New Year’s Eve, 2018, saw restaurant sales increase by 5 percent when compared to average December sales minus holidays, according to Toast’s New Year’s Eve and New Year’s Day Restaurant Trends. Not an astronomical jump, but worthy of some additional restaurant marketing strategies on one of the most celebrated holidays of the year.

Here’s another interesting statistic that will help your promoting strategy, peak hours for restaurant sales were 1pm, 7pm, and 8pm, and continued on a steady course until the ball dropped. Some more good news? The average check size increased by 12 percent!

So, just how do restauranteurs get their share of sales for the last night of the year? Here are a few tips:

1. Entertainment. If there was ever a night to consider adding some type of entertainment to your venue, this is it. Consider live music, a magician, or a wandering minstrel. Immerse your guests in a unique experience and transform your establishment for one evening of pure joie de vivre by hosting a costume/masquerade ball. Let your imagination be your guide.
2. Interaction. This is the night when people muse about the past and dream about the New Year about to unfold before them. It’s a time to celebrate, put on a party hat, and engage with others. To that end, many people will be looking for venues that provide this type of atmosphere. Consider a cocktail party—perfect for kitchens that are practiced in the art of creating unique and delectable tapas.

What are a few of the most successful restaurants in America doing for New Year’s Eve? Tao Las Vegas in the Venetian Hotel, with annual sales that reach over $43 million, is bringing in the New Year with Grammy Award-winning entertainment, three hours of decadent hors d’oeuvres, two hours to enjoy their premium open bar, and a Champagne toast at midnight.  

Joe’s Stone Crab in Miami Beach is offering a Special Limited Menu for the big night, which they’ve already posted on their Facebook page—one that had almost 32,000 likes three weeks before the big event.  Well done, Joe!

With some planning and social media strategizing, New Year’s Eve can be not only a night to remember, but a profitable end-of-the-year bash that brings in both old and new guests. The question is, now that the holidays are over, how do you keep these guests returning and more new guests heading through your doors?

Marketing for the New Year

One of the first rules of marketing is to define your target—who are you marketing to? As the New Year begins, it’s safe to assume that many people will be thinking about new beginnings and making this year better than their last. Exercise and healthy eating will be first and foremost on many of your guest’s lists of resolutions. To help them achieve their goals, consider putting together Limited Time Offers (LTO) that focus on healthier options.

Restaurant Business reported on Technomic’s Healthy Eating Consumer Trend Report which revealed the foods that the newer generations consider “health conscious” choices. These include food and drinks that are plant-forward, antioxidant-rich, immune boosting, high in protein, and gut-friendly. Ingredients that consumers look for include unique fruits and vegetables rich in antioxidants such as goji berries, acai, and chia seeds. Fermented foods high in gut-healthy probiotics are also popular and include sauerkraut, kefir, kimchi, miso, and kombucha.

Healthier options are as much about what you don’t choose to put into your mouth. To this end, many restaurant guests are searching for establishments that make it easy for them to avoid gluten, dairy, or fried foods by offering alternatives. And for those looking to cut their calories, consider offering “half portions” or a selection of tapas or small plates.

After you’ve developed appealing special offers for the New Year, be sure to shout them out on your social media platforms. Take pictures of those new healthy entrees and beverages and post them on Facebook, Instagram, and Snapchat. And don’t forget to tweet about it! And then, remember to engage. According to Forbes, 71 percent of customers are more likely to recommend a company that quickly replies on their social media messages.

If you’re a hands-on, chef-entrepreneur, consider teaching your guests how you create those memorable, healthy meals by offering a cooking class that includes wine-pairing. Joy is shared, and you can be certain that your students will be talking about the meal they learned to create and the fun they had doing it at your increasingly popular restaurant.

Happy New Year!

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Earlier in 2019, at the Restaurant Leadership Conference, industry leaders discussed the all-important fat bottom line. Instead of focusing on growing revenue, however, this discussion revealed important cost-cutting techniques designed to maximize savings and increase profits.

Let’s take a look at what these leaders consider the biggest impact on overall profit.

High Rents

Jason Morgan, the CEO of two emerging fast casual concepts–Original Chop Shop and Bellagreen—sees high rent as one of the biggest challenges that restaurants are currently facing. He believes that this is due, in large part, to the flood of money that hit the industry from the private equity sector over the last five years.

While some entrepreneurs and mega-corporations are willing to pay the price, others understand that, at a certain point, the risk is greater than the reward. Jason is one of those—a CEO who is willing to wait for second generation sites.

Which leads us to the solution for this pain point that many restaurants are facing—patience. Companies are waiting it out, allowing others to sign bad deals that will ultimately lead to second generation space.

Third-Party Delivery Fees

Like many in the restaurant industry, Jason sees third-party delivery fees as unsustainable. In his business, he’s seen these costs go from 100 to 300 base points over the last two years. The problem is that restaurants are feeling pressured into providing this service due to consumer demand, but, considering the rising fees, delivery using third-party services does little to fatten up the bottom line.

One solution is dispatch operations such as Olo. Using these dispatch companies, Jason shifted customers from third-party sites to the restaurant’s site, paying 10 percent per order instead of the commonly charged fee of 30 percent from third-party services. Customers simply order and pay on a restaurant’s existing digital ordering site, and the best-matched quote from an available delivery service provider pops up and is scheduled.

The Numbers

Jason Tipp, an entrepreneur in the Food Service industry and past CEO of Florida-based Pincho, a Latin American street food concept with 12 units, explained that the founders of this successful chain were not from the restaurant industry. Because of this, numbers such as prime costs and food cost were not prominent in their considerations. Once he came onboard, he stressed the importance of these numbers and developed stronger operations in order to reduce these costs.

One simple approach they took was enabling the general managers to really see the operations from the bones up in order to determine how to create a more efficient operation. They examined how long it took to do prep in the morning, how long it took to close a restaurant after the last guess was served, and how many employees were needed for these activities. From there, they were able to develop clear, cost-saving guidelines for their units.

Their other goal was to get their food costs in order—adding up the food they sell, the food they buy, and determining the percentage in sales, which required costing out all of the recipes. As Jason states, “You can’t ask a general manager to hit 28% food costs if the reality is based on input costs in your recipes that is 35%.”

Eric Sheen, CEO of Restaurant Partners Procurement, also see’s food cost as an operational issue. He puts it in terms of the 80/20 rule. In other words, only 20 percent is your actual cost while 80 percent is all operation controls. Therefore, it there is a food cost issue, the problem often lies in the operation, not the distributor.

One of their solutions is switching recipe measurements from ounces to grams, which is a more precise method. He also recommends investing in digital scales. Another area in operations that accounts for an increase in costs is pricing differentiation between the menu and the POS system. An example he uses to describe the impact that occurs when you don’t correlate the two is this: Iced tea was increased by 20 cents which was addressed on the menu, but not in the POS. Say you sell 50,000 iced teas—that’s $10,000 missing from the bottom line.

Another common error is not getting all the items, such as drinks, on the bill. To combat this, some POS systems won’t let your servers send an order to the kitchen before drinks are run up on the check. If the guests are only drinking water, you can put it in at zero charge.

There are a thousand tiny details that go into ensuring the highest profit margin. Another example Eric shared comes from an organization that sells 10 million pounds of chicken wings a year. They pulled out a couple of cases and found that the case count was at about 200, but their spec was for a 240-wing count. The wings had gotten bigger over the years, but the establishment sold by wing, not weight. They estimated that, over the last four years, they had lost about 1.4 to 1.8 million dollars a year.

Contracts

Vince Purves, President of Consolidated Concepts, the largest Group Purchasing Organization (GPO) for multi-unit operators in the U.S., is very familiar with distribution contract negotiation. He notes that it’s easy to negotiate your contract and then ignore it until it’s ready to expire some three years later. It is better, however, to remain engaged with your distributors throughout the year.

In actuality, the supply chain is affecting your cost of goods from multiple avenues including the shortage of drivers in the trucking industry to the price of fuel and insurance. There is much more to rising costs than just the cost of the product itself.

The question becomes: How do you hold distributors accountable to contract prices?

Vince finds that auditability is a key component. “Really make sure what you have from a contract standpoint, whether it’s your distribution or it’s your manufacturer cost contract, is truly and accurately in the system.” Don’t assume that distribution prices are correct. As with most data, it takes a person to key it in, and people are human and prone to mistakes. That’s one of the roles we assume at Consolidated Concepts, making sure our client’s systems are right, their prices are correct, and holding them accountable.” With increasing costs in real estate, products, and labor, it’s clear that restaurants looking to increase their profit margins must maintain tight operational guidelines and develop key relationships in the distribution sector. Consolidated Concepts can help reduce both food and distribution costs—keys to a fat bottom line.

Another avenue that restaurants are turning to is working with third-party consultants that help them develop a supply chain that can stay ahead of weather-related opportunities and challenges. Consolidated Concepts specializes in streamlining the supply chain for multiunit brands through the use of technology, partnerships, and procurement specialists.  

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The warm days of summer have given way to the crisp days of fall. In the not to distant future, meteorologists will be discussing arctic blasts, whiteouts, and blizzards that have left motorists stranded.

So, what does a restauranteur do when one of those stranded trucks is carrying their much-needed supply of fresh food? What contingencies are in place when rain-drenched California leads to a gap in the supply chain when it comes to fresh fruit, tomatoes, and artichokes?

If those in charge of operations haven’t bothered to look ahead, managers will find themselves apologizing to numerous unsatisfied customers and owners will find their profits falling.

While weather is hardly predictable, you can be certain that supply chains will be affected at some point in time by the coming winter. According to Resilinc’s Supply Chain Annual Report, 2018 saw global supply chain disruptions increase by 36 percent, in many cases due to extreme weather events.

Here are the steps you can take now in order to weather (pun intended) the storms ahead.

The Contingency Plan

Take an in-depth look at your needed supplies and the items on your menu that are most susceptible to a disruption in the supply chain. Then, develop a plan that takes into account weather variables that the winter season brings and find options when it comes to both supply and demand. Where there’s a will, there’s a way. Here are five points you’ll want to consider when developing your backup plan.

Substitutions

Accept the scenario that, at some point in the years or months ahead, products and ingredients that are key to your menu will be unavailable. Winter months can particularly disrupt those that have based their business model on the farm-to-table concept with a focus on sustainability and supply chain transparency. Locally sourced produce, meat, and seafood can be difficult to substitute when faced with a winter weather event.

On the other hand, produce derived from national suppliers can travel, on average, about 1,500 miles before arriving at its destination, making them more susceptible to weather-related events related to travel.

For these reasons, it’s important to develop long-term, strategic partnerships with both primary and secondary suppliers—both national and local. Look for suppliers located in different areas or those with varying growing techniques such as the use of greenhouses, warmed by the sun, or hothouses, heated by artificial sources.

After updating your supplier list, take a look at substitutions within your menu. When the summer of 2019 saw an avocado shortage that led to a 129 percent increase in pricing, some restaurants banned the delectable fruit altogether, switching out items such as guacamole with a cheese and bean-based dip or a “mockamole” made with green veggies and peas. Others chose to fool the public with “fake” guacamole made with calabacita, a Mexican summer squash. Probably not the best choice. 

Weather Alerts

Get a map out and pinpoint where all your key supplier’s manufacturing locations originate. Then, set up weather alerts for the areas that will most impact your supply chain. Once you have this visual in place, it’s much easier to find alternative suppliers in areas that would not be affected by the same weather events. The Business Continuity Institute (BCI) found that almost 70 percent of businesses did not have full visibility of their supply chain. Make sure that you fall into the 30 percent that do.

Build a Team

Being proactive requires developing a qualified team that is ready and trained to step up to the plate when a restaurant’s supply chain is threatened. Your supply chain management team should include disaster response—with each member understanding their role in managing and helping the organization through a disaster or weather-related event. One member may take the lead in contacting suppliers on the substitution list while another may procure space for protecting perishables should the disaster strike close to home.

Technology

Technology offers tremendous support in this area. Centrally storing all procurement data optimizes a restaurant’s ability to respond to supply chain disruption, particularly those with multiple locations. According to the BCI, organizations with technology embedded into their supply chain are much likelier to have business continuity arrangements.

Supplier management software can help a restaurant maintain real-time visibility into their supply chain.

Third Party Consultants

Another avenue that restaurants are turning to is working with third-party consultants that help them develop a supply chain that can stay ahead of weather-related opportunities and challenges. Consolidated Concepts specializes in streamlining the supply chain for multiunit brands through the use of technology, partnerships, and procurement specialists.  

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