Here Comes NextGen Casual
Why it’s time to redefine full-service dining. A new breed of full-service restaurants is finding plenty of whitespace in the post-pandemic world of dining out. In the fall of 2021, FSR unveiled “NextGen Casual” as a category definer. But it was hardly a novel idea. For years, full-service chains had taken to labeling themselves in hopes of placing some type of proverbial line in the sand. Terms like “upscale casual,” “polished casual,” “elevated casual,” “fine-fast,” “craft casual,” and on it went. The idea was a plain one: “casual dining” had become a blanket descriptor for larger players in the space, from how they operated to what they looked like, but didn’t capture what was taking shape in the middle—a restaurant movement closer to independent restaurants, in terms of food, sourcing, and nuance, yet with the scale, model capabilities, and ambitions of multi-unit chains. In many respects, it was a long-awaited answer to fast casual. The quick-service disruptor didn’t simply crash fast food and force change from the top down; it also grayed the proposition for full-serves. Was the food quality in sit-down establishments materially better than fast casual? And if the answer wasn’t so clear all of a sudden, then how could operators justify the added cost of table service? Even before COVID-19, brands had started to solve the riddle through a combination of experience, accessibility, agility, hyper-focused menus, technology, and differentiated designs. The pandemic sped the cycle, and it’s only solidified in the aftermath. Picture higher prices across the foodservice industry and a growing divide between transactional brands and those that are hospitality-driven. As challenging as the dynamic is, it’s uncovered opportunity for brands that lead with the latter to reframe value as “what it’s worth” versus “what it costs.” All said, though, what “NextGen Casual” means going forward remains fluid. Just like fast casual when it landed, or “better burger,” etc., how a brand gets credit for stepping into a fresh space comes down to what guests care most about. And so, FSR and QSR this year commissioned a consumer study with consulting firm King-Casey to develop an understanding of diner wants/needs for the next generation of full-service restaurants. The answers won’t just matter to sit-down chains, however—everybody will be paying attention.
Here’s How President Biden’s Crackdown On Junk Fees Will Affect Restaurants
Biden announced a new strike force to crack down on unfair pricing. Last fall, President Biden announced a proposed crackdown on “junk fees” or misleading consumer-facing surcharges that are usually included in the fine print before a purchase is made. The Federal Trade Commission’s proposed trade regulation rule would require businesses to include all required fees in the original listed price. While media attention on this proposed crackdown had initially focused on companies and industries like Ticketmaster, airlines, hotels, and car rental agencies, the FTC rule would also include restaurant service charges in its new rule. Most recently President Biden mentioned getting rid of junk fees again during the annual presidential State of the Union address last week. “I’m also getting rid of junk fees — those hidden fees — at the end of your bill that are there without your knowledge…. My administration has proposed rules to make cable, travel, utilities, and online ticket sellers tell you the total price up front so there are no surprises,” Biden said in his address to the nation. On March 5, the White House announced the launch of a new strike force to fight “unfair and illegal pricing,” cochaired by the Department of Justice and the Federal Trade Commission, with the goal of saving American consumers nearly $20 billion in junk fees and to promote more competitive pricing in the corporate community. The FTC proposed rule that would allow the federal government to crack down on these “hidden fees” specifically mentions restaurants, among other industries, as targeted industries that would have to adhere to new standards. The FTC noted that commenters during the public commentary period observed that, “restaurants routinely add fees to bills that were not previously disclosed, using various names (e.g., ‘’service fee,’’ ‘hospitality fee,’ ‘kitchen fee,’ ‘equity fee,’ ‘economic impact fee,’ ‘temporary inflation fee’) that do not clearly or conspicuously identify their nature or purpose.”
Bielat Santore & Company – Restaurant Industry Alert
BIELAT SANTORE & COMPANY SELLS ANOTHER RESTAURANT AND…
NAMED “EXCLUSIVE BROKER”
The former Kuo Social Chinese Restaurant, Robbinsville, New Jersey, has been sold according to Richard. Santore, Vice President of Bielat Santore & Company, Allenhurst, Monmouth County, New Jersey, the broker for the sale. The Jersey Shore Restaurant Group, which already owns three other restaurants, will open its “polished casual” pub-style restaurant and bar concept following minor renovations to the space.
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 click this link and leave a review. Thank you.
When Canceling Your Reservation Costs as Much as Dinner
Fed up with no-shows and last-minute cancellations, restaurants are increasingly charging fees. To celebrate his wife’s birthday in 2022, Brian Azara, a mechanical engineer in New York City, booked a table for two at a Michelin-starred restaurant in Brooklyn. But when their son was suddenly hospitalized with severe asthma, Mr. Azara had to cancel the reservation. A few minutes later, he checked his credit card account and saw a $200 fee. “It was probably 23½ hours before we were supposed to be there,” Mr. Azara said, yet the restaurant refused to reverse the charge, citing its 24-hour cancellation deadline. While he sympathizes with the financial challenges restaurants are facing, he said the charge “really kind of stung.” Mr. Azara’s run-in with the cancellation fee reflects a broad shift among restaurateurs, many of whom now feel they have no choice but to penalize diners who are increasingly canceling reservations at the last minute, or not showing up at all. Even a few missed reservations, they say, can upset all the careful planning restaurants due to manage operations and balance the books. “Cancellation fees bring people back to reality when they make a reservation,” said Erica Hall, a general manager and co-owner of the Brooklyn restaurant and “karaoke saloon” Chino Grande. “They remember it’s an agreement.” According to data from the reservation service Resy, 17 percent of the U.S. restaurants on the platform charged at least one cancellation fee in January, up from 13 percent a year earlier and 4 percent in January 2019. The practice was even more widespread in big metropolitan areas: A quarter of New York restaurants on Resy charged at least one cancellation fee in January, as did one-fifth of restaurants in Los Angeles and Miami.
Surge Pricing Is Coming to More Menus Near You
Restaurants experiment with technology that can move prices up and down. If you are hungry for barbecue on a Saturday night this month, a delivery of a pulled-pork sandwich from Cali BBQ could cost you around $18. Or you could hold off a few days and order the same sandwich delivered on a weekday afternoon for around $12. Restaurants like San Diego-based Cali BBQ are experimenting with a form of the dynamic pricing long used by airlines, hotels, and ride-hailing services. Technology providers are pitching services that enable restaurants to change prices weekly or monthly, increasing or slashing the cost of a taco or sandwich between a few quarters to several dollars, depending on demand and sales patterns. The small changes can add up for restaurants seeking more sales, though operators must weigh the potential gains with the risk of upsetting inflation-weary consumers. Shawn Walchef, Cali BBQ’s owner, said that variable pricing attached online to the pulled-pork sandwich boosted the four-unit chain’s $30,000 in monthly delivery sales by $1,500 since the company began testing it in early 2023. “That’s very meaningful for a small business,” Walchef said about the sales boost. “I recommend it to every restaurant owner.” Cali BBQ has since expanded the technology to a $32 combo meal. Dynamic pricing—charging higher rates at peak times and dropping them at slower ones—has become commonplace in industries such as e-commerce, and mobile apps have made it easier for companies to study consumers’ buying and browsing and quickly adapt. Rising costs in recent years have led more retailers to implement it.
The Unwritten Rules of Bringing Wine to a Restaurant
There’s an etiquette to navigate for those who do plan to BYOB. Many sommeliers have mixed feelings about corkage fees. On the one hand, if guests adhere to the often-unspoken rules, the server has an opportunity to taste or enjoy a glass of an extraordinary wine. Alternatively, things can go wrong with the exchange, creating an awkward situation for diner and staff alike. “Corkage is a funny thing because people are always trying to get away with paying less,” says Carrie Lyn Strong, consulting sommelier and wine educator at Strong Wine Consulting. She is filled with amusing stories regarding clients trying to get around corkage policies during her time as wine director at Aureole, which offered no-fee corkage on Mondays. One anecdote features a guest who claimed he did not technically bring a wine that was on the restaurant’s list because even though it was the same producer, variety, and vintage, it was from a different vineyard site than the one on offer. Touché, but does anyone really want to be that guy? Alternatively, Strong also chose to share a positive BYOB story: A guest brought in a 1977 Port, which happens to be her “vintage” birth year. Although 1977 was, in Strong’s words, “a rough vintage all around the world,” it happened to be a great one in the Douro. After she “opened this bottle and slowly, gingerly picked out the pieces of broken cork,” her guests were “delighted with the care” she took in opening their wine, so they offered her a glass at the end of their meal. And yes, we all want to be remembered as that guy. So, the next time you want to bring a prized bottle to a restaurant, consult our dos and don’ts of corkage to make sure you are remembered favorably.
Creative Solutions to the Restaurant Labor Shortage
Reskilling, retention, and robotics. The restaurant industry has always been dynamic and challenging, but the labor shortage has pushed it to a critical juncture. Establishments are grappling with a complex crisis characterized by empty seats in dining areas and behind the scenes, where a shortage of skilled workers is keenly felt. To revitalize the workforce and enhance operational efficiency, it is imperative that we boldly explore innovative solutions across reskilling, retention, and robotics. The labor shortage has hit hard, with many restaurants operating below capacity despite a rebound in customer demand. The gap between available positions and willing, skilled workers has widened, putting pressure on service quality and business sustainability. Several factors have contributed to the labor shortage, including competitive job markets, evolving career expectations, and a mismatch between the skills available in the workforce and those required by the industry. Additionally, the physical demands and historically lower compensation levels in the sector have made these roles less attractive to job seekers. These impacts affect not only the bottom line for businesses but also the dining experience for customers. Reduced staff can result in longer wait times, decreased service quality, and, in some instances, limited operating hours or menu options. This can ultimately lead to lower customer satisfaction and loyalty.
Did You Know?
How technology can save time and boost efficiency in the back of house. Managing labor, food costs and daily tasks in foodservice operations is a tricky endeavor. With so many different things to account for, including staffing, inventory, recipes and so much more, it’s understandable that operators are looking for more efficient ways to get the job done. Thankfully, like many other areas of foodservice management, there are tech-based solutions that can ease the burden, while streamlining costs and boosting efficiency.
Employee Tip
Restaurant turnover rates improve to pre-pandemic levels. The United States economy added 275,000 jobs in February – about 75,000 more than expected – while the unemployment rate ticked up to 3.9%, from 3.7% in January. Employment at restaurants and bars accelerated in February, with net 41,600 jobs added during the month versus a loss of 2,400 jobs in January. February marked the strongest monthly increase since January 2023 for the industry’s workforce, illustrating a continued demand for both restaurant employment and usage.