There hasn’t been a lot of good news for the food service sector over recent years, so the latest Eating Out-Look, from Horizons and JRA, brings welcome cheer. According to the report, based on a survey of 300 hospitality operators, more than two-thirds of them saw revenues increase during 2014 compared to 2013. Around one quarter of respondents reported a ‘large increase’ in sales in last year.
Under that headline figure are several other promising indicators: operators say they are serving more meals, and seeing fewer customers trading down to lower priced items or using ‘meal deals’ or vouchers. 28% of businesses have recruited new staff and fewer have had to reduce their workforce or freeze wages.
All this is music to the ears of every operator who has toughed out the downturn, and confirms what we’ve seen within the many pub, restaurant, café and hotel businesses that we work with at Lynx Purchasing. With more money in their pockets, customers are revising the habits they’ve had for the past few years, choosing to dine out more often, not just on birthdays and anniversaries. And when they eat out, they want to indulge themselves, not quite ‘whatever it costs’ but certainly with less restraint than a few years ago.
Clearly, the economic recovery is still shaky in many parts of the country, but all of us within the hospitality sector can perhaps breathe a small sigh of relief that customers are, finally, coming back. In responding to this changing market, I think operators need to consider two things: firstly, if customers are loosening their purse strings and looking to treat themselves, then make sure your venue gives them a way of doing that easily and, secondly, don’t lose sight of cost control as sales increase, otherwise the additional spend won’t deliver a corresponding uplift in profit.
Encouraging diners to part with their cash requires a combination of tempting food and persuasive upselling, so you need to get your kitchen and front of house teams working together. Think about what dishes you can add to your menu that will appeal to your customers. How about the option of trading up to a more premium steak cut, a ‘bells & whistles’ burger option topped with a local cheese or a home-made relish, or a premium fish such as brill or gurnard? Side orders can also be tweaked with alternatives such as sweet potato fries or parsnip mash.
Also think about whether you’re catering for all your customers’ needs, in the light of the growing demand for ‘grazing’ foods. In a pub or a hotel bar, there are almost certainly drinking customers who aren’t planning to dine with you, but who could be persuaded to snack on something. Make sure your offer is more interesting than a bag of crisps and you could be looking at some serious incremental revenue. Deli boards and sharing platters can be assembled using products already in the kitchen, such as side dishes and buffet items.
Once you’ve added more premium options to your menu, make sure your waiting and bar staff know all about them and can identify opportunities to sell them. It helps if they’ve tried the dishes themselves, so organise a team tasting and training session so that they can give a personal recommendation to interested customers.
The other part of the equation for boosting your profits is cost control and it’s exactly at times like these, when trade starts to improve and you’re focusing on keeping up with demand and, quite possibly, expanding, that food purchasing disciplines can be overlooked. Checking that you’re getting the best prices from every supplier for every food item you buy is time-consuming and, in a busy pub or restaurant, not prioritised above the pressing need to put quality food on customers’ plates and ensure service levels remain high.
However, not keeping tabs on your costs is effectively giving away a percentage of the meals that you, your chef, and your front of house team have worked so hard to sell to your customers. At Lynx, we work with hospitality businesses to make sure they don’t have to do this. We negotiate prices on a range of products and services – not just food, we also cover drinks, kitchen supplies, tableware, even utilities – so that our customers don’t have to. So not only are we saving you money, we’re also saving you time – which is something few hospitality operators are going to have to spare as the market recovery continues.