Is your Restaurant Business Model Relevant in 2019

Millennials are disrupting legacy restaurant business models.  Consumers are dynamic not static and business models must be dynamic as well.  Consumers today are blurring of the lines within the restaurant sector creating discontinuity as more and more customers asking does that restaurant meet my needs today?

Consumers are focused on flavor, portability, meal components, price, mobile payment, mobile ordering, and delivery more and more according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  So, is your restaurant evolving or is your brand messaging like Kodak of the 1970’s?

 Most of us of a certain age remember that that Kodak is nearly out of business. Growing up in the 1960’s and ‘70’s, every family had a Kodak Camera and I still have one of mine. Those yellow boxes were everywhere and getting your very own Kodachrome camera was seemingly a rite of passage, heck, Paul Simon even wrote a song about it.
As digital cameras gained popularity, Kodak stuck to what they believed. They sneered at digital’s quality, righteous in their knowledge that Americans would NEVER give up shiny pictures for their photo albums.

Today, cell phone cameras take most of the pictures and they are rarely printed. Kodak will shut the doors, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook.

Being dead and correct is not a great strategy.  Today chain restaurants are either growing or dying much the same as Kodak. Simply look at restaurants that filed bankruptcy of late: Claim Jumper, Mr. Pita, Friendly’s, Chevys, Sbarro, Perkins.  They are not all dead but they have been far from right.

These are statements frequently heard from legacy restaurant operators. Like Kodak, crystal clear that what has always worked will continue to work.

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we deliver.
• We don’t allow our brand to wander, we protect our brand.
• We don’t use online ordering, I-pad ordering or voice screen ordering.
• We don’t advertise on Google, Twitter or Facebook.
• We don’t open for breakfast.
• We like the umbrella approach each store different personality but under one umbrella.
• Video menus and video signage is visceral gimmickry.
• We don’t measure ingredient’s, we create daily specials and simply show employees how to make it
• We can’t raise our menu prices.

How did a dominant brand and sector leader like Kodak, in a rock-solid consumer staple lose everything? Simple, they determined the market, the direction of that market and took the steps to conquer it.  If that sounds like your restaurant, retail food sector or niche leader, you better keep reading.

There is little about today’s market, the consumer or food marketing / promotions that was predictable 3 years ago. In the next three years the rate of change will continue to increase. So, let’s look at the above list:

Reliability and a comfortable working relationship are correctly a key to success.  However, if you find your team is blaming the economy, minimum wages increase, cost of health care and rising food cost for disappointing results. Do not forget that many restaurants companies are growing both the top and bottom line, number of units and garnering market share.  It might be time for Outside Eyes. 

We always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk of Livingsocial and Groupon and how can you know what works. Here is the point, what you measure you manage. All advertising must have a objective that is clear and measurable to insure a proper marketing ROI.
We don’t deliver – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing.  Delivery is not about you. That’s right it is about the consumer.

We protect the value of our brand and its integrity for the consumer, our shareholders and stakeholders.  We know the consumer is dynamic not static, but our customer’s comeback because we have a brand promise and they trust in us to keep that promise. Sounds a lot like Kodak, don’t you think?

We don’t use online ordering our food does not “carry” well.  Think about this if you don’t have a way to connect your menu to computers and mobile devices, your competition will woo your customers. Consumers are time starved, and hooked on technology, make it easy.
Google or Facebook – as above, set up a Facebook page, it costs nothing. Have someone help if you need it and then monitor your page 5 minutes a day.  Don’t think about it get started today.

We don’t open for breakfast – you pay rent 24/7, find ways to increase the utilization of your “factory”. Considering catering or school lunch program, contract out your kitchen.  Don’t become the next Kodak of chain restaurants.

Different store brands / personalities under one large corporation and all expected to operate utilizing a uniform set of metrics.  Worked well in the 70’s, 80’s but you have the answer.  Let me know just how well that works out.

Visceral gimmickry does not replace high quality food and great service ever.  Who defines quality service? You via your brand promise or the consumer?

We don’t measure ingredients; my employees know how much to use – why have menu prices, let customer pay whatever they want. If you don’t care what your product costs, you CAN’T make money.
We can’t raise our menu prices – tell that to the gas station owner on the corner, or the farmer growing your food. Costs are up, you must raise your menu prices or you will not exist.

Kodak management, smart and hard working as they were, did not see the world changing, fortunately you do. Realize that change is good and necessary. Act now to challenge your assumption, create new revenue streams and increase profits.  Success does leave clues, Disney movies leave you with a smile, being dead and correct is not a great strategy.

For international corporate presentations, educational forums, or keynotes contact: Steve@FoodserviceSolutions.us  the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. Visit: www.FoodserviceSolutions.us for more information

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