Restaurant Industry 2019 Planning Guide - Prepared by - TDn2K
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Restaurant Industry 2019 Planning Guide Prepared by
Transforming Data into Knowledge
Black Box
INTELLIGENCE
Financial Capital Performance
30,000 units | $70 billion sales
People Report
Human Capital Performance
2.5 million employees | 165 brands
White Box
SOCIAL INTELLIGENCE
guest satisfaction Performance
55,000 units | 190+ brands
Table of Contents
Looking ahead: 2019 on our minds
4 Team TDn2K
Economic Overview
5 Joel Naroff | President | Naroff Economic Advisors
Political Landscape
6 Joe Kefauver | Managing Partner | Align Public Strategies
Growth and Capital Markets
7 Andy Barish | Managing Director Equity research | Jefferies
8 TDn2k insights & Knowledge
11 The Restaurant Industry Workforce
14 TDn2K Top 5: Key Planning Issues & Topics for 2019
19 Join us for the Global Best Practices Conference
20 More on Black Box Intelligence
21 More on People Report
22 More on White Box Social Intelligence
Questions about this whitepage? Contact Sarah Higgins at
sarah.higgins@tdn2k.com
The contents of this report are confidential and proprietary and
cannot be reproduced, distributed, or otherwise disseminated
to any third party without the prior written permission of
TDn2K©.
To be sure, benchmarks by themselves hide much of the
underlying performance differences. Some brands are
quite successful despite the lackluster marketplace. Others
continue to struggle as they search for short-term fixes that
often miss underlying strategic issues. Overall, about 52
percent of chains tracked by Black Box Intelligence are up in
sales this year, compared with 36 percent up for all of 2017.
It’s against this backdrop that we’re privileged to share
Looking ahead: 2019 on
our observations in this TDn2K Insights and 2019 Planning
Guide. There are many theories as to why restaurant sales
are sluggish. News articles, blogs and podcasts regularly
our minds. examine the issues. In our work with roughly 250 brands, we
continue to uncover trends that link human capital metrics
and social commentary with restaurant performance. There
It’s hard to believe that we’re already well past the midpoint are common characteristics that top performers share. The
of 2018. This is a time when we take stock of the year so far information contained here provides an overview of the key
and make any necessary recalibrations as we head into the factors we think are important when evaluating the current
final stages of third and fourth quarter. industry environment and planning for 2019.
2018 has proved to be a mixed bag for restaurant operators. On the following pages, we’ve asked key TDn2K experts and
The economy is generally rolling along. Tax reform and wage analysts to share their thoughts on the big issues facing the
gains put more money in wallets and consumer confidence industry next year. We have also included the latest findings
remains high. Brands are exploiting opportunities in new from research across our Black Box Intelligence, People
dayparts and off-premise sales. Plus, there’s plenty of low- Report, and White Box Social Intelligence platforms.
cost capital to drive investments and fuel new unit growth.
We hope you find this information helpful and look forward
Yet comparable sales growth as measured by Black Box to your continued partnership in the coming years.
Intelligence was a modest 0.3 percent for the first half of
2018. Traffic counts continue to erode. At the industry level,
revenue is up only because of our ability to raise average
checks and virtually every executive we speak with points
The Team at TDn2K
to the incredibly tight labor market that hits financials
directly (recruiting, training and wage costs) and indirectly
(inconsistent service execution).
4
Consumers are also becoming tapped out. Debt service
costs are rising sharply and the savings rate is moderating.
With the unemployment rate so low, the ability of companies
to continue hiring as solidly is in question. A likely job
slowdown would reduce total income growth. All these
factors point to more subdued consumption.
Economic Outlook
The economy is generally in very good shape. With an
7.0
6.5
Consumer Debt Service Payments as a Percent of Disposable Personal Income (left)
Personal Saving Rate (right)
15.0
12.5
expansion in the 2.25 percent range and massive tax cuts 6.0 10.0
Percent
for households and businesses plus huge government
5.5 7.5
spending increases, anything short of robust growth would
be disappointing. The question, though, is not so much 5.0 5.0
about the remainder of 2018, but what might happen in 2019 4.5
Recessions
1985 1990 1995 2000 2005 2010 2015 2.5
and 2020. A slowdown is possible - a warning to businesses Sources: BEA, Board of Governors
making plans for the future. Business capital spending growth is also uncertain. The
The economy expanded at a 4.1 percent pace in the second second quarter investment rise was solid but well below the
quarter, the fastest since the five percent increases in the 2005 to 2007 and 2010 to 2012 periods. Instead, businesses
second and third quarters of 2014. The strength was wide have spent much of the tax benefits on stock buybacks,
spread. Consumers bought everything, especially big-ticket increased dividends and mergers and acquisitions. It is too
items such as vehicles. Business investment was strong as early to determine if capital spending will accelerate, but
new structures were built. Farm exports soared and the given the sluggish increase in private, non-aircraft capital
federal government got back into the spending business. goods orders, the likelihood of robust business investment is
not good.
With tax cuts starting to filter into purchasing decisions,
household and business capital spending should remain There are two other question marks. The Office of
solid for the rest of the year. Even if the second quarter Management and Budget’s latest report indicates the federal
growth pace turns out to be the high water mark, we should budget deficit will surge above one trillion dollars in the next
still see GDP numbers in excess of three percent for the fiscal year. How that will play with the fiscal conservatives
second half of 2018. who imposed spending discipline on the government during
most of this decade is unclear, but a government spending
But what about next year? Already, there are indications that slowdown should not be ruled out.
growth could start slowing as we move through 2019.
Finally, the trade uncertainties are already slowing world
The biggest concern is consumer spending. While incomes growth, putting exports at risk and causing inflation to
have increased moderately, it came from strong job gains accelerate. Where we go from here is unclear but the trade
and tax cuts, not pay increases. Accelerating inflation has policies are creating issues.
offset wage hikes. Earnings growth, when adjusted for price
increases, has turned negative. Household purchasing power In summary, growth should be strong for the next six to
is flat, and that should restrain future spending. twelve months. But beginning in the second half of 2019 and
especially in 2020, a deceleration in growth, hiring, income
Americans’ Paychecks are bigger than 40 years ago, gains and consumer spending are likely. Businesses should
but their purchasing power has hardly budged approach 2019 with cautious optimism, considering the
Average hourly wages in the US, seasonally adjusted
$25 Contstant 2018 dollars possibility that consumer demand will tail off as we move
$22.65 through the year.
20 $20.27
15
10
5 Current dollars
0 $2.27
Recessions Joel L. Naroff
1964 1974 1984 1994 2004 2014 2018 Naroff Economic Advisors
Data for wages of production and non-spervisory employees on private non-parm payrolls. naroffeconomics.com
“Constant 2018 dollars” describes wages adjusted for inflation. “Current dollars” describes
wages reported in the value of the currency when received. “Purchasing power” refers to 215.497.9050
the amount of goods or services that can be bought per unit of currency.
Source: U.S. Bureau of Labor Statistics.
PEW RESEARCH CENTER
5
Political Landscape • “Wage Theft” - State agencies and attorneys
general are increasingly taking a punitive approach
toward violations. Seemingly small compliance errors are
PUBLIC POLICY Overview increasingly snowballing into large financial awards.
A combination of existing and emerging issues will
continue to escalate pressure on bottom lines. Additionally, Gas Prices
those pressures could be exacerbated by a potential With increasing volatility in the oil markets in part due to the
“blue wave” in November’s elections which could propel significant shifts in our foreign policy priorities, gas prices
literally hundreds of extremely progressive candidates into seem poised to continue rising, shifting more available
elected office at all levels of government, particularly state disposable income toward perceived necessities like fuel for
legislatures. Issues that could significantly impact P&Ls the family car and away from other perceived luxuries like
include: eating out.
Employment and Labor Taxation
• Paid Leave - The issue has become increasingly States are beginning to experience revenue shortfalls
bipartisan in the last two years. The combination of the in part because of a loss of income tax from new “gig”
possible election of record numbers of women to office economy jobs, many of which are “off the books.” Look for
coupled with the increasing reluctance of Republicans to many states and localities to more aggressively pursue new
oppose paid leave, is likely to result in many more states revenue through either soda taxes, meals taxes and gross
adopting paid sick and family leave laws in 2019. Should receipts taxes.
that occur, while the cost for such programs may be
paid for by employees through additional payroll taxes, Summary
the compliance burden on businesses will continue to The industry was already on the reputational defensive on
increase especially with the patchwork of differing laws. most P&L-related issues, namely the national narratives
Additionally, in an effort to attract and retain employees, around minimum wage and paid leave. With the likely
many companies are now offering their own plans, election of hundreds of new progressives around the
increasing competitive pressure on those without leave country, most notably progressive women, many state
policies. legislative chambers that had Republican majorities of 10
seats or fewer will flip to Democratic control - meaning
• Wages - Many states are poised to pursue equal new progressives will control the agenda in 5-10 additional
pay and other compensation-focused legislation to states. Much of that agenda will reflect the themes of their
address gender pay gaps. Additionally, many states and campaigns - pay equity, gender equality, paid leave and
localities are more aggressively enforcing wage and hour issues around sexual harassment. Accordingly, brands may
compliance standards both to address inequity as well experience significant financial and reputational impacts.
as increase revenues. An effort underway in California to
redefine wages for “off the clock” work such as clocking
out and then locking up could subject employers to
joe kefauver
Managing Partner | Align Public Strategies
additional costs and potential legal actions. joe.kefauver@alignpublicstrategies.com
407.425.0300
6
TDn2K Insights & knowledge:
The Industry View
Restaurant Comp Sales and Traffic: This is not to suggest that every brand and segment
Restaurant Industry Comp Sales Returning to experiences the marketplace in the same way. The best
Positive Growth performing segments in 2018 have been fast casual,
upscale casual and fine dining. Casual dining has benefitted
Guest check growth Comp traffic Comp sales from a resurgence in the “bar and grill” subsegment. Fine
4%
dining is the only segment with positive comp sales in each
2% of the last three years. Upscale casual has experienced
three years of positive or flat sales growth. Higher-ticket
0%
brands seem to have resonated with consumers seeking a
-2% more experience-based dining occasion.
-4% While it’s clear that some segments are reporting positive
-6% sales, all show continued decreases in guest traffic.
-8% Comp Sales by Industry Segment:
Most Segments Reporting Positive Comp Sales
7-15
11-15
9-15
1-16
3-16
5-16
7-16
9-16
11-16
1-17
3-17
5-17
7-17
9-17
11-17
1-18
3-18
5-18
7-18
Source: Black Box Intelligence in 2018 YTD*
Another source for cautious optimism is the increased
Following two years of same-store sales growth lower than number of brands with positive sales. Although not at levels
1.0 percent, restaurant sales hit a turnaround point in the that indicate true momentum, roughly 50 percent of all
third quarter of 2017 and are now trending higher. Same- brands across the industry are up in sales this year, vs. 36
store sales were up 0.3 percent through July and Q2 2018 percent up in 2017. The strength in upscale casual and fine
growth was the best quarter for chains in over two years. dining segments are evident. However, TDn2K research
It’s too soon to call this a recovery since guest traffic suggests that brand strength and execution are far more
has continued to slide since the last recession. Even powerful indicators of success than segment or geography.
at improved levels, year to date traffic was down -2.2
percent through the end of July. Those who follow Black
Box indices know this is not an isolated occurrence. For
context, there were about 11 percent fewer guests in Q2 of
2018 than there were in the same quarter of 2013.
7
Comp Sales by Region: This is an area where investments in technology and
Restaurants Still Struggling In Some Regions processes are showing big potential returns. According to
(2018 YTD*) TDn2K research, brands that consistently outperform their
Reasons for the industry’s sluggishness are varied. peers are seeing off-premise sales skyrocket. On average,
Market oversaturation, food away from home, new food top performing brands saw 5.5 percentage point higher
outlets (meal kits, food trucks, grocery) and growth of dine-in sales growth during the 12-month period ending May
independents are all cited as factors. According to the 2018 than the rest of the industry. During that same period,
National Association of Convenience Stores, the total best in class brands outperformed their peers by a wide 9.4
number of convenience store locations grew by 1.4 percent percentage point margin on to-go sales growth.
year over year in 2014, 0.9 percent in 2015 and 0.9 percent
in 2016.
Sales Market Share By Segment:
From 2014 to 2017 the total population of the United States Consumers Are Increasingly Spending More
increased by 2.2 percent. Over that same period, the on Limited Service Brands
number of chain restaurant locations grew by 5.5 percent.
In other words, restaurants grew at 2.5 times the pace of Total Sales Market Share by Industry Segment
population over the last three years.
Industry Segment 2017 2018 YTD* Change
Fast Casual 9.9% 10.4% +0.5%
Dine In vs. To-Go Comp Sales Growth: Quick Service 61.6% 61.7% +0.1%
Growth Opportunities In To-Go Sales
Fine Dining 1.0% 1.0% +0.0%
25% To-Go Sales Upscale Casual 2.5% 2.5% +0.0%
20%
Dine In Sales Family Dining 4.4% 4.4% -0.1%
15%
10% Casual Dining 20.6% 20.2% -0.5%
5% *As of end of Q2 2018
0%
-5% Source: Black Box Intelligence Market Share Report
-10% Over the last three years, quick service and fast casual have
-15% consistently gained market share. This gain has primarily
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL
Source: Black Box Intelligence come at the expense of family and casual dining. The changes
For an industry struggling with sales, any source of additional are not seismic, but the trend certainly reflects the evolving
revenue is welcome. One of the most consistent trends over preferences in the marketplace. Consumers seek a balance of
the last ten years has been to-go sales outpacing dine-in sales value, quality, speed and service that is consistent with their
growth. While dine-in sales have trended up over last twelve expectations.
months, they’ve rarely been positive. Conversely, to-go sales
have accelerated at a faster pace and are now approaching
10 percent growth year over year. This means the industry’s
recent success in improving sales trends is all due to the
increase in off-premise results.
8
The Restaurant Industry Workforce
Restaurant Labor Costs as Percentage of Restaurant Turnover Trends
Sales: Rising Costs Driven By Restaurant
Managers LImited Service
25
Restaurant Management Restaurant Hourly increasing
management
132%
Hourly
50%
Management
24.4% 24.0% Turnover Turnover
20 23.4% Turnover Source: People Report
15 Turnover for restaurant employees and managers has
reached record high levels. With the labor market at full
10 employment there is little hope that the employee
9.4% 10.2%
8.8% retention woes will ease considerably in the next year. In
5
response to People Report surveys, restaurant operators
0 have continuously listed finding enough qualified
2015 2016 2017
Total payroll costs include: wages and salaries, bonuses, benefits, and taxes employees and retaining them as two of the top
Source: People Report
challenges they are facing today.
These results are not surprising for an industry that
As restaurants face profitability challenges after years of
employs a majority of millennial workers. According to
negative same-store sales growth, labor costs have
recent Gallup research, 55 percent of millenials stated
continued to rise. While moderate sales increases are
they are not engaged at work and an alarming 60 percent
encouraging, thin margins are being impacted by the
said they are open to new job opportunities.
increasing upward pressure on labor.
Though hourly turnover rates seem to have plateaued
In previous years, the restaurant hourly employee
after years of upward trends, restaurant management
population experienced rapid growth in its labor costs
turnover continues to rise. This suggests that the more
driven mainly by the rise in benefits costs due to the
skilled the employee, the tougher the competition to
Affordable Care Act and pressures on minimum wage.
attract them. Skilled managers are more vulnerable to
Since 2015, the rise in labor costs at the restaurant level
being recruited by other restaurant competitors as well as
has shifted and is primarily due to increases labor costs for
employers from other industries.
restaurant managers.
Among the main reasons listed for employees leaving
Overall, total labor costs including corporate office
their jobs, pursuing higher compensation has emerged as
positions represented approximately 40 percent of total
one of the top three most common reasons. For hourly
revenues in 2017. Total labor costs increased by 1.1
front of house employees, it is the number two reason. It
percent compared with the previous year according to
is the most common reason for termination in back of the
People Report’s Corporate Compensation and Benefits
house hourly employees.
Survey. Of total labor costs, wages, salaries and bonuses
account for 33.1% of revenues. Total benefits and taxes Restaurant managers are also leaving for more pay. Two
costs account for 6.8 percent of total company revenues. of their top three reasons for quitting involve getting
more money (including pursuing a promotion at another
company). As restaurant companies have to compete by
offering higher wages and salaries to attract employees
and fill their large number of vacancies, expect for labor
costs to continue to rise.
9
Cost of Turnover Investing In Employee Retention
Average
Average cost
Cost of turnover:
of Turnover Most
mostEffective
effective Retention strategies
retention Strategies
Compensation Better more
engagement
$2,000 $1,902 $14,036
Adjustments by managers
training
Source: People Report
per per per In addition to the significant costs sunk into turnover each
FOH hourly BOH hourly Manager
employee employee ---- year, there is the significant impact that turnover is having
on employee engagement, service levels, guest sentiment
Source: People Report and ultimately, restaurant sales and traffic. With turnover
at historically high rates for all segments, many brands are
The average cost associated with terminating a front of
making it a priority to implement strategies that focus on
the house employee in the restaurant industry is $2,000.
reducing turnover for hourly employees and restaurant
These costs include separation costs for the previous
managers. According to People Report’s 2018 Corporate
employee, replacement costs associated with recruiting
Compensation and Benefits Survey, a growing percentage
and the training costs for the new employee. Over half
of restaurant companies have started incorporating
of those costs go towards training. For back of the house
employee retention metrics intro the criteria they use when
hourly employees the average cost of replacing one
evaluating performance and paying bonuses to their General
employee is $1,902, with slightly over half of those costs
Managers.
going towards training.
There are many different approaches to increasing employee
As would be expected, turnover costs associated
retention and reducing turnover. According to People Report
with management employees are significantly higher.
member companies, the most effective retention strategies
According to People Report’s 2018 Recruiting and
they have implemented in the last year fit into one of three
Turnover Survey, replacing one restaurant manager (at any
categories: adjusting compensation for the target group
level of management), costs the company about $14,000.
(either hourly employees or restaurant managers), improving
In the case of managers, the portion of these costs that
restaurant manager engagement, and providing employees
goes towards training is higher at 64 percent.
with more training and development opportunities.
This last topic is especially important. Restaurant companies
focus significant resources on training employees. But some
of that investment needs to be destined to true personal
and professional development, beyond just training on day
to day skills. TDn2K research has shown that brands focused
on training their managers on supervisory and leadership
skills have management turnover rates that are almost 20
percentage points lower than those that don’t spend any
time on these topics.
10Key Topics for 2019
TDn2K Top Five
At TDn2K, we continuously study our own deep and broad industry database to mine the most
relevant industry, knowledge and insights available. We also solicit the research and opinions of
other trusted thought leaders and partners. This is a summary of the key topics we believe are critical
to include in your 2019 planning with the goal of helping you prioritize your investments in capital
and human resources.
Workforce | Tehnology & Information Insights | Customization | Growth | Uncertainity
11Workforce
Our industry is at an unprecedented crossroads in the battle Impact of gig economy – Employees have
to attract and retain talent at all levels. People Report currently always been attracted to restaurant jobs due to the
tracks 175 brands and over 2.5 million employees. Our most flexibility of scheduling often associated with “gig
recent reporting reflects that 73 percent of these brands have work.” In a way, the restaurant business provided
staffing scarcities of front of the house employees, and an the original gig economy jobs. In today’s landscape,
alarming 98 percent shortage in the back of the house. The it is common for restaurant employees to be given
daily difficulty of execution to deliver the brand promise is being their schedule with short notice, while the new gig
exacerbated by the number of new or untrained workers on jobs such as Uber, Lyft, TaskRabbit or even pet
each shift. These workforce issues extend all the way up to the walking allow for more freedom of scheduling.
corporate level, where we see a merry go round of key people Operators can mitigate this by looking for
leaving or changing jobs, resulting in shifting priorities based on opportunities to give employees more
new leadership. As operators focus on workforce strategy for predictability and control over their schedules.
2019, these are some of the key factors to consider: Moving forward, it is critical to leverage the talents
and skills of the best employees in ways that will
General manager engagement and keep them in the industry.
retention – TDn2K and Gallup research
continually identifies the general manager as the Demographic tsunami – Workforce dynamics
most critical role in terms of impacting are shifting, and these changes are systemic. The
performance. This is a keystone position, and a industry needs to adapt to an evolving workforce
focus on general manager engagement will have a that is showing a decrease of new entrants,
trickle-down effect on restaurant hourly workers as particularly in the 16-24 age category. Sustaining an
well as other management positions. Examining aging boomer population is essential for operators,
compensation and bonus practices, investing in as this group will be a necessity to fill in for the
personal development and well-being, increasing absent youth in the business.
management staffing levels and recognition and
reward practices all matter, and correlate to better Immigration deficit – A crisis has been building
for years in terms of cutting back on legal
performance.
immigration as well as a crackdown on illegal
Total rewards strategy – During the immigration. The industry was built on both,
recession, the restaurant industry enjoyed the whether we like it or not. As good citizens and legal
luxury of not feeling pressure on wages nor was it employers we are faced with a dwindling pool of
compelled to improve compensation or benefits qualified workers to staff our restaurants.
unless mandated by government. In today’s
competitive landscape, top performing brands who Human capital disclosure – SEC reporting
rules currently require companies to only disclose
are winning in the marketplace are those willing to
employee headcount, however a petition to require
be generous in their pay and benefits for their best
disclosure of human capital management policies,
employees. These brands tend to retain more
practices and performance was filed in 2017 by the
full-time employees, providing greater stability in
Human Capital Management Coalition. Regardless
terms of quality of operations, thus earning an
of how the SEC responds, this push for
advantage in sales and traffic.
transparency driven by shareholders highlights the
link between investing in human capital and better
performance.
12Technology & Information Insights Customization
Customer-facing technology - This Customers want what they want, when they want it and where
continues to evolve, and the industry must they want it. Why? Because they can. Winning operators will be
continually respect what customers want. able to deliver on those expectations. The rules have changed in
Beacon technology is emerging as a method of terms of engaging the customer, requiring more customization
engaging customers and delivering an optimized and personalization. Consumers are using restaurants in a
experience. This technology enables restaurants number of ways, whether it is to get a quality meal quickly
to send out marketing messages when delivered or picked up to-go or enjoyed as dine in experience.
customers are in the nearby vicinity, monitor Each has a different set of expectations beyond just a meal.
traffic levels and allowing diners the option to There are a few key components to keep in mind.
pay with their mobile device.
When: Time is the new currency – It is
Productivity – A technology focus is needed essential to meet time expectations of consumers.
in the productivity space. There is a fine balance A counter-service restaurant, for instance, must
depending on the type of operation between consider the time a customer spends in line, how
retaining human interaction versus being long it takes to fill an order and the speed and ease
understaffed, or inefficient with a strain on of payment. Time can be an inverse concern for full
profitability. Forward thinking companies will service concepts; consumers know they will spend
continue to research and develop new ways to more money in a full service brand, but the tradeoff
deploy technology that helps, and in some must be in creating an experience beyond just a
cases, replaces employees. meal that is worth the investment in time and
money. When it comes to the growing third-party
Too much data - Operators are faced with delivery services as well as the ease and time it
the daunting challenge of navigating the modern takes to place the order, the accuracy and how long
technology landscape, where it is essential to a customer is willing to wait is still evolving as
weave through massive amounts of data. alternatives expand penetration.
Compared to an era where the amount of data a
company housed was relatively small, How: Personalization – How can operators
organizations now must ask a multitude of customize offerings to craft more of an experience
questions surrounding where it comes from, for guests? Great service is key, as well as the
where it resides and how to leverage it for importance of personalizing products to meet
planning. guests wishes. The chain restaurant business was
built on mass customization, yet the consumer
The Chief Technology Officer joined the C-Suite in the early
wants it made their personal way. The challenge is
2000s, when everyone realized that technology was the
to give customers a sense that it is made for them,
enabler for the strategic plan. Today we see an emerging
but also to make money on efficient production.
trend of bringing in a Knowledge and Insights Officer to
the C-Suite. Data solutions have been developed for and Where: Delivery – Consumers recognize that
reside in the functions they serve - HR, Marketing and quality is not the same when ordering delivery
Finance. We hear time and time again there is too much compared to dine-in, but a minimum quality must
data. It has created a growing need for a person or group be met. The ability to turn your customer
that is responsible for gathering all data from multiple inputs experience over to a third party must be carefully
and organizing it for the most effective decision making. A thought through, which requires developing
single insight function that gathers and arranges all data in relationships between third party delivery services.
a simplified way for the creation of actionable strategy is the Don’t wait to work on your unique brand
future of leveraging data. distribution strategy. This is not a fad and will only
continue to impact many decisions including how
big to build new facilities if off premise is increased
to 20, 30 or 40+ percent?
13Growth
We note on every earnings statement that the first absolute necessary to drive the most important attribute
performance disclosure is on revenue growth. After that of intent to return.
statement the rest of the attention is on comparable sales
and traffic. Growth comes from adding traffic, increased
New restaurants - In gaining share, new
restaurants are important. With the continuing
pricing for improved comparable sales or opening new
flow of inexpensive capital and short-term
restaurants. Our industry is now a commodity business
investors’ appetite for new restaurant growth,
that translates into a market share battle for customers
it is important to your plan. Before executing a
and employees. There simply aren’t enough new
growth strategy, it is critical to develop an
customers or employees to provide 15-20 percent growth
understanding about who is stealing share
in the industry, much less every chain brand. The market
from your brand market by market. Not only
share battle is won one restaurant and one market at a
are brands susceptible to losing market share
time.
to look-alike chains or independent
Brand Positioning - Many chains struggle restaurants, but they are also competing with
to maintain a unique, defensible brand grocery and convenience store concepts that
positioning, which has led to a struggle to gain are not only offering dining options, but
market share. This requires incorporating the additionally are offering more compensation
consumer wants and needs described in the and benefit incentives to food service workers.
customization section. It also entails leveraging Furthermore, analysis should be conducted on
of technology to improve the guest experience the right markets as to the potential and
beyond what has been the status quo for the current competitive market performance. Are
brand. As part of a commodity industry, brands there employees as well as customers? Finally,
are relegated to differentiating on price or does your brand deserve to grow by
quality. The consumer defines which. To move producing acceptable targeted returns?
beyond price, it is necessary to think about
Ownership - should you franchise or build
how to differentiate a brand around a quality
corporately? What about acquisition or
aspect - sustainability, origin of food,
disposition? Each brand has their own chosen
community service, to name a few. Whatever is
path; the question will always be, “is it still the
being done needs to translate into growing
right path given the circumstances today?”
share market by market.
The right growth strategy contains a mix of three parts -
Basics - In our White Box Intelligence, the comp sales, traffic and new unit growth. To grow market
strongest correlations to intent to return by share, operators must choose the right mix for the brand
the Top Box performers is on service and and design pricing, marketing and a growth strategy that
ambiance. The brand promise cannot be fits. Operators need to know if their brand has a purpose
effectively delivered without enough and for all stakeholders and be confident that it is translated to
properly trained staff. The ambiance scores customers and employees alike.
many times are a direct reflection of dirty
tables and restaurants. Utilizing guest
feedback real time at the unit level up is
14Uncertainty
Our roles are to manage our businesses in periods of Need for stakeholder clarity - Time must be
uncertainty. In today’s world, the political, economic devoted to clarity of stakeholders. Operators should use
and legislative turmoil, coupled with changing consumer the screen of their stakeholder map to funnel the planning
dynamics makes this much more difficult. Our approach process to ensure clarity and common commitment to
has always been that we don’t predict the future as much balanced results or to a plan.
as we prepare for it. To that end, we believe successful
companies will develop a range of actions that can be Quality and timeliness of key performance
deployed depending on the circumstances. information - Companies must continue to refine and
simplify key performance information despite a flood
Contingencies must be built into planning - Is of data. Consider a knowledge and insight leader, for
it possible to carry out a five-year plan in this type of example, as the forward scout that must be courageous
uncertainty? Perhaps it is more attainable for operators enough to call what they see and stimulate debate about
to consider planning at the two- or three-year level. strategy.
Regardless of timeline, all planning must include built in
contingencies for downturn, economic breakthrough and
other external factors such as extreme weather tariffs and
taxes. Finally, we are now in the longest bull market in
history. The economy will soften, we just don’t know when
or how hard.
15JANUARY 27-29, 2019
HILTON GRANITE PARK
DALLAS, TEXAS
GLOBAL BEST
PRACTICES CONFERENCE
PEOPLE • PROFITS • PLANET GlobalBPC.net
CONFERENCE CHAIRS
CLAUDIA SCHAEFER MARIE PERRY
Chief Marketing Officer Former CFO
Jamba Juice Jamba Juice
16Black Box Intelligence™ is the leading
source of private and public company data
for the restaurant industry with metrics
Black Box
INTELLIGENCE
covering sales, traffic and more.
1
Surveying over 30,000 units & over 170 restaurant
brands representing $70 billion in sales revenue $70,000,000,000
2 3
Reporting on: quick
24 metrics Included: sales, traffic, food, sales
service, fast casual,
per labor hour, PPA, dine-in, to-go, catering,
family, casual, upscale
banquet, drive-thru, delivery, & by daypart casual, fine dining,
counter service, table
4 5 service & the industry
Benchmark by segment or cuisine
Secure Data 6 7
Exchange: Weekly to
SSAE 16 annual time
Certified period analysis
8
DMA & market
share products
9
Special access to other TDn2K™ Access to leading edge
& partner products incuding the Restaurant thought leadership:
Industry Snapshot™, featured regularly annual conferences
in Nation’s Restaurant News & quarterly webinars
17Unparalleled Human Capital Performance
Intelligence from the dishroom to the
board room.
People Report
Unit, Segment and Industry data covering 2.5 million employees available:
Monthly Quarterly Annually
FOH & BOH salaries Corporate Compensation
by position Compensation & turnover by
& Benefits Survey
unit, market, state & region
$ Regional salary & wage by
Thought leadership events
percentile, DMA or segment
Headcount, staffing
efficiency & staffing rates
Hire, promotion Turnover &
& turnover rates Recruitment Survey
State of the industry & Throughout the year
trending issue webinars
Top line executive summary
Gender, age, ethnicity
Executive scorecard
& transactional analysis
Hot topic quick polls & surveys
Restaurant Industry Training
Snapshot™ Workforce Index
Red Lobster has been a proud participant in People Report since the very beginning. People Report workforce
benchmarks and insights provide us with extremely valuable perspective and the competition among peer companies
fuels a desire to continually improve. In addition, TDn2K conferences offer terrific networking and learning opportunities.
TOM GATHERS | SVP & CPO | Red Lobster
18White Box Social Intelligence™ is the first social media listening
service made exclusively for restaurants, track your brand’s online
sentiment utilizing key attributes such as food, service, value,
intent to return etc. WBSI is tracking over 550 brands to
benchmark customer satisfaction and is the only online tool that
White Box
SOCIAL INTELLIGENCE
integrates with operational performance data to validate the
impact on financial performance.
Scorecard
reports for
Integrates social, review sites &
your brand
traditional guest satisfaction surveys & competitors Benchmark against specific social
data for top five competitors,
segment & industry
Track key business
Reporting on six segments: quick service, fast casual, family,
casual, upscale casual & fine dining
initiatives like
menu roll outs
Brand Quarterly social ROI reports & promotions
specific combining White Box Social
Intelligence™, Black Box
custom Intelligence™ & People
Customizable
alerts for brand
reports Report™ data reputation issues
From a marketing and HR perspective, White [The White Box ] team will be with you
Box really helps with talking to operations. every step of the way for the training and
White Box data shows them our guest’s real editing of the platform. The platform itself
They were blown time feedback and where the issues are. It isn’t has been great at catching information we
away. We are all just just me saying we need to fix things, etc. this is could not see previously through social
really impressed with what the customers are saying. We can now pin media, and they were able to quickly
your product. Our point and identify what is affecting our traffic integrate our personalized surveys into
agency had ways to and sales by using real time customer feedback their system. We will continue to enjoy
monitor, but it was and follow up and react quickly to the key areas working with their entire team and
nothing like this. that affect our business. learning from each other in the future!
STUART MYERS DONLYN KWEDAR KATHERINE HANSON
vp OF mARKETING | mAZZIO’S hr/Marketing Director | Big River Restaurant Group Marketing Coordinator | Nando's
19You can also read
