Sunday, May 10, 2015

Restaurant Staffing Nightmare Conundrum

The Ready-2-Eat and Heat-N-Eat grocerant niche filled with fresh prepared food continues to boom around the world.  Its success is driven by sales predominantly comprised of mix and match meal component bundling.  All the while legacy restaurant chains are finding the cost of labor is pricing them out of the market. 

The United States economy is on a roll. In April employers added 223,000 jobs, the unemployment rate fell from 5.5% to 5.4%, lowest since May 2008 and restaurant industry added 26,000 new jobs. .Which is all well and good,
The People Report Workforce Index reported that in the restaurant sector, “Staffing pressures across the industry are among the highest we’ve recorded since the inception of this index in 2006,” said Michael Harms, executive director of operations for Dallas-based TDn2K, parent company to People Report.,

The pressure is coming in the form of new competition for well-trained food workers and higher and higher minimum wages according to Foodservice Solutions® Grocerant Guru. In fact this week
New York Governor Andrew Cuomo wants to raise the minimum wage for fast-food workers and he’s bypassing the state Legislature to do so. Cuomo’s asked the states wage board to investigate whether a minimum wage in certain industries are sufficient and recommend a change without legislative approval.

Cuomo said fast-food workers often turn to public assistance to make ends meet because they aren’t paid a living wage. He said taxpayers shouldn’t subsidize corporations that don’t pay their employees enough. This type of populist banter is growing and will likely not end until after the elections of 2016.

Cuomo proposed a raise in the general minimum wage from $8.75 to $11.50, but state legislators rejected the proposal. He raised the minimum wage for tipped workers from $5 to $7.50.  The panel’s recommendations will be released in August.

However the rise of the minimum wage is not that big of an issue for Convenience store operators or Grocery store owners for they are leveraging mix and match meal bundling better given a wider product mix and potential for much higher check averages. Thus the conundrum they are selling restaurant quality food and more, offer more benefits and are growing food sales at 11% & 14% respectively while restaurant growth seems stifled at 2%. Do you have high employee turnover? Are your trained employees migrating to the grocery or c-store sectors? 

Success does leave clues outside eyes can deliver inside sales. Grocerant SWAT analysis are available here.  What are you bundling with you core products? Who are your customers?  Where and how can you sell your customers more? Do you need a Grocerant Scorecard? For more Visit  or or 

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