The Holiday Season is Looking Particularly Merry for Restaurants This Year
Projections call for heavy purchases of both on-premise and to-go meals. The holiday season is shaping up to be a good one for restaurants, with two-thirds of U.S. adults planning to dine out and half expecting to order takeout or delivery, according to new data from the National Restaurant Association. Operators, meanwhile, report strong group bookings for the year-end season, though corporate and social parties are expected to be smaller and less elaborate than they were before the pandemic. The opposite dynamic is raising gift card sales this year, according to card processor Paytronix. It found that total spending on gift cards during the Thanksgiving weekend surpassed last year’s outlays by 7.3%, though the number of cards sold inched upward by just 0.4%. The big lift came from the online purchase of virtual credit for restaurant meals, which jumped 8.5%. The supplier noted that full-service operations fared particularly well, with a 9% gain in gift-card purchases, compared with a 2% rise for fast-food restaurants. Accompanying the upswing has been the emergence of a new card scam, according to legal authorities. Police in Philadelphia say they know of at least 100 unsold cards being drained of their value while still on display racks within stores by crooks who steal the digital codes off the plastic placards. They can then sell that information or use it themselves to pay for meals. The new statistics from the National Restaurant Association suggest that home cooks might be cheating a bit in what they present as home-cooked family meals. The canvass of consumers found that 86% of the respondents who intend to buy from restaurants will purchase sides instead of their whole holiday meals from a dining place. A slightly higher proportion (89%) said they’ll get their entrees from commercial kitchens, and 74% indicated that’s where they’ll buy whatever appetizers they serve. About 66% said they plan to throw in the napkin and just buy the complete meal from a restaurant.
Ghost Kitchens Were Supposed to Revolutionize Restaurants
They’re crashing. Big investors, celebrity chefs and chains rushed to open ghost kitchens during the pandemic, and they were expected to make up more than 20% of the restaurant industry by 2025. But ghost kitchens are now crashing. Last week, Kitchen United, which raised $175 million in funding and was backed by Kroger, announced it would sell or close all of its locations. The startup ran delivery-only restaurants from inside Kroger stores, malls, and even from inside chain restaurants, sharing cooking space. Ghost kitchens are stripped-down commercial kitchens with no dine-in option. Sometimes called cloud kitchens, dark kitchens or virtual kitchens, ghost kitchens fulfill online orders from delivery apps like Grubhub and Uber Eats. Several dozen menus can come out of the same ghost kitchen, and customers often don’t know they’re not ordering from a restaurant with a real, physical location. Ghost kitchens have been around for years, but they boomed during the pandemic. They were seen as a salvation for the restaurant industry during the height of the pandemic, and they expanded as dine-in restaurants closed and online ordering became the primary option for customers. More than 70,000 restaurants permanently closed due to the pandemic. Many restaurant owners and investors bet ghost kitchens were a cheaper way to start or grow their business than sit-down dining rooms. Ghost kitchens also offered big chains a way to test new menu concepts, items and brands at lower rents and with less labor. “Coming out of the pandemic, a boatload of restaurants closed. There was a lot of vacant restaurant real estate, especially in cities. There was hope that this valuable real estate could be put to use,” said John Gordon, a restaurant consultant. “Chains wanted to bring in new products in cost-effective fashion.”
Bielat Santore & Company – Restaurant Industry Alert
MONMOUTH COUNTY, NJ RESTAURANT AND BAR FOR SALE
ASKING PRICE REDUCED BY $200K FOR QUICK SALE!
Photo used to depict “Restaurant/Bar” only. Not actual representation.
Monmouth County Downtown Restaurant/Bar; located in the hub of entertainment district; institution at the NJ Shore – 50-year track record; turn-key business w/valuable liquor license; real estate included in sale; 4,584 square foot building; seats 72 dining, 40 at bar and 50 outside; grossing $35K/week; financing available to qualified.
Contact Richard Santore 732.531.4200 for additional information.
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A Restaurant Owner’s Guide to Simplifying Food Cost
Food cost is something you can conquer. Food cost in your restaurant is controllable. While running a restaurant is a constant whirlwind of variables and challenges; your food cost is something that you can directly influence and manage and that is going to have a direct impact on the health of your restaurant. Too many times, operators over-complicate this straightforward process. You have a million things going on and trying to perfect your numbers down to the penny only adds to that stress. If your restaurant has enough cashflow to hire someone to work on this, go ahead, but if you’re busy running around operating your restaurant, I’m here to show you that this doesn’t need to take a lot of your time. Figuring out your food cost is a simple formula: Purchases divided by sales equal cost of goods sold. The real challenge comes when you try to apply this to individual plates. You’re trying to get the actual cost of each plate, juggling multiple recipes, dealing with fluctuating vendor prices, and compensating for inconsistent yields. You don’t need a complicated spreadsheet or software to do this. I used to do it on scratch paper in my own restaurants. Inside this free Toolkit, there is a spreadsheet that will do that quick calculation for you. An even simpler way is to calculate your entire restaurant’s food cost on a weekly and monthly basis. Apply the same formula to all food-related purchases and sales. If you’re in the green zone, you’re good to go. But if your costs are creeping up higher than you’d like, it’s time to dig deeper into why that’s happening. There are five things I have my clients look at in their restaurant when costs are higher than they’d like: waste or spoilage, purchasing, theft, design, and portioning.
Why Setting Wait Time Expectations Is Key
To a good customer experience. Not much sours a customer’s perception of a restaurant as fast as unwieldy lines and long waits. Especially for fast-paced establishments, managing wait time expectations is a significant challenge and can cause patrons to leave — or, worse, never return. Although management can’t always eliminate the wait for service entirely, they can use modern technology to set reliable wait time expectations from the start. First of all, setting such a standard gives the initial perception to visitors that you’re savvy — your staff knows what’s going on and what to expect. As a result, the potential customer who just walked in also knows what to expect, automatically putting them at ease. In other words, the effort of providing a wait time expectation conveys a level of professionalism and awareness that patrons generally appreciate. Especially for perpetually busy or high-demand restaurants, customers who have to wait a long time can still be satisfied. However, customers who think that they’ve waited too long or perceive that the wait isn’t worth the service are almost never satisfied. A study by the American Customer Satisfaction Index (ACSI) found that wait time duration is one of the top drivers of customer satisfaction. Those who are forced to wait longer than expected are 18 percent less satisfied with their experience overall. Needless to say, every establishment should aim for fully satisfied patrons, and that starts with providing realistic and transparent wait time expectations. A 2020 study on the psychology of queuing states that consumers are consistently inaccurate at estimating how long they think they’ve been waiting for. This finding further complicates matters because even if the customer only waits, say, five minutes to receive service, they may feel that they’ve waited much longer, causing frustration and distrust. Access to accurate, live time estimates provides the visibility necessary to perceive the actual duration of time they waited, lessening the chances of dissatisfaction. With a virtual queuing system, notifications can be sent directly to the customer’s device to inform them of status updates, including unexpected reservation changes or the amount of time remaining until they’ll be seated.
How Restaurant Companies Are Navigating a Messy Real Estate Market
High demand and costs, coupled with low inventory have created development bottlenecks. The restaurant real estate market has been a bit messy as of late, to say the least. Demand is high. Inventory – especially for table stakes drive-thru locations – is low. Costs are astronomical. Construction, supplies, permits are painfully slow. As Portillo’s CEO Michael Osanloo described during his company’s most recent earnings call, “It’s sort of whatever the military acronym is for SNAFU – Situation Normal All Messed Up. We continue to face delays in all kinds of last-minute things. I think we have reconciled ourselves to this is a new normal.” Still, concepts that survived or thrived through the pandemic are itching to grow and most have dry powder to do so. As such, we’re starting to catch some glimpses of how they’re adjusting their strategies to navigate the “new normal” – from a bigger focus on conversions to smaller buildouts to the creation of value engineering programs to good, old-fashioned patience. Chipotle has even started calling cities to “make sure Chipotle is at the top of their work list.” For Portillo’s, the adjustments mean building timeline “cushions” around the things that are uncontrollable, “so you’re not disappointed with budgeting, timelines, etc.” Osanloo said. Cava is also adding what executives call timeline “buffers,” which they said will help create a robust pipeline and an opportunity to open more restaurants this year than the company originally planned. “Our real estate team has been building increased buffers into the pipeline to ensure we are insulated from potential delays in equipment availability, permitting and inspections,” CEO Brett Schulman recently told analysts. Cheesecake Factory is taking this same approach, increasing its “funnel” to have more sites in the pipeline to ensure targets are still met next year. The company has also strategically pushed back some openings to Q1 to wait out some of the delays. Chipotle is also focused on building a robust pipeline. That way, as CFO Jack Hartung recently explained, the pipeline keeps getting bigger as the timelines extend.
Pizza and Beer Come Together
In a single menu item . Pizza and beer are a classic pairing, of course, but restaurateurs are not just serving the beverage and the flatbread together. They’re also adding the drink to the pies themselves. “Our guests really enjoy it,” said James Cassidy, culinary and purchasing director of RAM Restaurant Group, based in Lakewood, Wash. Its 13-unit RAM Restaurant & Brewery offers a signature pizza crust made with the chain’s own Big Horn Hefeweizen instead of water. The crust also contains spent grain from its Big Red IPA, which is turned into a paste and blended into the crust “as more added flavor,” Cassidy said. “It makes it unique and at the same time difficult to copy,” he added. The beer also makes the crust crispier, he said, and the lemony banana accents of the hefeweizen add extra nuance. RAM isn’t alone by any means. According to menu research firm Technomic, using its Ignite Menu platform, beer is the fastest-growing ingredient in pizza, up by 92.3% compared to last year. That includes beer in the crust, beer cheese on the pie, and proteins such as sausage or chicken cooked in beer as a pizza topping. At Iron Hill Brewery & Restaurant, a 22-unit concept with locations in Delaware, Georgia, New Jersey, Pennsylvania, and South Carolina, the chain’s own Vienna Red Lager goes into the barbecue sauce that’s used to finish its Voodoo Chicken Pizza. Regional chef Brendan Mullan said the pizza was developed at its Newark, Del., location and has become a signature item. The Vienna Red Lager is a key ingredient. “That beer is a great food beer for us,” he said. “It has a little bit of breadiness and maltiness. … We use it to braise pork and do things like that.” He makes the sauce by sautéing garlic, onion, and bell pepper, as well as a Cajun spice blend of cayenne pepper, black pepper, kosher salt, red pepper flakes, and dried thyme, rosemary, and oregano. Then he deglazes it with the beer and cooks it down into a sauce.
Did You Know?
Shortages don’t have to be the norm. More than three years and six million jobs later, the restaurant industry reached a milestone this fall. Employment, after having plummeted into the pandemic pit, completed its climb back to the surface. This is a breakthrough, for sure. The picture could not have been bleaker in 2020, as we all recall. Facing COVID-induced restrictions and worried customers, tens of thousands of restaurants closed within the first year of the pandemic. Many others cut their hours of service and skimped by with skeleton crews as employees either had to be let go or quit. Owners still shudder when asked about those dark days. Grit and determination, though, brought many businesses back and drove adjustments and innovation. So, yes, the industry should celebrate.
Employee Tip
The intersection of kitchen cleanliness and personal style. Professional kitchens are hubs of coordinated chaos. Dishes must be prepared to perfection, and that includes running a tight ship. A huge part of kitchen responsibility is maintaining sanitary conditions. Body modifications have become a more common fixture of society—and the restaurant industry itself. This calls into question the logistics behind protocols for tattoos and piercings in professional kitchens. The following guide will brief you on proper hygiene, guidelines, potential risks, and misguided stigmas surrounding body modifications in the kitchen.
