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Industry Update
June 10, 2010 - What's Happening with Food Costs?
According to recent reports the wholesale cost of food rose by 5.7% for the 12 months that ended in April 2010, whereas inflation was only 2.2%. Restaurant menu prices rose only a paltry 0.9% over the same 12 months. If you have not been taking regular inventories and calculating an accurate food cost, you may want to start doing so. If you do not have the correct systems in place to do this, call us at (413) 774-2786 for assistance and support!
NOW may also be the time to hire us to provide your staff with sales and service training that can increase sales, profit margins, and staff tips!
July 1, 2010 NEW Massachusetts Food Allergy Warning
The New Massachusetts Food Allergy Warnings Regulations are rapildy taking shape. By October 1, 2010 all printed menus and menu boards in Massachusetts will have to include the following warning:
Before placing your order, please inform your server if anyone in your party has a food allergy.
This warning must be printed in the same type size as the smallest type size used for listing menu items. On printed menus it probably should be near the top of the first page of the menu. For walk-up or drive throughs it is permissible to have a separate notice provided it is visible from five feet away and mounted where it can not be obstructed. We would suggest that you train your staff to ask if anyone in a party has a food allergy prior to taking an order. AND more importantly, that you train your service and preparation staff in how to respond to guest's food allergies to keep the food served to those with allergies safe.
Also by October 1, 2010 you must post in a food preparation area a state approved poster that provides employees with information on common food allergens, health risks associated with food allergies, procedures to follow when a customer experiences an allergic reaction, and emergency procedures. Minimum poster size is 8.5 x 11 inches.
By February 1, 2011 all persons certified in Food Safety will have to take a state-mandated webinar on food allergies. At the completion of the webinar you will have to download a certificate of completion that will have to be posted next to your food safety training certificate. There will be a $10.00 fee for the program. The websites for this are not yet available, but will be posted here as soon as we have them.
It is estimated that more than 150 Americans die each year as a result of food allergies and thousands of others have to be rushed to an emergency room for medical treatment. It is much less expensive to train your staff to prevent a problem than to have to defend your business against a lawsuit brought by a guest of the family of a guest who has experienced an allergic reaction to food.
For more information call us.
June 10, 2010 - Avoiding Costly Employment Litigation
A recent article written by experts in the field of employment law stated that restaurants have some of the greatest risks of being sued for violation of employment law due to: high turnover, working hours, and the presence of alcohol. These experts recommended that every restaurant do the following to minimize the risk of being sued for violation of employment and labor laws:
1. Have and DISTRIBUTE an UP-TO-DATE Employee Handbook!
If you don't have an up-to-date employee handbook, Wheelwright Consultants can supply you with a standard basic handbook and modify it to fit your business.
2. Obey ALL Wage and Hour Laws!
3. Train Supervisors on Employment-Related Skills
Wheelwright Consultant provide training for managers and supervisors that covers the essential skills of employee interviewing and hiring, orientation and training, discipline, and termination. These programs provide guidance that makes your operation more professional, consistent, and less likely to be sued.
4. Provide Anti-Discrimination and Anti-Harassment (Sexual) Training
Wheelwright Consultants' founder, Eric F. Nusbaum, Ph.D., CHA, has completed an extensive anti-discrimination and anti-harassment training course given by the Massachusetts Commission Against Discrimination (MCAD) and is on the MCAD referral list for trainers. His anti-discrimination, anti-harassment programs meet state guidelines for curriculum in these key areas.
5. Be Proactive and Consistent in Your Employment Practices
November 11, 2009 Tips Can Double Server's Tips?!
In mid-August a friend's daughter moved back to New England and took a job as a waitress at one of the chain casual theme restaurants. In addition to reading and studying the restaurant's training manual and completing their training program, the young woman asked for some explanations about different beverages that she was unfamiliar with. After explaining some different beverage offerings I asked if she wanted some sales tips and tips on increasing her tips. She did. We had a session on suggestive selling, body language, and tip enhancement.
I saw this young woman recently and she related that she is ranked as the #1 upseller of beverages and the #2 seller of desserts at the restaurant. Here's something else she reported: she has been using some of the tips on increasing tips and on Halloween night she had the same number of parties and about the same number of customers as all the other servers working. She, however, took home more than $100.00 in tips that night and her tips exceeded 25% of sales while none of the other servers took home more than $50.00 that night! Guests who tip 25% are VERY happy guests who are likely to come back. Just a couple of tips can increase your servers' tips, which we all know are a recognition of service and satisfaction.
If you're interested in helping your servers increase their tips, and probably increase their sales and the level of repeat business, call us to schedule a training session.
2010 Sales Expected to Drop Further!!
A recently published report forecasts that guests will continue to dine out about as often in 2010 as they have been dining out in 2009, but that they expect to trim their dining out expenditures by 20%! All the more reason to make sure that your staff is well trained and meeting or exceeding guest expectations. You will have to work harder to keep those guests who dine at your restaurant satisfied, spending money, and coming back. Wheelwright Consultants can help! Call us today!
October 8, 2009 Massachusetts' Local Meal Tax Regulations
If your local government took advantage of the opportunity to add a local option meals tax back when the Commonwealth raised the tax percentage, you must comply with state regulations. Specifically, you must:
* State the total tax separately from the sales price of food and beverages and any other applicable fees.
* You can combine the state and local sales taxes provided that the taxes are identified as "State and Local Tax".
* Alcoholic beverages sold for on-premise consumptions without a meal can have the taxes included in the price, but don't forget to collect them and file the appropriate returns!
July 15, 2009 Financial Update on Discounting
Today's Wall Street Journal reported financial and operational results from a number of chains that have deeply discounted their menus in an effort to bring in more customers. The results? DISMAL!
Not only have the deep discounts reduced revenues but they have failed to bring in enough additional customers to compensate for the lower prices. The results are depressed profits and revolts among franchisees against corporate discounted marketing programs. Comments posted along with the news article suggest that even customers may not be happy with the deep discounts because they are questioning the quality of the food being sold for such low prices.
Looking back a few years from now we may end up filing these deep discounts in the same "stupid idea" folder that holds the "NINA Loans" = No Income, No Assets Loans that have caused so much trouble for the banks and the economy - the same loans that initiated the financial crisis that led restaurant chain executives to deeply discount prices to lure in more customers!
What works? Doing What You do Best! We invite you to read our postings from May 27 and March 24! If you need help, call us we can provide staff training which increases sales and makes customers happier, make recommendations for improving operations to improve profitability, and can create e-marketing programs that raise customer awareness and bring them in more often!
May 27, 2009 How's Business?
Most segments of the hospitality industry are reporting that business is down, the exception to this being a few operators such as P.F. Chang's. As more and more operations close there will be opportunities for those that remain open to gain new business and perhaps to expand (McDonald's is looking to open many McCafes in Europe after Starbucks closed nearly 1,000 units there. . .). It is important to remember the basics!
* Maintain product quality and price.
* Maintain staffing levels so that the level of service is maintained.
* Maintain the cleanliness and physical condition of your business.
We strongly urge you to avoid the pressure to blindly follow your competitors. T.G.I. Friday's ran a $5.00 lunch promotion during May, probably to counter Subway's $5.00 Foot Long promotion. While the program was billed as a limited time offer designed to introduce people to their new lunch menu, it is possible that they have reduced the price point on their lunches. While Subway saw their $5.00 Foot Long promotion increase traffic, one has to question whether or not T.G.I. Friday's should have gone ahead with what seems to be a head-to-head challenge, afterall there are significant differences between the two operations that should differentiate them and all ow Friday's to sell more expensive lunches than Subway. Time will tell.
How Much Will YOU Let Your Employees Steal?
Recently we did a "Mystery Shop" at an establishment. Due to a misunderstanding in requirement we were at the establishment earlier than the client wanted. During our visit we noted a number of violations of state alcoholic beverage service regulations and health codes as well as violations of company policy - including the bartender giving away free drinks. We reported our finding to the owners who chose not to discipline the bartender, who was the same one who was on the rest of the evening, on the grounds that "all bartenders give away drinks" and "we wanted you to catch him stealing later in the evening when he didn't think we'd stop in."
It is our position that not all employees steal from their employer and that any level of theft is unacceptable. If an employee is stealing at any time it is because there is an opportunity to do so: there is a lack of control and accountability. It is reasonable to believe that if a person gets away with stealing at some time that they may get bolder and continue to steal or to escalate the amounts and frequency of their actions.
In order to keep your business strong and profitable it is important to have good internal controls and to take swift and appropriate actions when state and local laws are violated or when company policies are violated. We urge you to let your employees know that:
It is not permissible to "steal a little" or to "steal at some times, but not at other times."
You need to let you employees know that stealing or violating the law, particularly when it involves improper or illegal service of alcohol, is cause for disciplinary action up to and including termination. While you should not need to remind your employees of this every day or even every month, it is something that needs to be reinforced periodically and where it can be documented that an employee or employees have violated the law or company policies, examples need to be made, If you don't do this you are giving other employees a green light to steal and putting the business and the employment of the rest of the staff at risk.
April 7, 2009 What are you doing about the 'shake-out'?
Analyst John Glass, who follows the restaurant industry for Morgan Stanley, has predicted that the casual-theme restaurant segment of the market will have to shutter more than 1,200 units (6.6% of the total) before that segment of the industry stabilizes sales and profits.
Bob Goldin of Technomics is more pessimistic and states that the industry overall will have to close 20,000 locations in the next three years before we see growth again.
After adjustment for inflation restaurant sales in 2008 were 1.2% lower than in 2007 and they've dropped even further this year, with some experts predicting a 6% drop in sales!
If the tough get going when the going gets tough, now is the time to get it in gear. But how and what? You can start by attending the program listed below or calling us at (413) 774-2786 to see how we can help you keep staff energized and serving attentively. We can provide marketing and operational support and may be able to help you cut your energy bills. Now is the time to prevent your business from joining the ranks of the "was" and to prepare to survive and thrive.
March 24, 2009
NEW LEGAL REQUIREMENTS FOR MASSACHUSETTS RESTAURANTS
As of April 9, 2009, Massachusetts recognizes a woman's right to breastfeed in all places of public accommodation, including restaurants. Denial of this right, or harassment of breastfeeding women can result in legal action against the business including having to pay the the legal costs of the woman and compensatory damages. Please pass this information on to your staff.
Maintaining Service Levels in a Tight Economy
As revenues shrink many operators are inclined to reduce their service staff in an effort to save money. Often this is short-sighted as it results in reduced service levels, and those customers who are in your business end up as unhappy customers who tell a great number of people about how things are getting worse everywhere, even at your business which they mention by name.
In a down economy it is even more important to provide excellent service! Here are some things that you can do to maintain service quality:
1) Forecast your business volumes and staff accordingly. A few extra dollars of service staff payroll that leads to great service will pay great dividends.
2) Remind your staff how important good service is and whenever possible reward those who provide great service. The reward can be as simple and inexpensive as a simple "Well done and thank you" given in public.
3) Resist the temptation to do lots of different line employee tasks yourself. When you are doing these tasks you will not be doing many of the things that you should be doing that are necessary to manage and grow your business. Taking work and hours away from your staff will negatively impact staff morale. As a general rule, staff yourself in a line position only when there is no one more qualified available and only when doing so won't distract you from your own work!
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