Published in CSP Daily News
NRA Show takeaways on takeout; panel offers tips on weathering financial climate
CHICAGO -- The word "convenience" was volleyed about a lot at this year's National Restaurant Association (NRA) Restaurant, Hotel-Motel Show, held May 16-19 in Chicago. An emphasis on takeout, retail and the overall price-value equation reflected the industry's urgent need to accommodate changing consumer habits.
The NRA Show experienced diminished attendee and exhibitor numbers this year, reflecting a rocky year for restaurateurs dealing with less business, and food manufacturers still recuperating losses from the commodity rollercoaster of 2007 and 2008 (final attendance [image-nocss] and exhibitor numbers were unavailable at press time). Nonetheless, the show gave those in attendance the resources to retool their business for the current climate.
In an education session Sunday about "Power Takeout," operators from various channels discussed the importance of affordable, convenient takeout service for those penny-pinched, time-crunched consumers.
"We aren't selling takeout, we're selling convenience," said Aric Nissen, vice president of marketing for Famous Dave's, a Minnetonka, Minn.-based barbecue chain that generates 20% of its sales from takeout. Nissen advised testing food to measure how well it travels, and packaging material to ensure it holds food at the proper temperature and doesn't leak.
Fellow panelist Kay Taylor, director of training with Progressive Group Alliance, urged attendees to create a simple takeout menu and make certain every office, hotel, retail store, dentist and doctor's office, community group and charity in the area has a copy. Send a free lunch to a nearby business so they can taste for themselves what you have to offer.
Taylor also recommended that operators break down the true cost of their program and the accurate return on investment. They should ensure that the price includes the cost of packaging and labor. If an operator thinks he or she can't raise the price to what it needs to be to make a profit, he or she should shrink the portion size to compensate. As Taylor said, "You're not going to be making hamburgers in a year if you're not making the money you need."
The association went against the tradition of choosing a marquee name from outside the industry for its keynote speaker. Instead, in light of the current state of the industry, a panel of operators was assembled to discuss how to overcome their financial hurdles.
A real cross-section of the industry, the panel (pictured left to right with moderator Steve Dolinsky, Chicago's ABC 7, left) consisted of Joseph Bastianich, partner of B&B Hospitality Group; Daniel Boulud, chef/owner of The Dinex Group; Steve Ells, founder, chairman and CEO of Chipotle Grill; Damian Mogavero, CEO and founder of performance management firm Avero; and Sally Smith, president and CEO, Buffalo Wild Wings Inc.
The panelists discussed pricing in this economy, and Boulud recommended analyzing sales not by day or daypart, but by employee. Determine who has the weakest sales, and find out what tools or training they need to improve.
Bastianich discouraged deep discounting: "It sends out a message of desperation, and it's not sustainable." Further, he said, instead of focusing on increasing the amount a person buys per visit, focus on the overall experience you are giving to that customer. "Take a more macro approach instead of a micro approach."
Smith concurred. "I can't tell you what our average check is," she said. Instead, Buffalo Wild Wings breaks sales down by hour or product. If they want a store to increase sales by a certain amount, they relate that to staff in terms they can understand. "Say, 'We want to increase sales by 20 burgers.' They can see that."
Responding to an audience question about getting better prices from suppliers, Bastianich recommended bringing them in on P&L meetings, showing them where your company stands, and asking for three ideas for how to improve your profits. "They know your business maybe better than you do," he said.
As for promotions, Chipotle's Ells explained how he has avoided the typical fast-food promotions, instead focusing on customer service and getting the right employees in those positions. "You can see it in the eyes of your employees who has the passionand that's infectious."