The State Of The Restaurant Industry

Bill Coyne Tuesday, January 4, 2022 Comments Off on The State Of The Restaurant Industry
The State Of The Restaurant Industry

By Bill Coyne

Even on a good day, for restaurants it’s an ever-changing dynamic to stay afloat, draw in diners, remain competitive and make a profit. In short, it’s brutal. 

The first major blow came nearly two years ago when COVID-19 led to mandates and closures in nearly every sector of employment. Restaurants, forced to close their dining rooms, were left scurrying to create ways to continue to offer their food to the public. With delivery services greatly diminished, drive-thru was really the only option for both the restaurant and the consumer.

 In the beginning, I believe the popular sentiment was simple: If we can only get through this quickly and rebound, we can get back on our feet and on the path to normal again. However, a string of natural disasters would prevent any hint of progress. In fact, it would further delay and alter everything we know, not only locally but globally.  

The continued strain was more prevalent as time went on, rearing its ugly head through various social media outlets. The consumer’s frustration with restaurants became a daily topic. Is it justified? 

Wanting to quell some of the misconceptions, I took the opportunity to create a little roundtable session discussing what’s happening in the food industry. 

I soon found myself sitting after-hours in the office of Shadi Abrusley, a prominent businessman and restaurant supplier, along with business partner Josh Smith, restauranteur and creator of Coffee:30. 

Shadi opens the conversation by  stating, “people have this misconception that just because a restaurant is open again, just like that, things are going to be just the way they were before. We don’t know if there is such a thing as going back to where things used to be. 

“From the diner’s view, it’s almost impossible to see how much the dynamics have changed — from product costs and availability, the workforce and their expectations, and the position of the owners or operators of the restaurant. I don’t believe the diners are fully aware what kind of shortage we are in when it comes to maintaining a restaurant.”

 On average, product costs are up 25 percent. That is, if you can find the product. The beef is out there. It’s the production and distribution that’s creating the biggest backlog. The February freeze, which gripped most of the country, decimated crops, making produce extremely limited in supply. Add the current economic situation, the bottleneck of supplies in limbo outside the ports, and the downsizing of manufacturing, production and anything food-related — it has all had a serious impact. 

Transportation costs and surcharges always get passed down until someone is left to absorb the hit. Many businesses are left struggling to source what they can and use what’s available. It may not be ideal or what was usually in their stock, but what these businesses are able to get is going to have to do. 

For most restaurateurs, the profit margin is not nearly as padded as people want to believe, and the supply cost makes the margin even thinner. To maintain profitability, restaurants can reduce the portion size or pass on the increase to the consumer by maintaining portions, but increasing the price. 

However, menu changes can be expensive and are often consuming in the turnaround to receive and utilize the new menus. Luckily, for those who have a digital and easily manipulated menu board and ordering system, this isn’t as big a task as for those using older systems. In either case, most consumers are reluctant to accept the increase. People want to continue to receive what they were paying for so many years ago but fail to understand the current economic situation. 

Another daunting aspect for owners and managers is the workforce. Southwest Louisiana lost a large percentage of housing — and the people who would normally facilitate a full employee base in a restaurant. With the stimulus packages offered over the course of COVID-19 finally coming to an end, there’s an ideology that it’s more lucrative to sit at home than it is to go out there to work for the previously acceptable wages. Restaurants have responded by increasing starting pay just to entice people to come to work. 

Now, if employees do show up, how do you retain them? There is a huge difference between a management team that allows the revolving door policy and those who invest in their team. Everything needs to work cohesively, from the prep work and the duties of the kitchen staff all the way to the front door. 

The servers are the faces of the restaurant, the front line. Positivity and professionalism generate great rewards in the form of tips, satisfaction in a job well done and the likelihood of gaining a rapport with repeat customers. A great server can turn an off night into a positive experience. Some servers have a natural knack for the position and make it appear effortless. However, for those who need a little nudge, it’s the responsibility of the manager or owner to set the expectations.  

Some people dine out often, while others only venture out for special occasions. I recently read that a couple was justifiably disappointed in their anniversary dinner. They had read many positive reviews, but their reality wasn’t close to the expectation. This special occasion was one of the only times they ever go out, and it flopped. 

People will gladly pay for good food. Customers should expect four things in their dining experience: service, quality, value and atmosphere. Fail one of those, and it becomes a struggle to win over the customers.

As Smith explains, “you have to have transparency between the kitchen and the customer. If the food is not in proper and presentable condition to send to the customer, be honest about it. Go out to the customer. Explain that  ‘We messed up. Your dish is not to our standards and we have to remake your order. I’m sorry for the delay.’ Not every restaurant can afford one of the most crucial positions. That is the expo. That person’s sole responsibility is to make sure that plate is perfect before heading to the customer.” 

The couple celebrating their anniversary left without stating their disappointment at the time, and with good reason.  Most of us fear backlash and tend to avoid conflict, especially in a restaurant. However, we, as diners have a responsibility to convey what’s right or wrong. A staff or manager can never learn from what went wrong or how to improve if the customer remains silent. Do you remember the days when you saw a comment card and a little box at the end of the table? That concept is still there.    

So, hypothetically, what happens if the prices adjust and things begin to trend closer to normal? Will the end-user price adjust as well, or did we set the bar at a new height? That all remains to be seen as we all try to get through this together.

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