Supply chain disruptions are a priority for restaurateurs, but the same issues that make restaurant operations so difficult these days, including staff shortages, rising prices, a volatile and unpredictable market and, yes, supply chain issues affect suppliers and distributors equally, according to Brian Warrener, an associate professor at Johnson & Wales University in Providence, RI, who specializes in teaching hospitality and food management and drinks.
He recently shared his observations during a presentation at the National Restaurant Show and added that while some of the challenges may be mitigated with the recession expected later this year, which is expected to include an easing in the labor market, the economic contraction is likely to be short-lived and systemic issues could linger for months or years to come.
There are no easy solutions to the problems, but Warrener suggested ways for restaurants to offset some of the difficulties, or at least find ways to pay for them.
Increase prices: Many of the operators Warrener spoke to who raised prices received little or no feedback from their customers, as long as the quality of food and service was maintained – an important caveat. However, he warned restaurateurs to do so with caution, noting that with the middle class squeezed as gas and food prices remain high, the majority would cut restaurant meals, trade to a less expensive restaurant, decreasing the amount they spend per meal, or a combination of the three.
Focus on the most profitable distribution methods: Warrener said 54% of all adults and 72% of Millennials say delivery — often the most expensive way to get food to customers — is an essential service to offer. However, customers in restaurants or at the drive-thru are perfectly happy to do some of the work themselves – indeed, they might prefer to order and pay via their phone rather than having to speak to a human. Enabling frictionless or low-friction interaction for these processes makes customers happier and frees up increasingly expensive labor to focus on other activities.
Reduce your menu and simplify preparations: Nationally, menus contain 13% fewer items than before the pandemic, and customers are okay with that, Warrener said. By focusing on fewer items and doing them well, restaurateurs can save on labor as well as the cost of goods. Cross-using ingredients and removing an extra topping or sauce also makes everyone’s life easier.
Warrener said switching to foods less affected by supply issues, such as local staples and ingredients, can also be an effective approach. He said the price difference between local niche products and domestic products might also decrease as shipping costs increase, so remember to compare prices.
Strengthen your supply chain: Warrener pointed out that chains like Wingstop are exploring the idea of operating their own chicken farms as a way to ensure a restaurant has what it needs, but if that’s not practical, don’t forget. not to keep in touch with your suppliers to know what is available and what is not, and also to buy several suppliers. “Remember that the supply chain is volatile, not necessarily the supply,” he said on one of his slides during the presentation.
Manage inventory more actively: The holy grail of just-in-time delivery, which reduces storage costs and guarantees freshness, may no longer be practical. Using takeout containers as an example, Warrener said if you run out of them on a busy weekend, you lose a huge chunk of your business. These days it’s best to stock up when prices are low or splurge extra whenever items are available.
Invest in technology: With good, or any hard-to-find, labor, digital controls, kiosks, and other labor-saving technologies are worth the investment.
Keep your menu flexible: If an item is not available, empower and train your staff to be able to offer something else. Since most menus are digital these days, changing them is easy anyway.
Contact Bret Thorn at [email protected]
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