Adapting to the “new normal” – Eight ways to recession proof your restaurant

The market contraction has been directly proportional to average cheque size. Fine dining has been more severely impacted than QSR but all foodservice sectors have suffered losses. These challenges have forced many restaurants to adapt quickly to survive but often without a plan on how to sustain what may be a prolonged period of recovery.

The future is always difficult to predict, but simply hanging on by your fingernails waiting for the economy to turn around may not get you there. Non-sustainable cost reductions will not bridge this recession and can create a downward spiral of declining guest counts that pushes your business even farther away from an economic rebound.

The first and most important step is to create a plan. Many restaurants have been so consumed with reacting that little thought has been put into planning. Here are some things you should consider in recession proofing your restaurant.

Take the time to focus your efforts on moving the “big rocks” not the minutia. Address the things that truly make a difference to your guests and have the most impact. Making a laundry list of small changes may seem efficient, but the key is to make the right changes to be effective.

“Efficiency is concerned with doing things right, effectiveness is doing the right things”1

Your success has probably been the result of the things you do extremely well. They may be specific menu products, service specialties or perhaps outstanding value or an inviting ambiance. They shouldn’t be a surprise. Your guests tell you on a regular basis what they really enjoy about your restaurant, so leverage these strengths and do what you do well even better.

Invest the time to get out beyond the four walls of the restaurant. Have competitors opened or closed? Have they made changes or otherwise adapted? Have local traffic generators changed? In many cases you will find it’s a different landscape from just a year or two ago.

Undertake a complete review of your menu. Look at individual item profitability and product mix. New seasonal items could be added, unpopular or unprofitable items should be dropped. Value is critical no matter what sector you are in and can be achieved with prix fixe menus, menu item bundling, and sampler menus.

Increasing menu prices should be approached cautiously, but most menus do have opportunity. The key is to look at each menu item and avoid across the board increases. Some items are very price sensitive and others may have hidden equity. Changing the game can provide cheque opportunity by simply enhancing an existing menu item with a new ingredient or condiment. An effective pricing strategy should take into account the overall guest experience.

“Based on a January 2011 online survey of 500 consumers, the top three items that would influence consumers to pay more at a restaurant during any daypart are non-food related. For breakfast, lunch and dinner, a good atmosphere either tied for #1 or was the primary factor that consumers indicated would motivate them to accept a higher bill. An exceptionally clean restaurant was next, followed by friendly staff.”2

There is no substitute for direct feedback from your guests and your employees. Guest feedback can come from simply soliciting comments at various points of service to more elaborate methods like social media, online surveys etc. Employees can provide a unique and valued perspective as they are ultimately responsible for the quality of the guest experience.

Leverage the value hidden within your business network. Suppliers, your franchisor (if you are part of a franchise system) and your trusted advisors can offer honest perspective and valuable insight for your business.

Are there hidden sales opportunities with catering, take out, parties or even retail products? The operational considerations associated with these options may bring added complexity to your kitchen and production systems so think them through before adding them to the mix.

Successful restaurants are constantly evolving and changing. There is always a new normal so don’t get stuck waiting, go ahead and create the future, today!