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Archive | Restaurant Trends and News

Keep up to date on restaurant and food service industry news and trends, from serious analysis to more lighthearted fare.

Digital Media For Your Restaurant In The Digital Age

As we get further into the Digital Age, restaurants can use digital media to their advantage.

As we get further into the Digital Age, restaurants can use digital media to their advantage.

TVs have slowly been creeping further and further into every restaurant’s atmosphere for years now.  It started with a small black and white television in one corner of the bar so guys could watch the game.  Now many bars have several HD flatscreens showing multiple games and news channels at once, and even dining areas have started to keep a TV or two positioned in strategic corners so customers can keep up on sports and information.

But as digital media permeates our lives more and more, a new era has dawned in how televisions can be used in the food service industry.  Those screens don’t have to be, and shouldn’t be, just used for sports and talking heads anymore.  That’s because the technology has advanced to the point where restaurateurs can engage customers in new ways, and because that technology is now widely available, customers themselves welcome and even expect to be engaged with digital media.

Consider some ways to leverage the digital phenomenon in your restaurant:

Advertise yourself and your specials.  Well placed digital media in your restaurant can become a great vehicle driving sales.  Not only can you promote daily specials and high margin menu items, you can drive brand awareness with digital media campaigns.  And because your medium is a flatscreen TV, it’s easy to change specials and rotate brand messaging often at almost no additional expense.  That means you can experiment with multiple advertisements and specials until you find the ones that work best.  You can also offer many more promotions without having to worry about changing menus, which give you the freedom to find new ways to attract customers.

Become interactive.  Because it’s so easy to load new content onto digital media, restaurants have a lot of leeway with trying new items and promotions. However, the only way to find out if these new promotions are working is through customer feedback.  Of course, analyzing sales is one way to discover which promotions are working and which ones are not.  But digital media can also be a great vehicle for getting customer feedback.  Interactive touch screen monitors can collect information from customers quickly and in a way that engages and entertains the customer.  Interactive digital media can even collect orders from customers and give them a direct line of communication to management.

Entertain while customers wait.  Digital media can also entertain customers while they wait for food or service, and studies have shown that customers who are entertained while they are waiting for service are much more forgiving about their wait times.  As we have already discussed, TVs have been used for decades to entertain customers in restaurants and bars.  Digital media takes this concept to a new level by allowing you to insert advertisements and branding messages about your specific location into more general entertainment.

This means you can not only advertise but intermingle that advertising with entertainment, which makes your advertising much more effective.

No doubt, investing in a digital media system for your restaurant can mean a hefty up front expense.  But if you leverage this technology properly, you can see very real boosts to sales, brand awareness, and customer satisfaction.  And boosting those three factors are vital to any business’ success.

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Can Google Improve Food Safety?

Bar GraphA pilot project currently in development at Google will enable health officials to spot outbreaks of deadly food borne illnesses 7 to 10  days faster than the Center for Disease Control’s (CDC) current system.

Google accomplishes this by tracking queries entered into its search engine by people who are trying to find information on symptoms and sicknesses they’re experiencing.  Google has already launched Flu Trends, which tracks search queries like “flu symptoms” and identifies geographic areas where those queries are spiking.

The data Google collects matches the flu trends published by the CDC, suggesting Google’s information is accurate.  Now Google is planning to apply this system to E. coli and salmonella outbreaks so that the source of the contamination can be contained much more rapidly than it is today.

Seems like a great idea, right?  Not everyone is so excited.  Privacy advocates have already raised the alarm, warning that any database that collects and tracks the behavior of such a large number of free citizens will inevitably lead to abuse.

Google counters that this information is for the greater good and that individuals will remain anonymous.  Of course, anonymity has been promised before when it comes to large databases and it seems like there’s always a leak.  Just ask the thousands of Americans who have had their financial information compromised by leaks and hacks in the past two years.

For the food service industry, Google’s trend tracker could be a double-edged sword.  Of course, food safety is always a primary concern for restaurateurs.  But what if Google, in the admittedly honorable process of identifying a contamination source, starts naming restaurants frequented by people who are getting sick?  Those businesses would be dead and gone in a matter of minutes, regardless of the level of responsibility they deserved for the outbreak.

So where should such a powerful tool draw the line?  And where is Google planning on drawing that line?  The technology is still so new it’s impossible to tell yet, but as the data  we enter into the world’s most popular and powerful search engine gets used to track our behaviors, the conflict between privacy and information seems more and more inevitable.

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Boost Sales With A Free Meal

The Laguna Grill in Long Island, NY

The Laguna Grille in Long Island, NY

An increasing number of restaurateurs are looking to boost sagging sales with value-minded deals to lure customers back into their restaurants.  A particularly successful strategy has been employed by the Laguna Grille in Long Island, NY: a “Bailout Program,” which randomly awards free meals to a table per shift.

The ensuing buzz packed his two locations on a recent weekend and generated some great PR in the local press.  Not only do customers feel that you are commiserating with them about the hard economic times, free meal promos also build brand recognition and loyalty, which in turn can boost word-of-mouth marketing.

Denny’s Restaurants has embraced this hot marketing technique fully.  On Super Bowl Sunday the chain announced it would offer a free Grand Slam breakfast to customers from 6 a.m. to 2 p.m. on Tuesday, February 3.  Denny’s market share has been slipping in the face of intense competition from fast food chains like McDonald’s and Burger King and breakfast-only chains like IHOP.

The Denny’s gambit was a complete success.  2 million customers showed up for their free Grand Slam, and sales have ticked upward since the promotion.  It was so successful that Denny’s followed up recently with another promotion that gave away a Grand Slam for every one purchased.

There are many ways to creatively apply a free meal campaign to your own restaurant, whether you’re a small independent operator or a mid or large sized chain:

  • Encourage customers to sign up for your email list and randomly select a monthly winner from new signups to receive a free meal
  • Follow Laguna Grille’s example and randomly give away a free meal per shift
  • Give away a free entrée or appetizer in exchange for filling out an online or paper survey and providing an email address
  • Hold “happy hour” specials featuring a buy one, get one free entrée, appetizer, or drink
  • Have customers bring in a down economy related item like a pink slip, stimulus check, or foreclosure notice to receive a free meal

The best way to leverage a free meal offering is to gather some information from your customer while they take advantage of it.  The more you know about your customer, the better you can target them for repeat business in the future.  And the more you build your base, the more likely you are to survive hard times.

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Should You Cut Costs In Payroll?

knifeMy recent post, “Missouri Legislature Debates Wage Cuts For Servers” sparked some debate about cutting payroll expenses in your restaurant.  Finding places to cut expenses as revenue falls is never an easy endeavor.  And since labor is almost definitely your number one expense, it’s easy to look there first when considering ways to save money.

There may definitely be some places where labor costs can be reduced, such as cutting back employee hours or eliminating underperforming staff.  All businesses look to their human resources department for cost cuts in tough times.  But be careful here, because cutting labor is a task best left to a scalpel rather than an axe.

That’s because the one thing you need now more than anything else is good customer service.  Actually, you need stellar customer service.  When consumers start cutting back, their expectations of service go up, and the only way to get them to spend at all is to take care of them in every way possible.

Your staff is the best tool you have to make sure every hungry customer that walks through your doors leaves satisfied and full.  If you start cutting back on staff to save money, you could start hurting your chances at increasing future revenue.  Overall morale goes down when people are let go because of hard times rather than performance.  And no matter what, customer service will suffer when you lose experienced staff.

Now is the time to focus on fulfilling the needs of your customers even better than before.  If some staff have been a drag on your operation, by all means cut them now.  But look for other ways to reduce costs before you start cutting quality staff.  Your best customers will appreciate the attention, and hopefully maintain their regular visits to your restaurant.  And new customers will be blown away by your commitment to quality service and hopefully come back, even if times are hard.

While Circuit City isn’t in the food service industry, a lesson can be drawn from their experience.  When sales started declining, Circuit City decided to cut staff as a way to reduce costs and boost profits.  It worked for a while.  But then customers stopped coming in altogether.  Circuit City’s rival Best Buy refused to cut back on customer service, and soon customers were flocking to their stores, not because Best Buy’s prices are better or because they have a better selection, but because Best Buy staff were always there to help.

Circuit City has since declared bankruptcy.  Best Buy may not be breaking any profit records, but they’re still in business, and their customers are happy.  Things could be a lot worse.

What do you think about this issue?  Leave a comment below!

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LEAN Act Gaining Popularity In Congress

The Labeling Education and Nutrition, or LEAN Act, is gaining sponsors and votes in the United States congress.  The legislation would create a national standard for labeling menu items across the entire food service industry.  Consumers overwhelmingly support menu labeling, with some polls showing a 75% majority in favor of nutrition information on menus.

The National Restaurant Association (NRA) and its offshoot, the Coalition For Responsible Nutrition Information (CRNI), support the LEAN Act and are lobbying congress for its passage.  As more and more municipalities and states have passed menu labeling laws, restaurateurs, and especially national chains, have recognized the need for a national standard that will eliminate the growing patchwork of local laws.

The biggest issue many restaurants have with menu labeling is the complicated and sometimes expensive process of analyzing the nutritional values of menu items.  Each ingredient must be separately assessed for its nutritional value, and even slight variations in portions can alter the numbers.

Traditionally, ingredients were analyzed in a laboratory, which usually translated into a lot of time and money to get each ingredient’s nutrition information.  Recently, some companies, like MenuCalc, have compiled databases of ingredient nutrition information from USDA labs, eliminating the need for expensive laboratory testing.

No matter what, menu labeling is coming, and restaurants are going to have to deal with that reality.  A vote on the LEAN Act is expected during this session of congress, and we could see a national standard for menu labeling by as early as next year.

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Missouri Legislature Debates Wage Cuts For Servers

In 2006, voters in the state of Missouri overwhelmingly passed Proposition B, an initiative that mandated a minimum wage increase for hourly workers.  Prop B passed with a 75% majority, and after some debate, Missouri decided that workers who receive an hourly wage plus tips were eligible for the pay increase.

Times have changed since 2006, to say the least.  The economic downturn has hit Missouri’s restaurant industry hard, and now the state’s restaurant association is backing a Republican bill to cap hourly wages for tip earners at $3.52, half the hourly minimum wage of $7.05.  A compromise amendment would cap the minimum wage after a planned increase this summer.

Neither servers nor restaurant owners are happy with the bill.  Servers say the cap is tantamount to a wage cut, something they can ill afford in a down economy.  And restaurant owners say their payroll expenses have skyrocketed since 2006, something they can ill afford in a down economy.

Interestingly, the catch in this whole debate is who would actually be affected by the passage of the bill. 

The average server earns $10 – $15 an hour in tips, which means most if not all of their hourly wage goes to taxes, regardless of whether their wage is capped or is raised slightly.  And this bill would not change a Prop B clause that requires restaurant owners to pay their servers the $7.05 minimum wage if they don’t make at least that in a given week.

So servers who claim they’re taking a pay cut aren’t really getting hit that hard since the vast majority of what they make is in tips.  And they’re guaranteed a minimum wage if tips aren’t sufficient.

At the same time, restaurant owners who claim they can’t afford the current wage are not going to get the wage cut they were looking for.  At best, wages will be capped at their current levels, which does nothing to help restaurateurs who blame the current wages and the recession for their problems.

That means Missouri restaurant owners are going to have to look elsewhere to cut costs and increase revenues.  And in the end, looking to cut costs in staff first is probably not the best option on the table.  After all, wait and kitchen staff are what make every restaurant tick, and in the long run, well paid staff means better sales and reduced turnover, both of which translate into more profits.

Perhaps it’s time for restaurateurs in Missouri to look at other operational costs and see how they can streamline their business before they start putting a lot of energy, money, and time towards targeting their payroll.

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The Pizza Vending Machine

The Pizza Vending Machine

The Pizza Vending Machine

Italian Claudio Torghele has developed a pizza vending machine, complete with dough, sauce, and toppings, all in less than three minutes.  The machine, called “Let’s Pizza,” will knead the dough, spread the sauce, and give you a choice of toppings, including bacon, ham, cheese and tomato, and vegetable.  Customers can watch their pizza being prepared through a window, and the average cost is about 4 euros or 5 dollars.

Torghele hopes to make the pizza vending machine available throughout Europe and North America.  The machine has already done very well in test markets and its novelty always seems to draw crowds of onlookers, which bodes very well for sales, especially as people begin to look for more affordable options in a down economy.

Not everyone is so enthusiastic, however.  Traditional pizzeria owners in Italy have criticized the pizza machine as a cheap gimmick that sacrifices taste and quality.  Torghele responds that sometimes people are looking for value, convenience, and fast delivery over top quality.

The verdict on the pizza machine will be passed in the streets, and so far, it appears the average consumer loves being able to watch a great little pizza prepared fresh by a machine quickly and affordably.

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Gordon Ramsay: The Restaurant Black Widow

Celebrity chef Gordon Ramsay’sshow Ramsay’s Kitchen Nightmares USA has been a huge hit, garnering thousands of American viewers and elevating the chef’s celebrity even further.

Unfortunately, the restaurants he’s supposed to be helping are dropping like flies in the wake of his black widow touch.  The show’s premise is to bring Ramsay’s expertise and creativity into a struggling restaurant and turn the place around.

But it was revealed recently that over half the restaurants that have appeared on the show have since gone out of business.

Some owners and managers complain that Ramsay’s management style, which includes making everything fresh every day and using high-end product and ingredients, created a standard too expensive to maintain in a down economy coupled with rising food costs.

Other victims of the show are less diplomatic, calling Ramsay a jerk who thinks he can impose his lofty standards on any restaurant.  Some are even suspicious it doesn’t really matter to him whether a restaurant on the show makes it or not, as long as ratings remain high, which they have through multiple seasons in the U.S. and the U.K.

Perhaps the most important lesson to take away from the Ramsay “kiss of death” is that every restaurant is different, and managers and owners have to account for the many divergent factors that make up the success of any establishment.

Of course, the ideal situation is to be able to attain Ramsay-style high standards and still make a profit, but any restaurateur will tell you that the situation on the ground is hardly ever ideal.  Instead, being highly adaptive, creative, and flexible are the traits that will eventually spell success in the food service industry.

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Social Media Marketing’s Dark Side

Plenty of national food service companies have been eager to wade into the social media world as a way to engage and recruit customers.  Dunkin’ Donuts has tens of thousands of friends on Facebook.  Other restaurants, large and small, have pumped up their online presence in recent years and the internet has become a very important medium for advertising.

But social media also has a dark side, because once you throw your brand out into cyberspace, anyone can praise it.  Anyone can also tear you down.

Take the Jack-In-The-Box example.

The national chain ran a Super Bowl ad this year in which their long-time mascot, Jack, was hit by a bus.  Jack-In-The-Box followed the ad up with a social media marketing campaign that allowed users to post get well cards for Jack.  The chain leveraged several social outlets, including YouTube, Twitter, Facebook, and Flickr.  Thousands of people responded, and a good portion were great for brand-building.

However, a significant percentage were vulgar, brand-bashing, and downright offensive.  In the “old days” (read: anything more than 3 years ago) relinquishing power over what could be said publicly about a brand was pure marketing sacrilege.

But progressive marketers these days have recognized a couple key sea changes, especially as the Millennium Generation gains buying power.

First, people 30 years old and younger in this country have been bombarded with advertising since birth.  They know when they are being pitched and they are likely to be skeptical.  Second, anything that lacks authenticity is Dead On Arrival, and a waste of marketing dollars.

Hence Jack-In-The Box’s willingness to let consumers drive their campaign, even if it meant allowing Jack to get beat up in the process.  In the end, the ultimate authenticity is a surrender of control over a brand.  The most authentic marketing is word-of-mouth, and in an era of unprecedented connectivity, word-of-mouth can travel at lightning speed.

Campaigns like the “Get Well Jack” one are ways to harness the powerful, if unpredictable, world of electronic communication.  Just be ready to experience the dark side of social media marketing, where brands are passed through the ringer by anonymous pranksters.  Luckily, most brands come out the other end bruised but truly “authentic.”

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Waitress Steals Credit Card Info For Small Fee

Credit CardA waitress at Bubba Gump’s restaurant in the French Quarter of New Orleans was arrested recently and charged with possession of fraudulent documents and credit card skimming.

Jaleesa Jimerson reportedly used a skimming device to record the credit card information of up to 50 Bubba Gump customers.  The device was given to her by a man and a woman who also paid Jimerson $220 for her services.

When police showed up at Bubba Gump’s with a warrant, Jimerson excused herself and tried to hide the skimming device in the bathroom.  Police soon found it and arrested the waitress.  She received 108 counts for each card she skimmed, making for a massive indictment.

The judge in the case, Gerard Hansen, set a $5,000 bond for each count, and since there were so many counts, it soon added up to $1,080,000.  Jamison remained jailed after the hearing since apparently the pay isn’t so good in credit card skimming.

There was no word if any money was stolen using the swiped card info.  Jimerson still awaits sentencing.

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