal. The average price of a hearty Thanksgiving meal at a restaurant is $34 per person, according to Square data emailed to Restaurant Dive. Chains, including Cracker Barrel, Denny’s, Popeyes and Ruth’s Chris Steak House are offering Thanksgiving meals to-go. Cracker Barrel’s meals range from $99 for a meal of four to six to $149 for a meal of eight to 10. HungerRush’s survey indicates that consumers are unlikely to dramatically shift their preferences for dining out during the holiday season. Of those surveyed, 40% said they would not change their dining habits and 49% said dining out is a preferred way to enjoy a meal, which HungerRush said could indicate “a potential surge in restaurant foot traffic this holiday season.” However, younger generations are intending to dine out less frequently due to economic impacts with 45% of millennials and Generation Z each saying they would not dine out as much. These generations are more likely to dine out if coupons come into play with 80% of millennials and 84% of Gen Z saying they would take advantage of promotional offerings.
Biting the Hand that Feeds
Processing fees that prey on merchants. s point-of-sale (POS) platforms exit the startup stage and developers begin looking for ways to generate increased revenue, many are turning toward processing fees for using their software. These processing fees go all the way up to .99 cents and are added to orders that exceed a minimum cost. For restaurateurs and businesses across the nation, these fees come as a shock – and an unwelcome one at that. Added fees are a practice that can prey on unfamiliarity with POS platforms and the uncertainty left in the wake of COVID-19. In the end, restaurants are left to navigate the taxes and frustrations that come from the added fees. Meanwhile, restaurant owners and operators grapple with an influx of customer confusion, loss of trust in their business and missed sales. The absurdity of the fees is making national news, even sparking demand for a congressional hearing. But to me, none of this is surprising. The truth is point-of-sale companies can either be payment or product focused. Companies that are payment-focused can implement processing fees at their own discretion. But in doing so, they show a clear disregard for a real partnership with restaurateurs and their operations. By instituting these fees, point-of-sale companies are undermining restaurant profits every time a customer places an online order. Unfortunately, these fees discourage customers from ordering in the first place. Have you looked at ordering food online lately? Prices have skyrocketed, and even a .99-cent fee is enough to deter many customers. Even for those that don’t mind the fee, most have no idea how their order ends up impacting the restaurant’s income. It’s all so backwards. Point-of-sale software and companies should help restaurateurs, not harm them.
Restaurants and Bars Should Consider Text Message Surveys
For gathering customer feedback. In the competitive restaurant and bar industry, customer feedback is vital for success. With the prevalence of online reviews, it’s crucial to actively seek and utilize feedback. Text message surveys offer a convenient and real-time method to gather this valuable input, and in this guide, we’ll explore their importance and implementation for improved operations. Customer feedback offers insights into customers’ satisfaction, needs, and preferences. It acts as a compass, guiding establishments to stay relevant in a dynamic industry. Feedback isn’t just opinions; it’s a catalyst for improvement. Restaurants and bars can use it to identify areas needing enhancement, adapt to changing trends, and refine operations. Acting on feedback not only enhances satisfaction but also fosters customer loyalty. Actively seeking and acting on feedback sets restaurants and bars apart in a competitive market. It demonstrates a commitment to excellence, attracts and retains customers, and safeguards reputation in the age of instant online reviews. Historically, restaurants and bars have relied on traditional methods like comment cards and in-person feedback to gather customer opinions. Comment cards, often placed on tables or near exits, provide a physical platform for customers to jot down their thoughts about their dining experience. In-person feedback, on the other hand, involves direct conversations between staff and customers, where feedback is shared verbally.
Did You Know?
7 tips for restaurants to prevent bursting pipes in the bitter cold. Many parts of the country are no stranger to arctic air masses this time of year. This type of weather system brings both bitter cold and wind chills that create dangerous conditions for those in its path, affecting not only people, roads, and vehicles, but building infrastructure, too. Frozen pipes can be a concern in buildings during the cold months, which, if left unaddressed, can burst and cause further structural damage. Every year, an average of over 250,000 structures suffer damage from frozen and burst pipes, estimated to result in $400-500 million in damages each year. Here we’ll review what causes frozen pipes, how they can affect your business operations, and seven ways to help prevent them from occurring in the first place.
Consumers are getting burned out on tipping. The average person is being asked for a tip five times a week, according to a new survey by tech supplier Popmenu, and more than half (53%) say they’re getting tired of it. Tipping in restaurants, once largely reserved for places with table service, has spread to other types of concepts as operators look to boost employees’ pay, and as digital technology makes it easier to ask. The trend has not been limited to restaurants either: There have been reports of grocery stores, plumbers and bridal shops asking for tips.”