It’s rough out there for restaurants right now. What COVID-19 didn’t kill, problems left in the pandemic’s wake are threatening to. Restaurants weathered the last few years with flexibility and creative problem-solving.
You turned your parking lots into dining rooms, offered take-out Margaritas, introduced QR code menus and accessed federal assistance funding to fill in the gaps.
You pushed yourself out of comfort zones and tried new things to get through, hoping these challenges were short-term only to find they’re hanging on like a bad cough.
People in the hospitality industry are tired. We know it. Here are three top pain points for restaurants and some tips to help with the headaches.
Restaurant staffing issues
As a restaurant owner, did you think your restaurant staff would head straight back as soon as closures and social distancing orders came to an end? You didn’t account for the Great Resignation. Client after client have labeled staffing for all positions at all levels as their biggest pain point.
While this is an HR dilemma across the board, restaurants have been hit particularly hard. Reasons cited for not returning to jobs in the restaurant industry are low pay, inconsistent scheduling and lack of professional development and promotion opportunity.
Should you just increase wages?
The obvious solution is to increase wages but that alone may not be enough to attract and retain the talent you’re looking for. Staff members are expecting more from their employers, so you need to get creative when it comes to benefits.
Perks and incentives
High fuel costs and a long commute were threatening to cause one client’s valued employee to quit so they helped their manager buy an electric car. Other employers are offering gas cards as a perk. Tuition assistance and reimbursement is huge. Offer a set amount to be reimbursed once the semester is completed. Another perk to consider is initiating a retirement plan.
Invest in your people
All these suggestions cost money and we know times are tight but not all worker attractions are compensation-based. Your employees want to feel part of your success. Communicate openly with them. Also, be clear on how you dole out promotions and pay raises. Consider developing mentoring and training programs so employees can advance.
Increasing pay and initiating other attractive programs may be a long-term strategy that works for you, but if you’re hurting for help now consider restaurant gig work sites like Qwick and Gigsmart.
New revenue generators: curbside pickup + more
If you still can’t find enough quality employees to staff your restaurants, you may want to up your curbside pickup game. And while using third-party delivery services makes quality control difficult and may add to chargeback issues, not carrying inhouse delivery costs could save you money.
Restaurants + supply chain issues
The second pain point restaurants are struggling with today are supply chain issues. As the pandemic enters its twilight days the hope is this problem will resolve itself, but in the meantime if you haven’t already implemented some of these strategies, here are some ideas to consider.
Value of local
Locally sourced farm to table is more than a sales gimmick. It cuts transportation and distribution costs while appealing to customers who support lower carbon footprints and local businesses. Approach local farmers and distributors with a deal. Sell to us, and we’ll promote your brand.
While set menus allow you to plan in advance, changing your menus frequently to accommodate available fresh ingredients is another cost savings option. Combined with locally sourced providers, menu changes won’t just save you money but could be fun for your patrons.
Inflation challenges + messaging
Inflation is likely to head higher, forcing people to make choices on how they spend their money. Passing on your additional costs to consumers is a double-edged sword. It helps keep your head above water but may drive away customers, but it remains a viable option. You may also want to consider framing it as a temporary surcharge rather than a permanent price hike.
Another option to offset rising prices is shrinkflation. By keeping your prices the same but reducing the size of your portions, you avoid sticker shock while keeping costs in line.
New restaurant technology
Keeping up with technology changes is expensive! So no wonder it comes in at number three for restaurant pain points. There have been big advances in point-of-sale systems in recent years. If you’re still using a legacy system, you’re missing out on a lot of bells and whistle advancements. There’s no real cost savings tip here other than a mindset change.
Investing in better technology today can help you save money in the future. New systems offer more in tracking inventory and hours and wages. Newer systems integrate better with QuickBooks and other restaurant specific software such as Restaurant 365 as well as integrating better with your payroll company which results in better data and easier audits.
Additional benefits are enhanced ordering capabilities, price change tracking, loyalty and gift card program tracking, floor plan and table management, ingredient level food cost and seamless integration with third-party delivery platforms.
Of course, updating your tech means you’ll also have to update your cybersecurity package which is also expensive. One idea to consider is using interns from local universities to assist in your cybersecurity needs.
Pain points for restaurants: final considerations
While most pandemic funding sources have dried up, you can still take advantage of the Work Opportunity Tax Credit which gives employers a credit of up to 40% on $6,000 of wages paid per employee who meet certain criteria.
The restaurant business has never been easy, and it’s harder now than ever. Hopefully you’ve found something here you can use to help yourself through this tough time. For individualized advice and an action plan to catalyze growth for your restaurant, connect with someone from Henry+Horne today!
Brad Dimond, CPA