Over the past few years, the restaurant industry has faced ongoing challenges, from the rise of the pandemic to today’s rising operating costs. As the country faces an economic recession, restaurant operators need to flexibly manage their businesses to meet customer needs, contain rising costs and maximize available resources. The industry as a whole was trending upwards late last year and into the last few months, but the changing economy leaves the year ahead uncertain. With varying consumer behaviors that change dining out and dining out expectations, restaurants need to modernize to best meet their needs.
How economic conditions affect restaurants
The US Department of Agriculture recorded a more than 10% increase in the consumer price index for food compared to last year. In addition to rising prices, restaurants are facing worker difficulties, with many owners citing staffing issues that have resulted in longer than usual wait times for consumers. Earlier this year, industry sales were expected to reach his nearly $900 billion mark, but inflation and a looming recession will ultimately change consumer spending in the coming months. . This year, the average household’s discretionary cash flow is expected to be negative since 2008, which he hasn’t seen since the 2009 recession.
It is the extra money in the consumer’s pocket that drives spending, which ultimately translates into restaurant revenue. According to a recent survey, a consumer spends 40% of his monthly food bill. At the same time, restaurants are reporting sluggish sales as people refrain from eating out to save money. What’s more, 9 out of 10 of his businesses say food is more expensive than it was before the pandemic began. Restaurants need to navigate all of this strategically to navigate a challenging industry environment.
Menu changes in lesson fees and impact on revenue
Restaurants are cautious in choosing to raise their prices. They may want to consider creative solutions before deciding to do so. In the current climate of inflation, product prices are on the rise, so digging deep into the ingredients used in menu items is key to determining profit margins. Identify and see how much it will cost and how long it will take to prepare the meal. Once you have this information, you can start by removing low performing items and those that lead to lean profit margins.
Monitoring and mitigating unnecessary waste can lead to long-term savings. Making too much of one item wastes all the materials you can save for another day. Training cooks to properly measure the portion they put on their plate and the portion they make goes a long way. Consider tweaking your current offerings to items that are less expensive or less susceptible to inflation. You can also reduce prep time by purchasing a finished product that only requires heating. As the challenges continue, restaurateurs need to be flexible and look at every part of their operations to not only cut costs, but make the best use of all their resources.
Leverage technology to streamline operations and increase customer satisfaction
One of the most important resources that is often overlooked, underutilized, or not implemented is technology. As customer expectations lean toward ease of use and convenience, it is critical to incorporate technology into your daily operations to retain current restaurant patrons and attract new ones. From online ordering to QR codes that can be scanned to access menus, more customers want to engage with restaurants digitally. This can be a huge revenue stream for those who decide to bring the technology into their operations. Adopting digital menus accessed by QR codes can save the cost of printed menus, and those that offer ordering capabilities along with menus can streamline the guest experience.
If you choose to order online, mobile applications are another way to engage with your restaurant. Online ordering accounts for about 40% of total restaurant sales, and online food delivery is estimated to reach about $340 million by 2022. It also saves time for the restaurant as employees spend less time taking orders over the phone and can focus their attention on other important tasks. You can easily increase your revenue and reduce staffing needs by putting your online orders directly in the hands of your customers.
Integrating online orders can be a lucrative venture, but many are wary. Some third-party vendors are said to charge shipping fees of up to 30%. For those who want to avoid wasted fees, there is a desktop/mobile application that streamlines ordering and requires a flat monthly fee compared to some of its larger competitors. It is part of the consumer’s decision-making process when choosing which restaurant to order from.
Restaurants have faced many challenges over the last few years, and responsiveness and agility will help them overcome many more in the years to come. From auditing operations to evaluating ways to reduce costs and increase revenue, operators can gain an advantage despite obstacles. Companies that make the most of their existing resources and choose to use technology strategically are meeting today’s customer demands and will be able to survive in the future.
As Vice President of Product Marketing for Ordrslip, a Bitwise company, Nicole Leisle oversees and executes all aspects of the company’s marketing, branding, campaign strategy and public relations. A results-driven leader, Nicole brings 17 years of her B2B marketing expertise to the table, leading her team to rapidly grow and scale the company cautiously. In her spare time, she enjoys reading and enjoying the outdoors with her husband and children.
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