Sunday, August 2, 2020

Chain Restaurants Achilles’ Heel the Past vs the Future

All retail brands have a lot in common. Sometimes we have to take a sept back to have a view of today or tomorrow according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. I have you noticed that Kodak went 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, today is a technology company that produces camera-related products, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook. However, they waited too long to evolve and are now just a fading shadow of once was a great company, this year the stock price hit a low of $1.50. That's 25 years of struggling and turmoil. Now they are evolving into a 'pharmaceutical' focused company with a loan for the U.S. government for $785 Million to do so.  Who is going to help you evolve? 

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: Chuckie Cheese,
Sweet Tomatoes & Souplantation, Logan's Roadhouse, and large Pizza Hut, Wendy’s and IHOP franchises groups.  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. Over the last ten years, anything sound familiar?

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we want to deliver.
• We don’t allow or brand to wander, we protect our brand, that’s brand protectionism and its dying brand.
• We don’t use online third party ordering, I-pad ordering or voice screen ordering.
• We only advertise on Google, Twitter or Facebook.
• We don’t do snacks, we do meals.
• 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 lower 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 three years ago. In the next three years the rate of change will continue to increase. You need to think about change or evolving your restaurant the way technology companies think about Moore’s Law.  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, the pandemic, and rising food cost for disappointing results, you have a problem. Do not forget there are many companies are out there capable of growing both the top and bottom line, number of units and garnering market share. Is your company one of them?  If not, it might be time for Outside Eyes. 
Millennials and Gen Z consumers are digital natives. They want what they what and in a digital first format.  So, if you are saying we always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk of, Twitter, YouTube, and TikTok on top of what you know what works. Here is the point, what you measure you manage. All advertising must have an objective that is clear and measurable to insure a proper marketing ROI and validating customer relevance.

We don’t use third-party delivery – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing more not less.  Deliver 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? Don’t let your brand or brand messaging look more like yesterday than tomorrow. 
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. So, can you sell you meals and meal components in a format that does carry well?  

When it comes to search don’t forget Amazon, and Google or Facebook. 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. Have you considered opening a branded virtual breakfast restaurant in your store?  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’re via your brand promise or the consumer?  Yes, the CONSUMER.  Today, consumers consider C-store fresh food restaurant quality, with 24% reporting its ‘better than restaurant quality’.
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, expand dayparts, renew menu choice 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.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Johnson, or

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