Modern Restaurant Management (MRM) magazine asked restaurant industry insiders for their perspection on 2020: What lessons did you learn and what do you feel the restaurant industry learned this year? Here are their responses. Click here for part two.
Anita Adams, CEO of Black Bear Diner
This year actually marked Black Bear Diner’s 25th anniversary since first opening our doors in Mt. Shasta, California. From the very beginning we worked to attract loyal guests seeking an authentic, family dining experience. This year we learned that guests are still seeking that experience even if it needs to move outside of the traditional indoor restaurant setting.
In the last year we’ve been able to really focus on growing our off-premise business, and we found that guests enjoy our home-style comfort food in the comfort of their own homes. We quickly pivoted to offer Family Meals To Go and have continued to expand our third-party delivery partnerships in key markets, which has contributed to our continued growth, even during one of the most difficult years on record for so many restaurants.
Dennis Becker, CEO, Mobivity
With restaurant dining rooms closing unexpectedly and inconsistently from market to market, the industry realized the ability to communicate frequently and rapidly to their customers is critical. Yet at the same time, every marketer blasted out email updates “we’re in this together” filling consumer’s inboxes, rendering email virtually ineffective and driving down open rates from the pre-pandemic abysmal 20 percent.
Marketers who already had a text messaging programs in place discovered that consumers actually opened their texts and messages got through (In fact, 97 percent of the time!). Which suddenly made texting the go-to channel, but only available to the brands who had the foresight to build that channel and accumulate opted-in consumers.
The traditional media channels that brands have relied on, such as TV and radio, suddenly weren’t reaching their customers.
The traditional media channels that brands have relied on, such as TV and radio, suddenly weren’t reaching their customers—college sports, Olympics, major league sports were cancelled, truncated or experienced significant drops in viewership. That only compounded the challenge for brands to reach consumers with updates, including the fact that they were still open for pick-up and delivery.
In fact, the data just came out on November 30) that all marketers (not just restaurants) have been forced to shift their media spend to digital. WSJ reported that more than half of ad spending is shifting to digital platforms as the pandemic caused shifts in marketing strategies. But larger restaurant brands have stuck to traditional media channels and often don’t have the digital chops and platforms in place to leverage. So they are having to radically shift their thinking and quickly put into place the digital channels they need in the new normal.
Customers shifted their purchases to off-premise dining suddenly, leaving many operators flat footed and ill prepared for seamless online ordering, contactless payment and curbside pickup. These are channels that e-commerce brands, like Amazon, have mastered. But most restaurants hadn’t invested in the technology or the processes needed to service the onslaught of digital engagement and transactions they experienced.
The unfortunate reality is that customers aren’t comparing the curbside or app ordering process of Denny’s to McDonalds. They are comparing the experience to Amazon, and anything that falls short of that level of ease and experience disappoints consumers. Operators have been scrambling to fill technological and service gaps to keep up with what appears to be lasting shift to off-premise dining and digital experiences.
Ranbir Bhatia, GM, Benares NJ in Wyckoff, New Jersey
The most important lesson we learned was to streamline delivery and turn it into a serious profit center at a time when we had no other way to service our customers. To execute that at every touchpoint, we had to update the website and phone system so, for example, when ordering over the phone, we could let folks know an order was received and text when their food was ready. This better, smarter use of technology to keep customers informed also helps with ordering and planning.
We are implementing new ways of reaching people instead of waiting for people to come to us.
Second, we are implementing new ways of reaching people instead of waiting for people to come to us. We've explored new modes of advertising, consistent social media posting, we're signing up for Rotary fundraisers and participating more in the life of the community, which is a win-win. When you give back to the community, the community takes care of you. That means celebrating events like Diwali, The Festival of Lights, with a lighting ceremony with Township Committee members and gifts for friends + guests, in addition to donating literally hundreds of meals to first responders.
Third – and this is true of all industries, not just restaurants: being innovative and flexible has tremendous value.
Berekk Blackwell, President of Daily Jam
I’ve learned that things can change quickly! When the pandemic first hit, we all of a sudden had to reinvent ourselves overnight. We were able to put our heads together and put together a really strong plan to support our community, including our employees.
Restaurants over the past five years have been seeing a steady shift towards off-premise dining, many people didn’t think it was worth their time to devise a long-term strategy (specifically full service). The pandemic shoved us through that door and if you were caught without an already existing plan, you had a really difficult time. Restaurants have learned that off-premise is here to stay and that it’s time to start envisioning the restaurants of the future.
Relay Co-Founder and CEO Alex Blum
Relay's technology dispatches couriers to restaurants who have pending delivery orders. We have helped restaurants grow their delivery business and retain more profit on each order. Although indoor dining is opening, little by little, it is still pivotal for restaurants to offer delivery and Relay makes it easy for them to do so. We also help restaurants deliver in house orders, to avoid all the third party fees.
In 2020 the restaurant industry learned that offering delivery and running an efficient operation is necessary to stay alive.
In 2020 the restaurant industry learned that offering delivery and running an efficient operation is necessary to stay alive. We live in a digital age, where consumers want to do everything online. Especially in major cities there is an expectation that with the click of a button we can get pretty much anything delivered to our doorstep. Food delivery was an already booming industry, but when COVID hit it increased even more. Restaurants had no choice but to jump on this trend, if they were not already involved. Takeout and delivery has and will continue to keep restaurants alive this year.
Greg Bolton, Owner, Bob & Edith’s Diner
The lesson that we learned this year is that having good people on your team is vital to success. We were able to upgrade our current systems with technology and open a new location due to the reliable and passionate people around us.
The brands that did not enhance cleaning protocols, embrace to-go orders, and respond to the new priorities of their customer were hurt the most.
One lesson the restaurant industry learned this year is that you need to be quick and adaptable to your environment. The brands that did not enhance cleaning protocols, embrace to-go orders, and respond to the new priorities of their customer were hurt the most.
Jockey Hollow Bar + Kitchen's Chris Cannon
We learned how vulnerable an industry this is. There is incredible pressure to keep prices low – American labor is expensive and this business is very labor-intensive – profit margins have been diminishing for years – we're a breakeven industry at his point – something has got to change. This is a luxury product in many ways, there has needed to be a shakeup in the industry for years, and we're seeing the results right now.
You have to constantly adjust and innovate based on what's happening in the marketplace and environment.
As a restaurateur, you have to constantly adjust and innovate based on what's happening in the marketplace and environment. Obviously, we've learned we need to be more flexible.
Rick Camac, Dean, Restaurant & Hospitality Management at ICE (Institute of Culinary Education)
- It’s important to have multiple streams of revenue.
- Given the sudden nature of the COVID crisis, it’s imperative to have better disaster plans in place.
- To better understand the operational aspect of our business. We need to better understand our operational ratios (KPI’s – Key Performance Indicators). Many operators do not know where their costs should be (what percentage cost of sales should be, where labor should fall, what percentage of sales their rent or occupancy should be, etc.). If you don’t understand those ratios it’s hard to see problems coming (as you may not know them to be problems). Many operators do not understand the importance of purchasing well. They may not be getting the best price, may be accepting less than the best product, may not know that they are being shorted product, that they are being stolen from (whether from their own employees or from the truck drivers).
- To be better capitalized. Most of us go into the business under-funded and therefore not ready for a “rainy day”. Something a lot less serious than COVID, such as hurricane damage or a kitchen fire, could put many permanently out of business. We have no cushion (room for delay or error).
How to smile through a mask.
- To do more with less. For example, use tech to offset having to do more hiring (having customers ordering directly from tablets); tighten your menu so you don’t need as many cook stations or cooks to complete a dish and perhaps use third parties for some tasks that are not your strengths or core business such as HR or PR or even bookkeeping.
- It’s not necessary to have large menus.
- How to smile through a mask.
Sallie Clark, Chief of Sales, EZ-Chow
2020 changed the way consumers interact with restaurants. It has become almost mandatory for concepts to not only have a digital presence, but to offer online ordering. Efficiency, accuracy and safety are ideals that restaurants must be able to provide. EZ-Chow has learned to adapt to these demands in order to support our concepts: be it adding 3rd party delivery, specific report requests or “I’m Here” functionality.
Scott Davis, president, CoreLife Eatery
The power of our teams to rally together while facing the unknown is something we’ve all felt this year. Our success has come from communications, consistency and customer focus.
Getting all of our operations teams (including unit managers and kitchen managers) on calls 2-3 times a week to keep the information flowing both ways was the most critical component for us to execute our plan. The learning was: How to do a solid meeting on the phone in under 30 minutes to keep it focused and productive with upwards of 60 people on the line. Using that time to be as blunt and specific as possible about the challenges (sales, food, labor, COVID) and using the power of the team to open up solutions worked for us to keep our calls engaging and our message consistent.
The way we cook our chicken and steak was a byproduct of our communication.
Using the slowdown and shift of our business during COVID as an opportunity to refocus on basics that the customer experiences daily. The way we cook our chicken and steak was a byproduct of our communication. We’ve used the cadence of our calls and our customer focus to retrain our system on how to get the most out of our high-quality proteins.
1) Lessons we learned – how to be flexible between taking care of oneself + family members, staff + customers. It’s not just about doing something just to get it done … but rather, making sure that what you are doing makes sense and has the ability to work + be successful
2) What restaurants learned – how to adjust in multiple ways. Menus, for example: you can’t rely on what worked before. You have to listen to customers and you have to do more with less staff
Georgios Drosos, Founder & CEO, GFG Café Cuisine
This year was and still is a challenging year. Many operators, especially the ones that were out there alone, suffered and are still suffering. Operators were found neck-deep in unchartered waters in a matter of days. One thing that is evident and is the most important lesson that I learned this year is that nothing is impossible.
We observed, in a very short period, the adaptation of a whole industry to a new reality.
We observed, in a very short period, the adaptation of a whole industry to a new reality. We witnessed operators that were running successful restaurants for years switch operations around in a matter of days so that they could employ their staff again and serve their customers. Many operators stayed open even with bare minimum staffing for their community.
After the initial shock, when restaurants basically liquidated their pantries, the industry switched gears and in one way or another, restaurants were able to once again reach their customers, with some even serving cocktails to-go. The resilience, creativity and hard work displayed are efforts that our industry can be proud of.
Another important lesson that I learned, and I believe the industry learned, is that it pays to be a part of a family, such as the Greek from Greece Café Cuisine franchise family. In times of crisis, there is always hope or resolve if you have someone by your side so that solutions can be found by individuals that are facing the same issues at the same time.
Matt Eisenacher, VP of Brand Strategy and Innovation, First Watch
The restaurant industry has undergone immense changes in a matter of months. We had to re-learn the dynamics of meeting consumers’ needs when they have completely changed. We also found it important to avoid making any knee-jerk decisions based on what we might read one day, but rather think long-term in how each decision ladders up to our business goals and “You First” brand ethos.
We had to re-learn the dynamics of meeting consumers’ needs when they have completely changed.
With this in mind, there were certainly areas, like off-premise, that we knew we needed to fast-track in order to keep providing guests with the First Watch food and experience they know and love. At the onset of the pandemic, we quickly rolled out online ordering and third-party delivery before making the difficult decision to temporarily close 100 percent of our company-owned restaurants in April, in order to focus efforts on new developments that would enhance the safety and efficiency of our operations and ensure long-term success. Since reopening our restaurants in June, we’ve grown our off-premise business by 300 percent, and it remains a key focus area for us going forward.
The restaurant industry certainly took a massive hit while navigating COVID-19 this year. One thing that we learned is that there has never been a time in this nation's history where people have placed a higher premium on their health and the health of their family. Our online and home delivery sales went through the roof in response to people seeking healthy products throughout COVID. We've invested heavily in online infrastructure to support the continued, strong online demand for our products.
Anne Gannon, The Largo Group
Even before COVID, cash flow was the most important indicator of a restaurant's health, and yet surprisingly in the world of increased revenue and growth mindset, it was the most ignored. Then, COVID hit. And all of a sudden regardless of size, every restaurant was in an immediate cash crunch. While this has been a terrorizing year for every restaurant owner, it has also been the biggest lesson in the importance of cash. As we move into 2021, we are seeing restaurants that are running more efficiently than they ever have, some even turning profits with revenue down 30-40 percent. This shift in mindset leaves us hopeful for 2021, as restaurant owners have learned to pivot and adjust to the changing consumer behavior. We believe the trends in restaurants will be a return to growth in the fast casual space, with a slower growth pattern to higher end and resort style dining. Most of our restaurant clients are aware that they will need to make it through the winter, but are hopeful based on the sales in July-September 2020 that sales will rebound in Spring 2021.
Angela Hart, Solutions Director North America, Fourth
We’ve seen the power of simplicity span across all aspects of the restaurant structure, particularly in menu offerings. Restaurant brands have been put through a crash course on how to operate with leaner teams and less guests. As an industry, we’ve learned that we can still execute a confident product despite strapped resources. Restaurant operators, especially those in the fast-casual and fine dining sectors, who have been most impacted during this time, had to swiftly adapt and cut down on the pages of dishes that some brands offer. With our analytics and insights from our restaurant clients, we’ve seen first-hand the value of reducing and simplifying the menu to limit waste and save costs. Given the current climate, it’s critical for restaurants to protect their already razor thin profits and simplifying the menu does this without sacrificing quality and customer experience.
Restaurant brands have been put through a crash course on how to operate with leaner teams and less guests.
Additionally, as many restaurants were forced to operate with a smaller team, we saw that streamlining technology was more important than ever. Specifically, we noticed an increase in engagement on our HotSchedules app as the platform was used to communicate with team members and create a sense of community online.
GJ Hart, CEO of Torchy’s Tacos
From the beginning of the pandemic, we knew constant, clear communication and transparency with our team members and guests would be critical to navigating the fast-moving challenges and changes in the restaurant industry. That focus has continued to play an important role in our approach and is a lesson I think many others in the industry have learned this year as well.
One thing that sets us apart and proved to be beneficial during these unprecedented times is our Managing Partner Program, which pays our participating GMs seven percent of operating profit plus base pay. We’ve found that this partnership model instilled a sense of everyone being in this together, acknowledges that we all have a responsibility to see our business succeed, and that entrepreneurial spirit drove creativity and urgency to move us forward.
Mark Hoefer, General Manager, Le Bilboquet Atlanta
We learned two huge lessons this year. First, whatever your title, whatever you think your job is, get ready to learn every other part of this business because at any moment you may be called upon to do any and everything.
Whatever your title, whatever you think your job is, get ready to learn every other part of this business because at any moment you may be called upon to do any and everything.
Our management team lost our office manager, ran short staffed, and took sections and tended bar to fill in the gaps when the budget was so tight that we couldn’t staff the restaurant as we would have before the shelter in place orders went into effect. We pivoted heavily to curbside and delivery services, hand delivered orders to guests that live close by to the restaurant. Second, and probably the all-encompassing lesson from all of this has been mental flexibility and adaptability; learning to be lean and still deliver a high-quality product and experience with 1/3 the staff we used to schedule.
Jeremy Hood, Owner, davidsbbq.com
A few lessons we learned this year are how vulnerable the industry is to a recession and how overbuilt the industry was. Obviously, this year was an extreme example of a recession, and I'm sure many more restaurants would have survived a normal recession, but with the amount of uncertainty when lockdowns started happening, we shut down for six weeks.
Fortunately, with PPP funds we were able to reopen however are sales are still down nearly 30 percent. However, we have been able to adapt to remain profitable while trying to navigate these weird times. I say the industry was overbuilt because several of our local competitors have not reopened as well as national chains. Despite that sales are still down? There are only so many seats a given area can support.
All restaurants, regardless of size, need a customer relationship management (CRM) strategy to communicate directly with customers more efficiently. Especially when budgets get tight. The brands that have best weathered the COVID-19 crisis are those that already had a strong digital delivery presence—pizza players like Domino's, and quick-serves/fast casuals like Chipotle that already had a strong third-party delivery presence and those with less of a dependence on dining room traffic.
Ingenuity is the mother of invention. When grocery stores experienced supply chain issues and product shortages, restaurants stepped in to fill the gap. Some sold fully cooked packaged meals while others, like Ruby Tuesdays, sold cases of sirloin steaks, five-pound containers of cottage cheese and burgers in bulk.
All restaurants, regardless of size, need a customer relationship management (CRM) strategy to communicate directly with customers more efficiently.
Spending shifts from grocery to restaurants. In 2019, growth in restaurant spending overtook that of supermarket spending, up four percent compared with three percent for supermarkets. Then the pandemic turned the tables: Online grocery sales rose nine in June, month over month. But note – that’s a decline from May, when online sales rose 24 percent and from April’s 37 percent. The tapering suggests that as people return to work and have less time to cook, they are redirecting their meal dollars to restaurants, even if they never leave their cars.
Contactless payment is no longer a “nice to have” – it’s a must.
Alex Karavias, owner of Meraki Greek Bistro and Meraki Coconut Grove
As far as lessons learned; I think the restaurant industry overall learned something that we personally have been practicing for a long time, which is that each restaurant needs its own identity and to recognize what makes them stand-out while at the same time not being one-dimensional. We can’t focus all on “atmosphere” or “guest experience” and not pay attention to the hero – the “food” itself.
How can we ensure that what we serve in the dining room is enjoyed at home also, and how do we communicate this experience to our guests and make them remember this meal and where it came from. For those who hadn't ordered take-out/delivery before, it was a matter of learning and adapting. For those of us who had done it, it was a matter of how to improve it and make guests feel comfortable at the same time – being open, visible, and communicating with our guests has definitely been an important factor for us.
Nick Kenner, Founder & CEO, Just Salad
Personally, I learned so much about my Just Salad team and how well we work together to take on any challenge that comes our way. Our ability to collaborate and share creative ideas is why we continue to not only operate the business successfully, but also push the boundaries of what’s possible in regard to innovation, sustainability initiatives, customer service and more.
I think as an industry, we learned to be even more resilient and entrepreneurial. At Just Salad, we launched an entirely new offering called Just Grocery that made pantry staples and other fresh food items available when they were scarce, or consumers were hesitant to go to the grocery store. That move was instrumental in driving business and maintaining customer loyalty, in addition to having our existing menu.
We learned to be even more resilient and entrepreneurial.
Despite all of the challenges throughout this year, it was inspiring to see so many charitable initiatives across the industry. Restaurants gave what they could to their communities, their guests and their employees because it was the right thing to do in such dire and scary times. We are grateful to Boqueria and The Little Owl for collaborating with us on two menu items that enabled us to give to nonprofit organizations – Relief Opportunities for all Restaurants (ROAR NY) and The Refugee And Immigrant Center For Education And Legal Services (RAICES) respectively. I truly believe the kindness so many restaurant brands have shown has and will continue to be repaid.
Lavu CEO, Saleem S. Khatri
I won’t get into the obvious lesson — online ordering is a must — because it’s so widely accepted at this point, and really, it predates COVID. The biggest lesson for us and our customers was the importance of capitalizing on soaring rates of online usage. We’re all feeling a bit disconnected these days, but with smart digital marketing (including email automation, digital discount codes, QR code marketing, and social media ad campaigns), restaurants can still build lasting customer relationships. They can get more prospects to their online ordering site, convert prospects into customers, and, most importantly, build their lists of both first-time and repeat customers. It’s not entirely true to say that community-building and customer-list-growing didn’t go anywhere. It did. It went online.
We’ve always believed in online ordering as a medium for easy ordering on the customer’s part and easy revenue-driving on the restaurant’s part. The biggest takeaway for us from 2020 was that what is even more essential than having an online ordering platform is having one that doubles as a marketing platform, so you can simultaneously raise profitable order counts and brand awareness.