Cause and Effect

The media tells us nearly every day that the restaurant industry's sky is falling. There is one restaurant for every 662 people in the U.S., and 662 unique customers isn't enough to sustain any one of them (unless they have outrageously low rents).

So, competition is stiffer. Apparently, according to Technomic, it's getting even stiffer. Retail meal solutions threaten to cut into market share even more by offering convenient, nutritious meals at an affordable family price-point (discuss restaurant competition at The CommonMan Group).

All this at a time when labor and food costs are rising and higher menu pricing is a looming reality. A menu and price elasticity study by Technomic for American Express provides some solid strategies for raising menu prices, how much, and at what dayparts.
(Discuss raising menu prices and customer satisfaction levels at The CommonMan Group.)

What is interesting to note about these two items - increased competition and rising costs - is a potential solution. When asked about the factors that would cause them to accept higher menu prices, consumers indicated atmosphere/ambience, cleanliness, and friendly staff would make it OK to spend the higher prices.

These are all things within the control of the operator, not external, "woe is me" factors. In all reality, this market is a shake out that will force restaurant owners to provide a dining experience, not just convenient food.

Friday's has implemented a new customer appreciation plan that has some pretty interesting elements to it. Take a look, and then tell us what you think and how you're dealing with the short- and long-term challenges facing the restaurant industry at The CommonMan Group.