This morning veteran restaurant analyst Howard Penney posted to Twitter a solution to casual-dining’s problems. Go organics!
“I posit that if an increasing number of consumers are eating natural/organic products at home, it is only natural that a greater number of people will seek this alternative when looking for food to eat away from home.”
As evidence, he cited the conference call remarks of Kroger CEO J. Michael Schlotman, who said that the “natural/organic customer is growing in numbers.” It wasn’t clear, however, if Schlotman was referring to his chain or others. Penney, meanwhile, also mentioned Whole Foods and Fresh Market attacted this particular clientele.
“Going into Whole Foods or Fresh Market is an exciting shopping experience for a foodie. These chains have successfully created fun, high energy environments for consumers.”
Yet it strikes us as odd to suggest that organics and natural foods are answers to segment’s serious sales problems (they’ve tumbled for nine years running). After all, such issues as poorly trained servers, aging restaurants and lack of culinary creativity also need to be addressed in a big way.
Last May, for example, USA Today noted, “While Red Lobster’s troubles have been exacerbated by its mostly seafood menu, its problems reflect larger trends in the casual dining industry. There’s a general lack of innovation and a lack of perceived value.”
What’s more, organics cost more in general, and should chains resort to raising prices to cover them how many customers — who may not give a damn about natural or organic foods — will stop coming?
However, the same article noted that Millennials desire healthier menu options. (As for Baby Boomers, data on their desires isn’t clear though they have upped restaurant visits, according to Food Business News.) So while we remain unconvinced that organics are the sole answer, we do concede they could play a role in putting a few more butts casual-dining’s seats.
Sales of organics continue to climb, though today at a slower pace.
Consider, for instance, how easily Olive Garden’s dinner menu could be modified. We bet the asparagus in appetizers and the flour in flatbreads could be switched to organic without significantly driving up costs (Penney did not address food cost or supply-chain issues.) And why not use air-chilled chicken in the 18 dishes that feature the bird? The web menu doesn’t even mention whole wheat pasta, though an employee at an Olive Garden reached by phone said it was available in a linguine dish.
Beef and pork could be sourced from farms that raise animals humanely, i.e., without cooping the animals in tight pens.
We don’t mean to pick on Olive Garden. In fact, we would not be surprised if the aforementioned changes (or a few of them, anyway) take place under the new board of directors at parent Darden Restaurants — one of whom incidentally is RTS Partner Jean Birch. In fact, we strongly suggest that Jean and her new colleagues read Penney’s manifesto.
Posted in Analytics, casual-dining, chicken, Customers, farm to table, Food, organic, restaurants, Turnaround
Tagged natural foods, Olive Garden, organic food
We’re pretty sure you’ve heard enough about ambitious young, fast-casual brands wanting to be “the next Chipotle.” Yet we’re fairly certain you wouldn’t mind learning more about young brands with a chance to multiply. It’s certainly the case with three new-guard concepts. This past weekend RTS Partner David Farkas traveled to Bethesda, Md., to eat at ShopHouse Southeast Asian Kitchen, Cava Mezze Grill and Luke’s Lobster — all of which have multiple outposts in the Washington, D.C., area. Here’s a look at what he discovered.
Big portion: Shophouse’s rice noodles with vegetables and green curry sauce.
ShopHouse Southeast Asian Kitchen: Chipotle, which created ShopHouse, must like the D.C. area, because it has so far opened three units there and is in the process of opening a fourth. It’s not surprising. The District and suburbs are filled with young, educated people who have disposable income and tend to eat wisely. I dropped by for an early lunch and to have a chance to speak with the staff. The two guys on the line patiently explained the offerings — all of them looking very fresh in stainless steel containers — and then proceed to fill my bowl with rice noodles, summer squash, and green curry sauce Three things jumped out at me: the first was an upcharge of a buck for an additional vegetable; the portion size (huge!); and a small, laminated booklet an employee to look up the ingredients in the curry sauce. It was appreciated — indeed, a special touch. When I asked if I could see the booklet, the employee said he’d have to ask the manager, who must have nixed the idea.
The line at Shophouse where food is dished up in classic fast-casual style.
Cava Mezze Grill: Another “dishup” concept that’s heavy on healthful foods, Cava was launched in 2006 and has so far grown to four units, all in Greater Washington. By noon Saturday, people were streaming in for salad bowls that featured grilled chicken or meatballs. Like ShopHouse (only a few doors away), portions are large and very tasty. I particularly liked the chopped and seasoned chicken.
The menu at Cava Mezze Grill can seem confusing at first. Yet it offer specific directions for how to fill a bowl.
Cava, which features well-seasoned Middle Eastern food, didn’t have Middle Easterners working the line; everyone was a native Spanish speaker. Did that detract from the concept? I’m not sure. (The ShopHouse crew also spoke accented English, but I couldn’t tell where they were from.) But many years ago I heard Chipotle founder Steve Ells say that he purposely hired Spanish speakers for his first outpost — people whose English was shaky at best, he added. In any case, customers moved through the line easily and appeared to be having a good time chatting with Cava’s workers.
Behind the lines: Chicken being grilled on a busy Saturday afternoon at Cava.
Luke’s Lobster: There’s no way to turn succulent lobster into common comfort food. It will always remain a comforting luxury food to most Americans. So why would anyone think $15 lobster rolls (from sustainable fisheries) — along with crab rolls, shrimp rolls, and lobster bisque — have a place in the fast-casual segment, where checks average $7-10 per person? (Sold from food trucks, we get. The roll is more of a treat than a regular lunch item.) But Luke Holden, a Maine native, thinks otherwise and has so far opened 13 stores, two of which are in the D.C. area.
Luke’s Lobster roll is filled with claw meat and a minimal amount of mayo.
The Bethesda outpost, with minimal seating indoors, is chiefly for people who like eating at the half-dozen picnic tables out front. And there are lots of those people today. In fact, I eat inside because there’s no room to sit at a table. (Just three employees, including the manager, were pumping out the food, to boot!) But $15 a pop? Bear in mind Bethesda is prosperous; indeed, most of the areas surrounding the District, in Maryland and northern Virginia, boast high median household incomes.
Picking up where we left off in our last post, here are more tips to improve service in your restaurant. Getting service right is especially important today as restaurant visits have remained flat for most eateries so far this year. Blame the situation on the slow recovery if you like. But by all means make certain your guests enjoy and remember their dining experience.
Otherwise they may get used to eating at home, believing it’s the less expensive option. This advice comes courtesy of RTS Partner Len Ghilani, who has been helping restaurants improve their performance for many years.
• Use the word “guests” (as in someone who comes to your home) as opposed to “customers” (as in someone who walks into a muffler shop) This mindset makes a difference.
• Answer the phone before the third ring. Smile first
• Have an “info” list at the host desk for FAQs, so the host has immediate answers: Do you have any gluten-free items? What are your hours? How do I get there from (blank). Does your food have MSG. What’s the dress code? Average price of wine offerings, average price of dinners, etc.?
• Check the cleanliness and paper stock of restrooms frequently
• Have a couple of food items that can be used for what we call “the odd guest out” in the event that one order isn’t ready with the rest. (Example: If the kitchen has 3 of the 4 orders ready for table 32 and the fourth order is going to take longer than a couple of minutes, instead of holding food in the window (which ties up the expediter’s space and holds up the guests), send the 3 orders with a small salad, small app or cup of soup for the fourth guest with an explanation that his/her plate will be right out.
• At the start of each meal period, have the servers at-the-ready to assist the host by seating the first table in their section.
• During busy periods, have a manager or chef “butler-pass” small samples of a signature or specialty item to diners and those on a wait list. This can also be done with a bottle of wine the house wants to promote. Pouring small samples to diners who are drinking wine is a nice touch. (Most vendors will comp a few bottles for that reason.)
• Treat the single diner as if he or she was an expected and invited guest.
• Walk guests to the restroom as opposed to pointing across the room.
• Have large umbrellas available for those days when rain starts prior to the guests’ departure and walk them to their car! (I do this a lot and it blows people away, especially the elderly and the well-dressed women.)
A recent bleak report makes us think it’s time for you reassess your restaurant – particularly the FOH if you’re operating a casual, full-service restaurant.
The report comes from the NPD Group and blames lost business on the widening gap in personal income. NPD cites as evidence the fact that fewer Americans than ever identify themselves as middle-class and the falling number of restaurant visits among low-income people. NPD points out QSR traffic was flat through June 2014 compared to same period last year. On the other hand, visits to fine dining restaurants (average check $40) were up three percent. Total restaurant industry traffic was flat for the period, the report notes.
“Like other retail sectors, the restaurant industry is feeling the effects of this cultural and economic phenomenon,” the researchers say. Combined with continued media coverage of a slow recovery and the fact that most Americans choose some form of limited-service when eating out, NPD may be on to something.
Add to that, less than 10 percent of restaurant visits are to fine-dining restaurants. “With low-income visit cutbacks and not enough fine dining traffic to make-up for traffic declines,” NPD ominously warns, “restaurant operators will need to appeal to the middle-class to fill the gap.” But that portion of the pie is apparently shrinking, too.
So we’ve come up with ten ideas to help your restaurant maintain guest counts. We believe they add value (at little cost to your business) to the dining experience:
• Make dining a little more classy by not auctioning food at the table. Number the seats at the table so the waitstaff or runners can silently drop plates in front of diners who ordered them.
• Allow customers to travel from bar to table without having to first settle a bar bill.
• Greet every customer. Waitstaff should be on nodding acquaintance with regulars, gratefully acknowledging their presence with a smile or brief welcome even when the diner isn’t sitting in their station.
• Make every effort to honor all requests regarding food allergies, etc.
• Keep tables bussed and neat. Let guests to sit where they want.
• Edit your menu, making sure ingredients are mentioned but without off-putting language (example: “Our USDA Sirloin is cooked to perfection”).
• Show generosity. If there’s a mistake, deliver a new dish without asking if the customer wants it replaced.
• Instruct servers to state the price of specials. (And make sure the dish is special.)
• Surprise regulars with a free beverage or a dish you’re testing. Ask for their opinion.
• Remind servers not to clear plates before everyone in the party is done eating (unless a guests wants the plate removed).
• Say goodbye and thank guests as they exit the restaurant. If your host isn’t busy, make sure a compliment accompanies the goodbye.
Posted in casual-dining, Employees, fast food, Fast-casual, Fine-dining, service, Service standards, Uncategorized
Tagged economy, income inequality, middle-class, staff. front-of-the-house
I found myself wandering around Manhattan over Labor Day weekend, and figured I might as well visit Magnolia Bakery’s original outpost in the West Village. It’s a small, tidy corner store on Bleecker St. and West 11th, just off Eighth Ave. It was Saturday morning and customers were trickling in to treat themselves to one of many fine pastries.
A small, tidy store filled with amazing pastries and coffee. Don’t miss Banana Pudding. or Peach Pie.
RTS Partner Chef Andrew Hunter has been encouraging the rest of us to drop by the store, which opened in 1996, or any of the four other outposts in Manhattan, for that matter, whenever we’re there. He recommends Banana Pudding. But Magnolia’s entire menu is inviting.
I chatted with Josh, the store manager for awhile. He told me Magnolia’s owners are expanding the concept via franchising. Which seemed a smart idea given that operation is a high-quality bake shop. Given the right equipments, recipes should be easy enough to duplicate by a trained baker.
I can’t treat myself to pudding in the morning (sorry Andrew). So I texted him, asking what else he suggests. Any of the seasonal fruit pies, he texted back. Peach it was!
Peachy-keen: Call it pie or a crumble, it’s an astonishingly good example of putting fresh, seasonal fruit to good use.
Last spring, an article in the Los Angeles Times about tipping in restaurants caught our attention. It turns out it was only the first of several we have since read on the (now) touchy subject of FOH gratuities. Nonetheless, we bet the vast majority of full-service restaurants in this country are not aware of these rumblings. The habit of leaving money (typically 20 percent of the bill) for table service is so ingrained that to suggest otherwise sounds completely off-the-wall.
Do tips provide an incentive for FOH staff to work harder? Or are tips merely the expected way for servers to reach minimum wage levels in tip-credit states?
Yet a no-tip policy is part of the business model at Brand 158 in Los Angeles, the paper reported.
Owner and first-time restaurateur Gabriel Frem wanted to discourage competition between his employees and create a steady working environment, where everyone could act as more of a team.
“We think that if we stabilize the lives of our employees, they can then focus on the customer,” said Frem. “If people came to work and didn’t know what they were going to make for the week, that tension would eventually translate to the customer.”
The article unfortunately doesn’t tell us how much the owner is paying his FOH staff. Nor does it reveal how many servers (if any) quit when he announced the policy. Still, it’s an interesting way to operate largely because the wage subsidy that customers provided is now gone. Do you raise menu prices to make up the difference? (Frem claims he did not.) And then last Friday we spotted another tipping story about a first-time Canadian operator, which begins:
Less than three months into life as one of Canada’s first no-tipping restaurants, the Smoke ’n Water restaurant in Parksville has returned to the mainstream — tipping is back on the menu.
Owner David Jones said the restaurant has decided to scrap its no-tipping policy in favour of a traditional restaurant model as a result of customer demand.
Apparently, customers insisted on leaving tips and Jones felt he had to oblige them. Jones, meanwhile had raised prices to cover his higher labor costs. Now back to the status quo, servers will make less per hour.
Jones estimates servers will now be making about $20 an hour in tips plus the standard front-of-house minimum hourly wage, while cooks will remain fairly close to their existing wages and there will be tip-sharing between the two sides of the restaurant.
Jones still intends to offset medical and dental costs for his 36 staff.
“He admitted he was sad to walk away from what he believed was a first step in changing how food service is done in Canada,” reported Business Vancouver.
But these two examples — at least insofar as they’re explained –are somewhat uncomplicated. Neither story addresses issues like tip-sharing, tip credit, minimum wage differences within a state, or service charges in lieu of tips. Or whether receiving tips makes your staff work harder than the otherwise would of everyone received the same wage.
Read this argument, which appeared a year ago in Slate, for abolishing tips to grasp how complicated it is to decided whether to keep the practice alive in your restaurant or shuck it all together.
At 11:30 a.m. on a recent Sunday morning, in a Firehouse Subs’ unit a few miles east of Indianapolis, business is already brisk. Customers fill about a third of the seats and the line at the cash register is growing longer.
There’s no question the sandwiches here are tasty and the service friendly and fast. It’s yet another indication the Jackson, Fla.-based chain deserved to be ranked first in customer loyalty among sandwich chains and “was the favorite in friendly service and accommodating children, and took second place in quality food and atmosphere,” according to a recent study by Market Force.
But we think Firehouse Subs’ unusual decor also contributes to performance and has helped the 770-unit chain expand quickly through franchising. Here’s what we spotted on a recent visit that demonstrates Firehouse isn’t a run-of-the-mill sandwich joint.
The concept was co-founded by two brothers who had been firemen. Here’s the evidence, which hangs near the entrance to the restaurant. Note the brick wall.
Hot sauces are nothing new in restaurants, yet discovering so many bottles in a QSR still startles — and sets the concept apart from rivals.
Tables should never be an afterthought. In fact, they should when possible (like these) emphasize the brand message.
Posted in bricks-and-mortar restaurants, chains, design, Employees, fast food, franchising, franchisor, Growth company, quick-service restaurants
Tagged decor, fast food, Firehouse Subs, interior, sandwiches
joint, noun \ˈjȯint\: a point where two bones meet in the body: a place where two things or parts are joined : a particular place
This week the National Labor Relations Board — the industry’s bete noir — ruled that McDonald’s USA can be held responsible for labors abuses committed by franchisees. The NLRB dubbed the chain a “joint employer respondent.” It’s obviously bad news for McDonald’s; it’s also unusual.
Are franchisors like McDonald’s responsible for labor abuses on the part of their franchisees? The government appears to think so, this week naming the burger chain a “joint employer” in 43 complaints.
Officials at the giant burger chain reacted quickly, calling the decision a “radical departure” and vowing to fight the labor board. They weren’t the only ones in a lather. The International Franchise Association described the ruling as a “seismic change” and accused the agency of bowing to union pressure, namely, from the SEIU. What’s more, IFA declared:
This legal opinion would upend years of federal and state legal precedent and threaten the sanctity of hundreds of thousands of contracts between franchisees and franchisors, a bedrock principle of the rule of law.
Here’s the the thing, though. Those contracts are restrictive. Anyone reading them might easily get the impression that franchisees are bound closely to franchisors — and not merely financially but behaviorally, too. Franchisors mandate menus, uniforms, advertising, FF&E, operating procedures, and signage, which they describe in detail in Franchise Agreements and Franchise Disclosure Documents. There’s not much room for negotiation.
That must be the way the NLRB is seeing it. The agency therefore concludes McDonald’s is joined at some crucial level to its franchisees (“owner-operators,” in McDonald’s-speak), whom they effectively monitor and control via contracts. The final sentence in the press release notes:
In the 43 cases where complaint has been authorized, McDonald’s franchisees and/or McDonald’s, USA, LLC will be named as a respondent if parties are unable to reach settlement.
It should interesting and instructive to watch how this potentially hot mess works out.
Posted in burger chains, Employees, fast food, Government regulations, labor, lawsuit, minimum wage, unions
Tagged employees, fast food, Franchise, franchisees, labor, McDonald's, NLRB