In the restaurant business, discouragement and disappointment are only natural. And despite doing everything right your restaurant sales may not reflect all your efforts. However, the issues need to be identified & addressed objectively.
Facing the facts of negative sales and critical thinking must be at the forefront of your execution plan to save the business.
Here Are A Few Things To Consider That Can Help You Boost Your Restaurant Sales & Profit
“Introspection is a process that involves looking inward to examine one’s own thoughts and emotions”
There are down or off cycles in every industry and the restaurant business is one of the most competitive and dynamic markets in the world. So, at times when your restaurant sales number is spiralling downwards and you fail to retain customers confronting harsh facts and the reality of a problem can be the most pertinent aspect of critical thinking and problem-solving you can do.
As a restaurant owner, you need to constantly ask the tough questions like:
- What makes my restaurant stand out? food, ambience, price, service?
- What do I need to do more? Staff, resources, marketing?
- Why are we in a downward spiral? poor management, leadership, resources, offerings?
Only after deeply analysing and acknowledging your problems will you be able to find a solution. Once you find the solution make a full-proof action plan with long-term and short-term vision along with a plan B. Always have a plan B in case something goes haywire with the original plan.
In every down cycle, though, there’s still someone who’s out-performing, out-manoeuvring and out-competing. In other words: Someone who’s stealing the market share. You need to either be them or learn from them to grow further.
Starbucks South Africa
The case study of Starbucks Coffee chains in South Africa reassures the fact that internal introspection and product analysis vis-a-vis market research is a very important process every entrepreneur must undertake. The first Starbucks in sub-Saharan Africa opened in 2016 through a partnership between South Africa’s Taste Holdings and Starbucks. They missed out on a crucial fact, in geography, where coffee culture has been prevalent for decades; a high-end coffee brand like Starbucks might face the brunt of a competitive market. The taste wasn’t able to sustain owing to the price that local coffee shops would offer. CNBC reported that in November 2018, after opening 12 stores, Taste paused the rollout of new Starbucks locations. It said Starbucks wasn’t making enough money to continue opening new locations.
Before determining how to get out of a financial mess, entrepreneurs must first identify why they got into it in the first place. Spending a considerable amount of time on the reason behind the problem.
In a complicated industry with many ramifications, restaurant management has to worry about gaining insight into the market and business. It is critical to closely study restaurant sales trends.
Many chains think they already have analytics figured out when all they really have is just negative P&Ls and forward-looking forecasts. In that case, streamlining your analytics and restaurant sales trends using an efficient POS system becomes necessary.
Many restaurant owners, particularly the experienced ones have a sense of denial and a mentality that restaurants can hurl themselves out of a problem with tactical promotions.
Every now and then, restaurants seem to get cornered by stiff competition, unpredictable consumer behaviour and purchasing patterns. As a result, they end up making the same marketing mistakes they’ve made time and again. The short-sighted quick fixes can only lead to increased food costs and undermine the brand’s longevity. Promotional marketing can only be a stimulating tool; an enhancer. It is not a long-term solution.
A deeper understanding of the business, season and the industry along with unbiased can help determine what’s truly affecting your restaurant sales and why customers are not choosing you.
Without good, solid and actionable intelligence, restaurant chains will find themselves in a vicious circle of never-ending experiments.
Internal Or External Factors
We often read headlines declaring, “People are Going Out to Eat Less”. While that might be true for some categories and geographies, consumers are still going out to eat and that is for sure.
The restaurants that find success in even the downturns have taken the time to look internally: at their people, products, processes, and physical environment — as well as externally, at their competitors and industry trends.
New restaurant models are coming up like food trucks, delivery, and ATMs which are making quivering shifts in the industry, traditional models and profit margins. It’s important to take stock of the competition, and review what they’re doing — but not copy them. In fact, the key to growing your business and giving it a different identity is often rooted in better differentiation, than to just do what everyone is already doing.
To run a successful restaurant business in today’s time you need through knowledge of Glocalization (globalization + localization) as well as mindfulness of the modern market complexities.
Develop A Phased Approach
Measure twice, cut once!
It’s challenging to distinguish what generates the best (or worst) return on investment if there are no solid goals or strategic plans in place.
Before making permanent changes, challenge old assumptions. Make new ones, then challenge those too, and refine them further.
It’s easy to latch on to just a few disruptions in the industry that are making headlines. While delivery might be a hot topic right now (and it is changing the industry dramatically), that does not mean it is the right strategy for every restaurant chain to employ.
*The Indian F&B industry saw an entirely new segment of online delivery taking over by early 2012-13. Amidst the digitization, the Indian QSR chain Faaso’s decided to change its dine-in + takeaway model and started operating as delivery-intensive kitchens. This saved up a lot of maintenance costs and ensured efficient execution which has now made them one of the largest cloud kitchen restaurant chains in the world with 11 cloud kitchen brands.
It is typical of businesses to lay off a few employees in tough times. Employee management is often cited as one of the key factors holding up a business. In the food-service industry, however, reducing your staff may damage enterprise value in the longer term. Employee retention is crucial to sustaining a restaurant experiencing a sales dip. Employee work perceptions affect company performance to a greater extent.
Positive work perception leads to better service which in turn leads to growth in customer loyalty. Everyone likes going to a place where they feel belonged. The customer experience entirely depends on how well your staff communicates and caters to your guests. Studies have shown that happy workers who feel recognized are more likely to solve difficult problems faster.
Take time to strategize and dig deeper into what might be contributing to low restaurant sales instead of focusing on short-term promotional measures.
Here are some strategic measures that you can take improve your restaurant sales:
- Turn Your Existing Customers Into Promoters
- Upsell menu items
- Optimize Table Turnover Rate
- Leverage social media to create a brand presence
- Focus more on online orders
- Host events to gather a crowd
- Keep a close eye on operational reports and patterns
With Petpooja’s Restaurant POS and Management Platform, you will be able to track not only your sales data but also pin down specifics as to what items are popular among the customers and which factors are slowing down the business. Those who can face up to their problems and take measures to identify and address the root cause of their sales will be best equipped to forge ahead. In certain cases, the answers are hidden in plain sight — though they might require a fresh set of eyes to see them.