Best Practices for Surviving in a Cautious Landscape

With guests searching for value, how can local restaurants compete and thrive in such a competitive market and build trust withconsumers who are more cautious about price and safety than ever?

"Value has been the buzzword for restaurants across the map over the past year or so, but while guests want to realize value, food costs have been volatile and credit card processing and other fees cut into the bottom line," Mani Kulasooriya, Co-Founder & CEO of Cut+Dry, an all-in-one platform that connects the industry's three main stakeholders—manufacturers, distributors, and operators, told Modern Restaurant Management (MRM) magazine. Previously, he co-founded CAKE, which was acquired by Sysco and helped create Sysco Labs, a platform for food service distributors. "People tend to go to fast-food restaurants for the speed and lower price point. Local restaurants can and should leverage technology to improve operations and cut costs and time. Then it’s a matter of leveraging their strengths, including unique menu offerings, fresh and high-quality ingredients, community engagement, and a full dining experience. Local restaurants aren’t going to match the ingredient cost level that a big chain can bring to the table, but they can use solutions that increase product sourcing speed, diversity, and flexibility so they can still run rings around the big guys."

Local restaurants aren’t going to match the ingredient cost level that a big chain can bring to the table, but they can use solutions that increase product sourcing speed, diversity, and flexibility so they can still run rings around the big guys.

Kulasooriya said staying on top of menu and ingredient trends is always important for operators as is quickly finding the best combination of quality and price in a restaurant’s purchasing operation is critical to that, and e-commerce platforms not only do that but can highlight the ingredient trends driving it all.

He noted that the pressure on that food costing model is coming primarily from increased labor costs but also from increased food costs.

"Increasing labor costs might be largely out of operator’s hands, but they can play a major role in mitigating the latter with digital tools that provide a rich and diverse array of equivalent and/or alternative products and price points."

In addition to searching for a value proposition, guests are concerned with food safety and sustainability, making it even more of a challenge for restaurants, but technology and vendor relationships can help operators.

"For me, it’s all about transparency," Kulasooriya said. "Guests want to know what items are included in each dish, where the products come from, and other information like allergens. Restaurants should be able to provide this information to anyone placing orders or reading a menu. That’s where ecommerce tools come in – through our online catalog and product database, we’re able to provide a lot of information on an item, including allergens, place or origin, specifications, nutritional information, and more. Without that transparency between vendors and restaurants, there’s no way for the restaurant to provide the proper information to its customers."

Foodtech is here to stay, so operators should be using it to their advantage throughout the restaurant, he noted. 

"As we know, front-of-the-house technology is already standard, and everyone sees the benefit to the customer experience and the restaurant operation. On the other hand, back-of-the-house tech is gaining more popularity thanks to the rise of business-to-business e-commerce. When restaurants are saving time and money in ordering and procuring from their vendors, they can reinvest that time in their customers. Instead of stressing about inventory or if an order has been delivered, staff can focus on customer service and creating great experiences."