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Chefs Say Cut Portion Sizes, Not Ingredients

Chefs Say Cut Portion Sizes, Not IngredientsOne of the biggest trends in food service these days is nutrition labeling for entrees and the development of “healthy” menu items that appeal to growing consumer concerns over what they eat.

A recent survey of 433 chefs conducted by Penn State and Clemson universities has shed some light on what chefs are thinking about the nutritional content of their menus.  In general chefs think cutting portion sizes, rather than adjusting recipes or ingredients of existing menu items, is the answer to developing a healthier menu.  Messing with already popular menu items is anathema to most chefs, which accounts for the reluctance to change recipes in order to improve calorie counts.

On the other hand, the same chefs surveyed overwhelmingly favored introducing a new reduced calorie item to their menus as opposed to altering an existing favorite.  There also seemed to be pretty solid agreement that a reduced calorie addition would be popular and sell well.  Chefs in general are still split on the question of menu nutrition labeling, however, with even numbers believing calorie data would help or hurt sales.

With increasing wholesale food prices and the ever increasing costs associated with managing and storing inventory, the trend towards smaller portions in restaurants probably isn’t going anywhere.  As the demand for “healthier” entrees increases, smart restaurateurs will find ways to dovetail the need to cut costs with the demand for reduced calorie counts on menus.

The marriage of these two seemingly divergent needs could be a win-win for restaurants.

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The IRS Wants You To Buy Restaurant Equipment In 2009

IThe IRS Wants You To Buy Restaurant Equipment In 2009f you have already purchased restaurant equipment in 2009, or are planning on doing so before the year is up, make sure you get your accountant to take a special 50% depreciation allowance for all equipment that is purchased, installed and used by December 31st.

This tax provision was extended by President Obama’s stimulus bill from 2008, and it provides an excellent benefit for restaurants that need to purchase new equipment but are tight on cash in a struggling economy.

If you’ve already taken the leap and purchased new equipment this year, congratulations!  You’ll be able to take this 50% write-off on this year’s taxes with no problems.  If you’re not sure if now is the time to buy, maybe this is the thing that pushes you into shopping mode.

That’s because this incentive is only good through the end of the year, and the kicker is that the equipment must be installed and in use by the end of the year.  You can’t just wait for December 30th and order the equipment you’ve been wanting and still qualify for the credit.  So now, with two months left, might very well be the right time to act.

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A National Tax On Soft Drinks?

A National Tax On Soft Drinks?Soft drinks are “liquid candy” that provide no known nutritional benefit to the people who consume them, according to the Center for Science in the Public Interest (CSPI), an advocacy group.  The epidemic of obesity that has swept the United States in the past 25 years, especially among children, is in part due to soft drinks.  All restaurants serve a variety of sodas as a staple on the menu.  Now the CSPI is calling for a national tax on all soft drinks, similar to the so-called “sin taxes” on alcohol and tobacco.

The CSPI has even set up a Liquid Candy Tax Calculator that allows you to see how much revenue even a 1 cent tax could raise for government health programs.  According to the Tax Calculator, $95 billion is spent annually battling obesity in the U.S.  While a soda tax may not solve the problem of obesity, it might at least make people think twice about buying soda on a regular basis and can raise millions, if not billions, of dollars for the cash-strapped federal government.

Some states, like New York, have already introduced legislation targeting soda with a tax.  A national tax would prevent a patchwork of local taxes from cropping up across the country.  The National Restaurant Association has yet to weigh in on the proposal, but (perhaps not surprisingly) the American Beverage Association has come out strongly against the idea, claiming such a tax would hurt American families.

The CSPI has proposed that the revenue be used to fund healthcare reform, a major item on President Obama’s agenda.  Judging from the size of the deficit, any help on the revenue front is better than what we have now.

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Restaurants Deliver Entrees And Keep Sales Up

Restaurants Deliver Entrees And Keep Sales UpMore and more restaurants are relying on alternative sources of income to help them weather the current economic storm.  Many sit-down restaurants are turning to delivery as a way to boost their sales.  If you had told any restaurateur 10 years ago that they would be relying on the delivery of casual and fine dining entrees to grow sales, you would probably have been laughed at.

Oh, how quickly things change.  A December 2008 National Restaurant Association survey revealed that 50% of consumers would patronize a restaurant more frequently if it had delivery and/or take out options.  4 out of 10 casual dining restaurants and a full third of fine dining establishments think delivery is going to become a huge trend in their niche.  Those are some pretty impressive numbers.

Consumers have embraced the prospect of a delivered meal from their favorite restaurant for several reasons.  Most importantly it saves them the two things they are short on: time and money.  The time factor is obvious, but what may  not be as apparent is how restaurants can be perceived as offering a deal on entrees delivered to the door.  There’s no way it’s arriving for a better price than served in the restaurant.

But when you factor in all the costs most consumers encounter just to get to your front door, it starts to make sense.  Between gas, baby or dog sitting, and parking, consumers are starting to realize that paying a little more at their front door is actually a deal.

Another important factor has made working out the logistics of delivering food for a traditional sit-down restaurant much, much easier: the internet.  Already two websites, Delivery.com and GrubHub, will take and process orders as well as pick up and deliver the food, making it easy for operators to add service without having to hire or train staff.

As I have discussed in a past post, online ordering is a seemingly inevitable trend in the food service industry.  As consumer expectations trend towards food service that doesn’t necessarily involve your dining room, restaurants are going to be forced to develop new ways to deliver their menu.  The good news is that these new trends shouldn’t require lots of new investment from restaurants.  Whether you decide to use a third party or simply hire and train your staff to handle outside orders and delivery, this is a trend that will help you diversify sales revenue without having to spend a lot of money.

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Do Price Reductions Dilute Your Restaurant’s Brand?

Do Price Reductions Dilute Your Restaurant’s Brand?In a very well written post on Waiternotes.com titled “Self-Fulfilling Prophecies,” the author examined in-depth the price reduction strategies the owners of the two restaurants where he works have employed over the last year.  The main point revolved around how cut-rate specials were bringing in more traffic (although not more than before the recession) but that the reductions were hurting profits, check averages, and the restaurant’s brand overall.

Considerable worry has been circulating the food service industry about the issue of price reductions and customer expectations.  There is no doubt that most of the industry has embraced aggressive pricing as a way to keep traffic and sales up, and for the most part this strategy has accomplished those two goals.

But at what price?  Servers like the one on Waiternotes are understandably upset because check averages have surely plummeted and are unlikely to go up again any time in the near future.  Perhaps a more creative compensation strategy is in line.  The argument that this dilutes a restaurant’s brand and/or reputation is a compelling one, but not without its problems.

For starters, study after study have shown that the new economic reality means consumers are putting a premium on value.  The point is debatable, but in general this seems to be a function of consumers pinching their pennies even as the economy begins to improve.  Some have even suggested that the freewheeling heavy spending days of the recent past are permanently gone as consumer psyche shifts.

That means restaurants, along with most other businesses, are going to have to adjust their products and marketing to reflect new customer expectations.  Prix fixe dinners, half-portion specials, and all the other strategies restaurants are adopting to get customers in the door are a symptom of the times, rather than an ill-advised effect.

The jury is still very much out on whether restaurants can survive their own race to the proverbial bottom of the price (and consequently profit margin) barrel.  But I suspect that those who figure out how to walk that tightrope between value and profit will become the new power players in the food service industry.Do Price Reductions Dilute Your Restaurant’s Brand?

A good example is Subway’s $5 foot long promotion.  The price is through the floor.  The competition scrambled to catch up and then quickly undercut the $5 price.  The dark prophecies of brand devaluation and vanished profitability spread quickly through the crowd of panicked onlookers.  6 months after Subway launched the promotion, they’re rolling in profits.  It doesn’t matter that Quizno’s undercut their $5 price.  Customers still see a value there and Subway is doing much more business at a lower margin, which still translates into more net profit.

Which brings me to an interesting article from the Harvard Business e-newsletter titled “Why High Profit Margins Don’t Prove Smart Pricing.”  There is a trade-off between volume and margin.  Those two lines intersect at some point for any business.  For the past two decades, the prevailing model was to pursue higher margins in smaller and smaller niches.  Consumers, lulled into a false sense of security by easy credit, happily paid more for products that seemed suited just for them.

Now the trend has been reversed, and value is the watchword of the day.  That means price reductions are probably here to stay, and because consumer expectations have changed, will more than likely improve brand perception rather than dilute it.

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Obama Fried Chicken Stand To Change Name

Obama Fried Chicken Stand To Change Name

Politically incorrect? Or just an immigrant’s attempt to honor the President?

A fried chicken stand in Brooklyn, NY changed its name recently from Royal Fried Chicken to Obama Fried Chicken in honor of the United States’ 44th President.  The stand’s owner, who remained anonymous but was represented by employee Mohammed Jabbar, thought the renaming would celebrate President Obama’s election and create goodwill in the neighborhood.

Unfortunately, many community organizers and activists aren’t on the same page with Jabbar, who is an immigrant.  Within days after the fried chicken stand’s new signs went up, Jabbar started receiving complaints that the new name was offensive and racist, and reinforced stereotypes about African-Americans.

Brownsville, the Brooklyn neighborhood where Obama Fried Chicken resides, is made up of primarily minority populations.  Reactions on the street were mixed.  Some didn’t see the big deal with the new name.  Others thought it was extremely offensive.

Obama Fried Chicken’s competition, located right across the street, has taken advantage of the controversy by attracting customers who are offended by the name.  Obama Fried Chicken has promised to rename themselves soon, and Jabbar can’t wait for it all to blow over.

In the end, it appears to have been an honest attempt to honor President Obama, although a White House spokesman did say that the Oval Office has long looked down upon attempts to use the President’s name for commercial purposes.

It’s also a strange phenomenon to see new immigrants who are unaware of America’s troubled past offending older minority groups like African-Americans without realizing it.  And it appears that political correctness has won out again.

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Man Who Wanted To Be A Hooter’s Girl Settles Class Action Suit

Man Who Wanted To Be A Hooter’s Girl Settles Class Action Suit

Please, God, say it isn’t so

Local man Nikolai Grushevski brought a class action lawsuit against a Hooter’s franchise in Corpus Christi, Texas after the restaurant passed on hiring him as a waiter, who are also known as the Hooter’s Girls.  Grushevski’s lawyer claimed he was proud to have stood up for his rights under the Equal Opportunity Employment Act.

Hooter’s settled the case out of court recently for an undisclosed amount.  The restaurant chain was expected to mount a strong defense known as the “Bona Fide Occupational Qualifications,” which has also been used by Playboy and Sports Illustrated to defend their female-only hiring policies for models.

The rumor mill has said that Grushevski got $1,000 and his attorney’s fees in the settlement, but this was unconfirmed.  Hooter’s settled a similar suit in 1997 for $3.7 million, and both that settlement and this one stipulated that Hooter’s would be able to continue its female-only hiring policy.

There was no word on whether Corpus Christi Hooter’s patrons would have wanted to see Grushevski in a tight white Hooter’s Girls T-shirt and those short shorts when they came in for a burger and a beer.  Perhaps it’s better for us all that Hooter’s was willing to settle this one out of court.  It sure does seem like a shady way to make a grand, however.

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The Public Smoking Ban Debate Continues

The Public Smoking Ban Debate ContinuesLos Angeles has taken the ongoing regulation of smoking in public places a step further and banned smoking in the outdoor patio areas of restaurants.  The city council voted unanimously in favor of the ban, despite repeated pleas by local restaurants that the ban would hurt business in an already down economy.  The ban will take effect one year from the time the mayor signs the ordinance.  The city plans to take that time to educate the public on the new ban and the dangers of second hand smoke in general.

It’s an argument the restaurant industry has been using for the last ten years as it attempts to maintain the status quo on smoking.  Unfortunately, a growing body of evidence shows there is no negative effect on business in restaurants when a smoking ban goes into effect, and some areas have even seen a slight rise in revenues after a ban as non-smoking patrons (who make up 75% of the population) stay longer and spend more.  The effects of second-hand smoke are also well documented, and some studies have shown a 40% drop in heart attacks in public places after the implementation of a smoking ban.

The reality is, smoking bans are here to stay, whether they regulate patios, dining areas, or any other area of a restaurant.  The argument that business will suffer also seems to ring more and more hollow as restaurants in areas with comprehensive smoking bans continue to survive, and even thrive, after the passage of the ban.

National public smoking regulation is probably coming in the next five years.  Even dyed-in-the-wool tobacco states like North Carolina and Virginia have passed public smoking bans in recent years.  It’s time for the restaurant industry to accept the reality of the situation and adapt their businesses to change rather than fighting fruitlessly to maintain the status quo.

For a more in-depth discussion of smoking bans and how they affect restaurants, plus an interesting debate in the comments section, read this public smoking ban post.

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Why Employee Benefits Are A Food Safety Issue

One of the biggest sources of contamination in any restaurant are the people who prepare and serve your customer’s food.  According to official food safety regulations, sick workers are supposed to go home, or even better, not come in at all while they are capable of spreading germs.

Unfortunately, two realities make sending a sick employee home a pipe dream in most restaurants: it’s a difficult regulation to enforce and going home means no pay for most food service workers.

Lack of enforcement means employers have little incentive to send home sick employees, and while the potential contamination of food served is a more compelling reason for employers, it’s often far too difficult to trace the origins of common sicknesses.  That means restaurants with sick employees on the job are rarely, if ever, blamed for spreading common colds or the flu.

An even bigger problem is the dilemma employees face when they’re sick: they can either stay home and not get paid or come into work and make money.  For a majority of food service workers, skipping a day’s pay isn’t an option.  That means they come into work sick.Why Employee Benefits Are A Food Safety Issue

A recent study conducted by the Restaurant Opportunities Center (ROC) is making its rounds through the media this month that highlights the numbers of food service workers who report coming into work while sick.  According to their research, over 60% of employees in the food service industry have reported working while sick.

The ROC advocates paid sick days and health insurance benefits for restaurant workers, and their study found a number of employers who support those ideas.  In theory a simple solution like paid sick leave sounds like a great idea that anyone could support.  There’s even substantial evidence that indicates basic employee benefits like health coverage and paid sick days actually save businesses money because turnover is reduced and employees work harder for an employer that supports them with benefits.

But the reality is that asking restaurant owners to face a permanent increase in payroll costs is going to be tough to swallow.  This is especially true after a year and a half of recession.  Owners are in survival mode and probably will remain that way for some time to come.  That means they’re not going to be very receptive to ideas that involve spending more money, especially for a program like paid sick days with an abstract benefit like reduced turnover.

Tune in tomorrow for a post exploring the ways independent restaurant owners can improve the benefits they offer employees.

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Managing Social Media Marketing For Restaurants

Managing Social Media Marketing For Restaurants2010 is the year of social media, and the food service industry has really started to embrace the world of social in a big way.  As I’ve mentioned on The Back Burner before, the biggest expense marketing with social media is your time.  That’s good news for tight marketing budgets but bad news for restaurant managers and owners who are already overworked.

The time commitment is especially large at the beginning of a restaurant’s social media campaign, before a critical mass of followers has been built.  Once the ball gets rolling, it can still be a big commitment to manage all of the different outlets – twitter, facebook, foursquare, etc.  It’s often not long before you feel like you could do nothing else besides manage all those social media accounts and still not have enough time.

That’s why I was intrigued when I heard about Single Platform.  It’s a social media marketing solution designed with restaurants in mind.  As the name implies, Single Platform allows restaurateurs to manage different social media accounts and post information to those accounts in one place.

“Through SinglePlatform, you can enter one-time, recurring specials, events, game packages, tv schedule etc… and all of your profile pages are updated across facebook, twitter, myspace, citysearch, urbanspoon, foursquare, gowalla, their website and their mobiel site, as well as dozens of other review and social sites,” says Wiley Cerilli, Single Platform’s CEO.

Those features can free up a lot of time for busy restaurants who need to be focusing on the day-to-day operations of their business without losing the ability to penetrate the social media market with specials and events.  Over 3,000 restaurants have signed up for Single Platform’s service, and the company is pushing their social media marketing message across the entire food service industry.

“Social media allows you to share which places you like in an incredibly viral way. 7 people liked comments on a bar of ours in the upper east side of NYC. Their opinions were shared with over 3,800 friends of theirs. There is nothing more powerful than that. Restaurants need to be able to have people “like” and follow them so their friends can see that as well,” says Cerilli.

For the skeptics who have not yet embraced the social media craze, finding a cold, hard number for the business actually generated through social media can be incredibly difficult.  Single Platform does offer tracking that allows users to watch trends in fans and link clicks in social media posts, but identifying the customers in your restaurant who are there because of your efforts online can be extremely difficult.

That’s why more and more businesses are starting to view social media as less of a marketing tool to drive new business (although it is certainly capable of that) and more of a critical touchpoint in the life cycle of a customer’s engagement with your restaurant.

In other words, engaging customers online either before they eat in your establishment or after helps reinforce your brand and keeps your name in the conversation.  There may be many factors besides social media that affect how a customer actually arrives at your door, but in the end you can’t afford to allow not hearing about you on the hottest sites on the internet like twitter and facebook to negatively affect that decision.  Single Platform is indeed a good foundation from which you can start getting more involved in that conversation.

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