Are Younger Workers Coming Back to Restaurants?
Out of the pandemic. Between February and April 2020, the American labor force shed north of 8 million jobs. The country didn’t return to pre-pandemic levels until the summer of 2022. For restaurants, it took even longer—September 2023. Hospitality needed three years and 33 consecutive months of employment growth to lift its pool to February 2019 marks. To put that in perspective, restaurants had to staff more than six million jobs from March 2020 lockdowns onward. And unlike some industries, which suffered a gradual burn as habits adjusted, those six million jobs were erased in weeks. Restaurants accounted for one in four of the 10 million jobs lost in the overall economy at one juncture. There were simply few, often zero, alternatives as operators were forced to shift the entirely of their sales outside the four walls. Then arrived the saga of federal aid and the recalibration of what it meant to staff a restaurant in COVID’s aftermath. Did operators need as many people to serve guests? Then, as dine-in flooded back, did they have enough to satisfy pent-up demand while also still operating off-premises growth? And now, can restaurants afford higher wages and other realities of a rebalancing workforce? In understated terms, labor did not become less complicated following the journey back to 15.5 million jobs, or 10 percent of the total U.S. workforce. Hospitality reclaimed its place as the nation’s second-largest private sector employer with September’s news, but that doesn’t mean it snapped back to how it was operating from a wider sense.
To Charge or Not To Charge?
That is the question? Charging guests for booking a reservation that they don’t show up for is becoming more popular. Ten years ago, this was a practice in the big cities like New York, Chicago, and Los Angeles. When this practice began, I must be honest I told my customers not to do this charge because it could cost them clients. When restaurants began charging guests the three-percent credit card fee, I was against that as well. Again, times are changing and so is my opinion about what charges are appropriate to put back onto the guest. However, I also believe that a number of restaurants have gone too far when it comes to charging a number of other items to the guest. Let’s start with the reservation charge. For now, I have recommended to my clients to only utilize the reservation charge during holidays (Mother’s Day, Christmas, New Years, Easter, etc.). One of my fine dining clients did not do this charge this year on New Years and cut off reservations at 140. Their New Years Eve package was a well-publicized $130 per guest. Once they hit the 140, they stopped taking reservations. Unfortunately, 30 guests did not call to cancel their reservations, nor did they show up. Essentially these no-call/no-show diners cost the restaurant a minimum of $3,900. I find this to be unacceptable on the part of patrons and starting this new year we are letting the guests know that we are implementing a full charge to their credit card if they cancel in less than 24 hours. We will also do some overbooking so that the restaurant and the servers don’t lose out on any income.
Bielat Santore & Company – Restaurant Industry Alert
“DINER BOB” GILLIS LISTS ANOTHER NEW JERSEY DINER
OCEAN COUNTY, NJ DINER FOR SALE
Photo used to depict “A Diner” only. Not actual representation.
Ocean County, N.J. Family-owned and operated since 1984, this retro-style roadside Diner is now on the market! Seemingly untouched by time, the Diner has a loyal clientele who enjoy the “breakfast-all-day” theme offering fresh strong coffee, homemade soups, chowder and chili, and all the Jersey Shore diner specials. The subject property consists of a 2,000 square foot, single-story, Kullman Dining Car style building with seating for (60) in booths or at the counter. The lot is .46 acres with private parking for (30) cars. Surrounded by a mixture of residential and commercial businesses and strip centers, the neighborhood contributes positively to the value of the Diner. PRICED TO SELL at $ 895,000
Contact Robert Gillis 732.673-3436 for additional information.
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Surging Restaurant Prices Are Making Dining Out a Luxury
What’s behind the shift? If you’ve opted to cook a romantic meal at home with your partner this Valentine’s Day — no matter how it comes out — know that you’re saving a decent amount of money compared to couples dining out. Even excluding pricey Valentine’s Day menus, it’s becoming increasingly cheaper for Americans to eat at home instead of dining out, according to January Consumer Price Index data. That’s because prices for groceries are up 1.2% year over year, while the price of food consumed at restaurants is up 5.1%. It’s another reminder of the sting inflation is having on Americans’ daily lives. Even though price increases are slowing, prices remain much higher than they were before the pandemic, which has led people to have a miserable feeling about an otherwise strong economy. And in this election year, higher food prices, which rose last month to their highest monthly rate in a year, could present problems for President Joe Biden’s campaign. While the pace of inflation for groceries and restaurant food has significantly slowed from last year, the wedge between the respective pace of their price increases has grown. In January 2023, it was cheaper to dine out, with food prices up 8.2% compared to the prior year. Grocery prices were up 11.3% year over year. In the post-pandemic world, consumers have been devoting more of their budgets to services compared to goods. Demand for services has been putting upward pressure on wages, which, in turn, has contributed to price increases. “The wage pressures are there,” said Dana Peterson, chief economist at the Conference Board, in an interview. The biggest payroll gains are in sectors such as health care, government and leisure and hospitality, she noted. “Leisure and hospitality includes restaurants, and so there’s still a lot of churn, and those companies are having to raise wages to attract and retain labor.”
Dealing with Workplace Romance
Ask the restaurant legal professional. It’s that time of year—budding romances, flowers, chocolates—but for employers love can also be a battlefield. Valentine’s Day may present legal woes for quick-service restaurants with “affectionate” (and potentially sexually harassing) employees who use this occasion to express unrequited and unwelcome desires to co-workers and subordinates. What may seem like innocent Valentine’s Day behavior of gifting cards, flowers, or chocolates could be misconstrued as evidence of unwanted sexual advances. Title VII of the Civil Rights Act of 1964 (and many state laws) prohibits sexual harassment in the workplace. Sexual harassment comes in two forms. The first involves a supervisor seeking sexual favors from a subordinate in exchange for giving favorable treatment (or withholding adverse treatment) regarding the employee’s terms or conditions of employment. The second involves sex related conduct, such as comments, pictures, dirty jokes, etc. that do not involve a quid pro quo but which make the workplace a hostile environment. The best practice for preventing liability this February is through preventative measures that start with a company “anti-harassment” policy. Employers who adopt and enforce well thought-out anti-harassment policies, including procedures for reporting prohibited conduct, are better positioned to prevent, respond to, and deal with sexual harassment issues that may arise.
A Tough Few Years Have Been a Boon
To restaurant labor productivity. Two years ago, the fast-casual chain Pincho struggled to find workers, just like everybody else. “Where is everyone?” cofounder Otto Othman said. And so, the brand got to work. It hired an engineering firm to do a motion study to find opportunities on labor. “We studied every single shift, every single peak hour to find efficiencies,” Othman said. With help from its private-equity investor Savory Fund, the company revamped its kitchens, replacing flattop grills with an automated version. And it added an AI-ordering system to handle phone orders. “That did a world of wonders,” Othman said. “We did so much to-go business. Really, I almost needed a full-time person to answer the phone.” Almost by force, the restaurant industry over the past four years has learned how to do more with less. Operators had to find cashflow quickly when the pandemic forced widespread shutdowns in 2020. And then a shortage of available workers made brands rethink the way they run their restaurants. The result has been an industry that is more productive than it’s ever been. Since 2019, according to calculations using federal data, restaurants have increased sales-per-worker by 38%. “There has been some gradual improvement in restaurant productivity since before the pandemic,” said Hudson Riehle, SVP with the research and knowledge division at the National Restaurant Association. “The industry is definitely heading in a directionally correct manner regarding increasing productivity.”
Efforts to Grow the Restaurant Labor Pool Face a Big Challenge
Time. At the start of 2024, the Texas Restaurant Association announced it was embarking on an audacious mission that could radically ease the labor plight of restaurants and other businesses in the state. In the industry’s equivalent of trying to figure out cold fusion or enable quadriplegic people to walk again, it was pulling together representatives of other employer-heavy trades and their advocates to find ways of bringing the cost of childcare within reach of hourly workers. The moonshot nature of the undertaking will require much of the current year to be spent in gathering information and exploring possibilities, a comprehensive “learning journey,” in the words of TRA Chief Public Affairs Officer Kelsey Streufert. “The rough timeline is we start putting meat on the bone in fall 2024,” says Streufert. “Then the fall to winter of 2024 is when we’ll be talking about those ideas. January 2025 is when we start taking action.” Not coincidentally, the Texas Legislature reconvenes next year on its peculiar every-other-year cycle. Depending on the complexity and scope of the possible remedies, the results may not be seen for a considerable stretch. But, says Streufert, the effort is essential, given how much of a game-changer affordable childcare would be for the state’s employers. The number of potential hires would likely rise exponentially as parents enter the workforce instead of tending their kids around the clock. “We need to grow our workforce,” she says. “We need to add 225,000 restaurant employees just in Texas.” The situation is emblematic of the restaurant industry’s efforts some 45 years into the ongoing labor crisis to find employees. The prime imperative of the business has traditionally been drawing customers. Now that’s rivaled by the need to hire enough workers to serve a public that relies on restaurants as its kitchens.
Menu Shrinkage is Out
Customized, labor-saving menu strategies move in. Shrinking or streamlining the menu was a popular pandemic solution to handling the labor shortage during the Covid years. Although back-of-house labor challenges are still with us, slashing the menu no longer cuts it. Customers are fussier about where they spend their dining dollars, and restaurants have to keep the menu fresh and innovative to stay competitive. To make up for understaffed kitchens or under-skilled workers, operators are digging into a mixed bag of strategies, including cross-training, pre-prepped ingredients, and equipment upgrades. “Figure out what customers value and will give you credit for,” said Mike Turner, VP of supply chain for Baton Rouge, La.-based Walk-On’s Sports Bistreaux. For this 80-unit casual-dining chain, it’s items like dry-aged steaks hand-cut in house, hand-pattied burgers and freshly grated cheese that make the food special, he said. Proprietary sauces and other ingredients, on the other hand, are prepared at a boutique, third-party commissary in Louisiana and sourced ready-made. Dressings and other condiments are procured from larger supplier partners. “We give a heavy lift to what guests will notice,” said Turner. Austin, Texas-based Velvet Taco prides itself on doing all its prep and cooking on the premises, but as the 45-unit chain expands out of Texas into areas including Nashville, Atlanta, Charlotte, and Florida, it’s becoming harder to find skilled taco makers, said Executive Chef Venecia Willis. “We’re looking into solutions that will assure consistency,” she added.
Did You Know?
What restaurant operators need to know about specialized cleaning. Most restaurant owners work hard to make sure their restaurant is a clean environment that provides a hygienic experience for customers and workers. A clean restaurant improves the overall dining experience and more importantly, prevents people from getting sick while eating your food. Restaurant staffers clean the front and back of the house every night before closing and tidy up before opening every day. However, a restaurant is a very active environment for dust, dirt, grime, grease, and bacteria to accumulate and sometimes you need a specialized cleaner to get those lesser-known and hard-to-reach places such as the ceiling and walls. Hiring a deep cleaning professional is necessary to ensure your restaurant is being optimally cleaned by a professional, but how do you know if you are hiring the right person? Here are a few things to think about that will help you hire the right specialized cleaner for your restaurant.
Employee Tip
Restaurants’ labor situation has improved, but it’s far from perfect. The industry has recovered jobs that it lost when the pandemic hit in 2020. People have returned to the workforce, providing a labor pool that is enabling operators to remain open and expand hours. But that doesn’t mean the labor picture is perfect. Far from it, in fact. Labor remains more expensive than it was four years ago. What’s more, the hiring picture looks different based on the sector of the industry you look at and the location of the restaurant in the first place.