Building Sales in a Slow Economy

This issue we have another guest columnist, Bill Barker. Bill is a Commercial Segment Marketing Specialist with Gordon Food Service. He has excellent insight into the industry with tons of operations experience as well as 10+ years working for Gordon Food Service. Bill specializes in partnering with operators looking at their business model, engineering their menus and helping them establish best practices to optimize their efficiency and profitability.

If we could only count on Chef Ramsey to enter our facilities and save us from our own nightmares we would all be able to sleep a little better at night. As nice as that would be it probably won’t happen any time soon.

I promised myself I would not join the ranks of many gloom and doom stories about how bad the economy is and the devastation most of our Independent Food Service Operators are facing. I chose to offer some insight on issues and solutions that are real and of concern of the customers I consult with.

In this issue we will highlight the following topics:
Building sales in a slow economy
Quality versus price

“HOW DO WE BUILD SALES IN A SLOW ECONOMY?”
By far this has to be the number one question presented to me on almost a daily basis. The answer is not easy and requires a lot of thought and creativity. The easiest way I found to answer this is by watching what the national chains are doing and then adapting it to your style and brand. Remember these chains teams of people that research how to take market share (from you!)

I am sure some of those listed here will be all too familiar with you however; there is commonality here in what they are doing to gain that market share.

Mimi’s Café like several others have gone down the avenue of smaller portions with lower prices. They have spent very little of their marketing budget getting the word out through table tents, direct mailings and their web site.

Applebee’s has been blanketing the airwaves with their 2 meals for $20.00. The consumer gets to choose one sharable appetizer and choice of two entrees from a list of nine options.

Logan’s Roadhouse offers two meals for $12.99, on a recent visit to a Logan’s on a Tuesday night at 7:00 p.m. they were on a 1.5 hour.

T.G.I. Friday’s has hired Guy Fierri to promote their version of the “Right Price, Right Portion” concept. Here again they are offering some of their popular entrees in smaller portions at a discounted price and at the same time not sacrificing food cost. According to Erik Blauberg, Chief Executive EKB Restaurant Consulting “The most popular menus right now are those $20.00 three course menus. They’re important because you can make money on them and they raise customer counts. These margins may not be where you would like them however; I would rather make 7 or 8 dollars on a menu item than nothing at all.”

Don’t think these casual restaurants are the only operators offering these specials as I ran across an advertisement for McCormick & Schmick’s offering a $29.99 steak and shrimp special. Can you imagine McCormick & Schmicks offering such a deal!

Remember you don’t have to be like the national chains; you can tweak their ideas and make them your own!

QUALITY VS. PRICE
One thing I hope you have noticed is that I never suggest cutting quality to make up for food cost and margins. An example of this would be if you are known for a quality steak house you may consider lower the grade of your steak. As Technomic’s Darren Tristano notes puts it “Consumers want to feel that their dinner experience is a good value regardless of the price point.” Changing your product quality is probably not the best avenue to go down.

There are several ways to control your food costs without changing your quality.

WASTE TALLIES: these sheets need to be posted in the kitchen area and need to be completed for any reason there is food being thrown away. By having this information documented you can react quicker to reducing the amounts being prepped or reevaluate storage procedures. These sheets also need to be tallied each month to determine what level of food cost percent was affected.

LIMITED TIME OFFERS: This is by far the easiest way to drive food cost down and drive profits up. Take advantage of seasonal pricing opportunities or hot pricing specials from your distributors. The cost of producing limited time offerings is far cheaper than redesigning your everyday menus.

STANDARIZED RECIPES: Be sure to have all your recipes documented and make sure the kitchen staff is following them as they are written to ensure no over prepping. This is also important in consistency from day to day. This is especially important in making scratch soups and sauces as this is always one of the areas that, inspires random creativity.

PRODUCT EVALUATIONS: Check in regularly with your GFS Customer Development Specialist to determine what like products are available without cutting quality. GFS has many private label products that meet or exceed the National brands and Government specifications.

EVALUATE PORTION SIZES: Most consumers are willing to sacrifice the larger portions (which they usually take home) for a lower price offering. If you see that your guests are taking almost as much home with them as they eat this may be the time for considering “Right portion, Right price”.

DESSERT MENU OFFERINGS: In economic times such as these many consumers are passing on dessert as a way to keep their dining budgets in line (not to mention all the diets that will be started after the new year). Smaller dessert offerings are a way to offer lower price desserts without giving up your profits. It also provides the perception that if it is small it can’t be that bad for my diet. GFS has the tools and resources to help you build your new dessert menus.