Regular readers of this blog know that back in 2018, the National Restaurant Association calculated the restaurant turnover rate to be 74.9% annually, compared to 48.9% in the private sector. Meanwhile, a report from CNBC puts the annual turnover rate at 130-150% for fast-casual restaurants alone.
There is no doubt that the tension between supply and demand for talent is most likely going to keep increasing, and the factors driving the trend including the ilk of all time low U.S. birthrates, low immigration, rising employee empowerment, aren’t likely to abate any time soon.
One thing is clear, that is both Gen Z and Millennials are dissatisfied with traditional employment options, pay, and working conditions. They are looking for new job opportunities at a rate never before seen. We must remind our readers that for the past two and a half years the world has been ‘unstable’, and as the pandemic travels, disruption follows. The hardest hit sector worldwide has been the restaurant industry.
Social media has played big role in brand messaging for six years if not more. Public restaurant companies told their employees they were number # 1 while at the same time telling Wall Street there was no way the ‘fight for $15’ would survive sent such a mixed message that employee’s distrust, distain, and disregard for restaurant owners and operators seeming disintegrated the desire for such jobs as a career according to Johnson.
In the world today branded messaging matters, so, the team at Foodservice Solutions® along with the Grocerant Guru®, once again retooled, reevaluated, calculated their original Price, Value, Service Equilibrium, and here is the new formula: Price + Quality + Social + Portability = Value.
In a Battle for Share of Stomach
You can Win
Jill Taylor, Burgerville CEO, stated “We are pleased to approve the nation’s first fast food union contract and look forward to working with all Burgerville employees to be the best restaurant company to work for in the Pacific Northwest,”
Just think about how powerful Jill’s statement was for all of the employees at Burgerville. How are you messaging to your employees? What is your employee turnover rate? In your customers minds-eye are you a ‘good place to work’? Is your customer service level, speed of service, better today than it was in 2019?
Remember that the line between restaurants and food retailers is growing ever thinner. The fight for America’s food dollars continues to intensify as consumers find fresh prepared Ready-2-Eat and Heat-N-Eat fresh prepared food options at a wide and growing array of outlets, across every retail channel: convenience stores, chain drug stores, furniture stores, restaurants, grocery stores, club stores, vending and even more non-food retailers like dollar stores.
The restaurant industry is not an industry known for trying to be first as in fastest to market with an ideation, food flavor or technology advance. In the United States the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurant’s goal is simple; feed one person, one meal at a time, in the restaurant while protecting and edifying the brands legacy. Does your brands messaging sound more like yesterday than today or tomorrow?
It is at the intersection of the consumer, fresh prepared food, and technology we find that consumers eating behavior is evolving and is now beyond the control of traditional food marketers. Evolving culture and lifestyle, demographics along with the new uncertain economy are all putting pressure on the American food consumer: Demands of work, economic shrinkage, demands of raising a family, commuting, social interaction, kid’s after-school activities, all contribute to a food marketplace where convenience vies with price over legacy brands.
Is there any wonder that the undercurrent of instability around the world is creating incremental instability in your work force? What is your cost for new customer acquisition? What is your cost if you lose customers due to high turnover, lack of training, slow customer service, or reduce hours of operations because you don’t have enough employees to cover shifts?
Recent advances in food packaging and new points of non-traditional food distribution have empowered consumer choice, and Americans are embracing these choices even as legacy restaurant marketer’s cringe. Who’s after restaurant food dollars simply put everyone.
The restaurant business in not brain surgery. You should care because they are selling it, and you are not! New non-traditional avenues of fresh prepared meals and meal component distribution are growing, gobbling market share while establishing new patterns of consumption, price points, and customer loyalty according to Johnson.
Trader Joe’s and Whole Foods have created Ready-2-Eat and Heat-N-Eat fresh prepared food items with qualitative differentiation as an entity with identity that has help propel them into Ready-2-Eat fresh prepared food leadership.
According to the team at Foodservice Solutions®, recent grocerant scorecards found both Trader Joe’s and Whole Foods are each known for high quality (restaurant quality) Ready-2-Eat and Heat-N-Eat foods with distinctive offerings elevating food discovery for both Gen Z and Millennials consumers.
More important both Trader Joe’s ad Whole Foods are leading with innovative products, and package size that create value, in the minds-eye of the consumer while positioning each chain as a food shopping destination for meal components that can be customized and personalized for immediate consumption, or mix and matched for personalized family meal at home. In short, they are stealing your customers.
According to Johnson, “Traditional views of meals and mealtime can pretty much be discarded”. Legacy retailers waiting for the “next big thing” to copy simply might be out of luck this time. Legacy food retailers may not like to be first movers very much but it may prove that waiting too long will not work this time.
Many legacy food retailers continue to practice brand protectionism, stifle the brand while diminishing consumer relevance. The consumer is dynamic not static. Brands must be dynamic, evolving with the consumer. Four years of watching other retail sectors thrive should be long enough. Success in the restaurant world is no longer simply about what happens within your 4 walls.
Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook, LinkedIn, or Twitter