The Chaser: Restaurant News

The Chaser Restaurant and Bar Weekly News
// By Jordan Brydges // , Nov 8, 2019

Topics: Restaurant Management

50% sales growth, new beer styles, third-party delivery apps ruin profit margins and more. 


Restaurant Sales Expected to Grow 50% 

Big things happened this week, how much were you able to catch up on?  Either way, we've highlighted the main..

Source: FSR Magazine 


Restaurant industry sales are expected to reach $1.2 trillion by 2030 almost doubling their current sales of $833 million.  The definition of "restaurant" will also change and will incorporate the off-premise idea to include more delivery, virtual restaurants, subscription services, and grab-and-go retail locations. 


With advancing technology, guests will expect a seamless digital experience and their preferences to be known almost at every interaction point.  Ghost kitchens, or kitchens made for the sole purpose of creating meals made for takeout, will continue to grow as will delivery-only brands emerge.  Consumers may also grow loyal to third-party delivery apps which can impact loyalty to some restaurants if they are only featured on some platforms. 


Another change we will see is in the age of the labor force as it continues to age.  In 2017, 5.9 million teens were in the workforce and 10 million seniors.  By 2030, the numbers expected are 5.1 million teens versus 16.1 million seniors, this is due to an expected population growth rate of 0.7%. 


Champagne Style Beers Should Be on Every Beer List  


Source: FSR Magazine 


Can't decide between beer and champagne? No worries, brut IPAS are making their way on the scene with a dry-like champagne feel while also being light and drinkable.  Who would've imagined those two went so well together.  


Not only are these champagne-like beers tasty with low sugar and calorie counts, they also pair well with a variety of dishes.  A head brewer down in Austin, Texas said that the super-dry, aromatic, and bubbly personality stands outs alongside its drinkability, low bitterness, brut champagne inspiration, and light floral hops.  These hops come from fruits like green grapes, melons, gooseberry, passion fruit, mango, and guava.  


These beers are great for consumers, especially IPA lovers and wine lovers, bridging the two together.  With the holidays coming up these brut IPAs could be great opportunity as their dry finish falls in line with the festive beverage.  And for people that are not die hard wine drinkers this is a good drink to gravitate towards and is a great alternative for people that are looking for something light and crisp but not quite looking for champagne or cava.  


94% of People Say Bad Reviews Make Them Avoid a Business Before They Try It 


Source: FSR Magazine 


How often do you check Google or Yelp for reviews before you go out to eat?  64% of people Google a business before they even step foot inside and 94% say a bad reviews makes them avoid the business before even trying it.  With Yelp, OpenTable and Google becoming more reliable for reviews, consumers are looking there now more than ever and becoming even pickier when they choose a dining option. 


Of course negative reviews stand out and typically when we have a bad experience we want everyone possible to hear about it but when we have a great experience we don't feel the same need to share it with the world.  So how can restaurant owners gather insightful feedback?


First, they can throw out the old long form survey method.  No one wants to fill those things out anyways.  They should start looking for ways to have a meaningful conversation and asking relevant questions based on what guests purchased and where (physical location or through third-party delivery).  This allows consumers to tell their story and not choose from selected answers provided on surveys! 


Not only is customer feedback important but feedback from your employees, after all they are the ones interacting with your customers.  Employees hold so much knowledge about the guest experience and know pretty much every detail of the dining experience and what makes it enjoyable.


Creating an effective listening strategy that incorporates the voices of the guests and also the employees is the best way to uncover issues and also get ahead of guests leaving negative reviews.    


Uber Eats and GrubHub Bite Into Restaurant Margins 


Source: Reuters 


Uber Eats and GrubHub think they are saving the day for providing restaurants with their delivery service, but do restaurants agree?  More and more recently this relationship is not seen as a two-way street but an unfair distribution of profits. 


Delivery platforms charge restaurants for having their menus listed on their sites and restaurants have to pay even higher fees if they want to be listed more prominently or use the services for delivery with orders placed on the platforms.  For small restaurants, this can hugely impact their margins.


Bareburger, an organic burger chain, hopes to get rid of the delivery platforms usage by 2020.  The Group Chief Executive, Euripides Pelekanos, said these platforms are a "necessary evil."  In 2017, they booked $20 million in revenue from orders placed through third-party platforms, but also spent $2.5-3 million in related fees.  In the restaurant industry that is basically the whole margin.  


Since there are multiple platforms in the third-party service, restaurants with 25-50 locations have found more leverage when negotiating terms.  But what does this mean for small restaurants and the continued popularity of off-premise dining?  Do they really have a choice and how can they still cater to off-premise dining without killing their margins?


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Jordan Brydges

About the author, Jordan Brydges

Jordan is a marketing intern at Backbar and a business student studying marketing. She has been working in the restaurant industry for 8 years and developed a passion for cooking and a love of red wine.

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