The Restaurant Industry Must Change

It is times like these, when markets are going through major upheavals, that industry professionals need to look internally. Now is the time for the food service industry to lift the hood a little bit and make some adjustments.

I have noticed over the last few years, some in the industry have been in a race to the bottom, faster and cheaper. This may not work for new emerging client expectations. The new business paradigm is going to witness clients who are seeking quality and cleanliness over distorted value propositions.

I am not suggesting robot servers or dramatic technology shifts, I am suggesting getting back to the basics. To breed new competency into the industry we have to sharpen our focus and serve consumers better.

Better customer service, fair treatment of employees, new competitive wage offerings and a cleaner supply chain must emerge. As we hopefully will exit from the grips of this pandemic by 2021, consumers need to know the industry is evolving on all levels. As the industry looks at physical changes (new seating arrangements, ect.) we must also create positive work environments. This will translate into a stronger industry.

Simply put, if the industry employee's are feeling good and treated well, our industry will be stronger! This is a people oriented business, as we all look to change, we need to remember - people matter!

Certainly, as we rethink wages and food cost issues; the industry will need to create new pricing and cost models which make better sense. The industry cannot survive on such thin margins. This was a contributing factor towards the proverbial race to the bottom. The industry and the consumer will have to adjust accordingly.

For consumers, more premium food service offerings will come with an added price point.

It's a fact, restaurants must be better positioned to withstand economic downturns. It is estimated that this current pandemic may wipeout up to 75% of the industries current restaurants. This is staggering.

New cost models will make the industry more durable. This is a value proposition I feel most consumers would appreciate and understand. Legacy dining is something we should strive for. This is the idea of kids (now grownups) dinning out where their parents took them when they were kids.

During this pandemic, as the markets try to readjust and stabilize, restaurant balance sheets are unstable and food service properties are going underwater. As the weeks tick by, the food service industry (restaurants) is facing mounting challenges. From closed doors, to partially open doors, to limited take-out services and reduced indoor seating, times are tough for the industry. Likewise, many events (weddings/parties) have been cancelled and almost the entire industry was even shuttered at some point. Literally, only fast food was deemed as “essential.”

Here are a few industry business snapshots:

• The restaurant industry lost an?estimated $25 billion in sales ?and more than three million jobs in the first 22 days of March, as the coronavirus outbreak swept the US.?It’s is much worst now in July.
• Roughly 30,000 restaurants have already closed for good across the country, with more than 110,000 expected to shutter in the next month, according to estimates by the National Restaurant Association.?
• "Any pundit who thinks that they're going to use a recent history — and by recent history, I mean the last 100 years, including the Depression — as a template for what is going to go on here, they're kidding themselves," said restaurant industry investor and advisor Roger Lipton .?

As the dust settles on what is effectively known as the RESTAURANT APOCALYPSE , the industry must make adjustments. As the industry looks to establish new footings, many are grappling with new challenges. From more flexible staffing models, to new service levels. These are alterations that the industry must think through. Amongst all of this, improved customer service must still be a key focus.

As we head into the mid-stream of this first cycle of the pandemic wave, I suggest the food service industry start re-thinking their performance in several areas. With the demand of the new market conditions the industry needs to place a high value on people. This will be key.

It’s the people who run the industry, the employees, the managers, the chefs, the cooks, the servers, the dishwashers, the bussers, the field workers, they all deserve a new level of respect. If the industry is going to survive, we really need to provide an environment where good people feel secure and respected. All employees, regardless of the career, need to feel like they're making a proper career choice. It may be a short-term career endeavor in some cases, but it needs to feel good, people need to feel cared for and respected.

When an employment base feels – at any point – that they hold little value to the owners, that can translates into problems. No one wants to feel like they only have a temporary job, as long as the boss or manager is in a good mood.

The food service industry must treasure its employees and guest experiences must be viewed as time well spent and rewarding.

Likewise, as the competitive nature of the industry tightens up, only the best employers are going to be able to retain the best employees. This will be critical to the industries long-term success.

Here are a few direct observations:

During this pandemic, I was shocked to witness the way supply chain workers (field workers) were treated, that was disheartening. These people are crucial to our survival. Even the U.S. government is recommending that we have a daily allowance of fruits and vegetables. If the field workers are not out working, picking these fruits and vegetables, who will do this?

It's important to protect people who are contributing to our society, this is an issue that needs to be solved soon at the congressional level. This should not be a political issue. Especially if the U.S. government is recommending an activity daily, which involves field workers picking fruits and vegetables. Why compromise the workforce that provides the activity you're recommending? This makes zero sense.

Overall, the food service industry must seek out better business practices across the board. An example where industry practices must be modified relates to short breaks and standing times. In the industry, people are expected to stand all day long . We must adopt wellness practices for food service workers. People in the industry should be allowed to sit while peeling vegetables for example. In some restaurants, employees are expected to stand 8 hours straight, with one short break. Think about the world’s best athletes. Take professional basketball players, they work during a game between 30 to 40 minutes, with multiple sit-down breaks.?If you look at every professional sport - the same is true - they all have benches on the sidelines for a reason.

Also, paid lunch breaks must be offered and honored. Further, meals should be provided. Get rid of splitting hairs on fractional cost basis that make no sense. The industry cannot continue to retain and attract a talented workforce, if we don't have comparable standards and practices.

I would also note, sustainable practices within the food service industry supply chain will also be under some level of scrutiny going forward. People want to eat better. Consumers will start to demand more and seek out those restaurants that embrace only the best agricultural practices. In the coming months menus will have to be refreshed.

A note to consumers/customers, place value on locally run restaurants. Family owned restaurants should not fade away. Over the last twenty years we have seen the emergence of chain restaurants across this country. Chain restaurants have their place, but culturally it would be a shame if we lost more family owned restaurants.

I believe in this new era of food service industry performance, we will see the restaurants with the best practices surviving. Consumers will seek out great customer service, clean facilities & healthy supply chains.

Truly, the food service industry needs to rethink the go-forward strategies. Those that make solid adjustments will be more valued by the new post-pandemic consumer.