Is the restaurant industry rebounding?

Some industry-watchers think so.  The NRA recently released results of a monthly survey that showed promising upticks in restaurant operator confidence and consumer spending planning.  Optimists cite this as evidence that the economy as a whole may soon be pulling out of the recession, given that many people first cut spending at restaurants in tough times—and increase that spending in better times. 

On the other hand, current restaurant business statistics remains at levels indicating industry contraction (albeit a slowed contraction).  You can read more about it at Nation’s Restaurant News.

I’m sure we’d all like to believe that the restaurant industry’s situation is improving, but what have you seen firsthand?  Are sales up?  Flat?  Many argue that the recession will produce a “new breed of consumer,” a value-conscious buyer with tight purse strings.  What do you think?  Post your thoughts below!

Today, a quick roundup of some extreme restaurant marketing in the news lately:

1)    An upscale NY eatery is giving away meals to promote its new menu choices.  (As we noted in a blog post last week, reworking your restaurant’s menu can be a margin-boosting decision.)

2)    T.G.I. Friday’s is offering a “buy one, get one free” deal.

3)    For the savvy eater, some UK restaurants offer coupons online.

4)    Even Starbucks is adding “value meals” to their menu.  (Ok, maybe that’s been done before and doesn’t really qualify as “extreme,” but Starbucks?  Really?)

5)    So-called “occasional” restaurants are popping up.  Many make regular changes to their décor or implement other near-theatrical gestures that they claim draw diners for the “adventure.”

Add your own ideas for "extreme" restaurant marketing in the comments section below!

    Most businesses review expenses on a regular basis.  Serv-U reviews expenses annually, quarterly and monthly.  One of the reoccurring topics at our annual meeting is evaluating the cost and benefits of outsourcing services.  Most small to medium businesses tend to remove as many outside services as possible and manage them within the organization.  Here are a few outside services that may be cost effective to bring in-house for a foodservice operation.

      Cleaning your own establishment may be cost effective and requires little training or up front cost.  If you have extensive cleaning requirements that you are outsourcing, you may be able to reduce the level of service from your janitorial service company and bring easier tasks in house.  General cleaning, such as floors, surfaces and bathrooms require minimal training, labor and equipment costs.  Mopping equipment is a little over $100 for mops, a bucket, chemicals, and signage. The initial cost of a commercial vacuum is between $200 - $300.  Bathroom supplies, pails, towels and chemicals are all inexpensive.  If more extensive services are to be outsourced, floor buffers, traffic mats, anti-fatigue mats, and kitchen apparel can all be cleaned in house.  Bringing janitorial services in-house was on Serv-U’s list two years ago when we purchased a 65,000 square foot distribution center.  We now do all of our janitorial services in-house resulting in increased quality of cleaning, reduced costs by over $2,000 per year, and reduced building access and security risks.

      In recent years, over 50% of our local market has used knife sharpening services despite the high costs and low quality knives.  Many of those establishments use the services because they need sharp knives, but don’t have the time to sharpen the knives on a regular basis.  I have many customers switching back to in-house knife sharpening to reduce expenses.  Most respond with positive results, specifically discussing how easy it actually is with better knife sharpening technology and the benefits of having better quality knives.  The knife sharpener costs range from $200 - $400.  Knife prices have a large range of costs depending on steel quality and grips.  Please review the link below from Edlund for an actual case study.  The EDLZ-0401 was used in the study and features an accurate knife guidance system for easier usage.

      Beer line cleaning is a must to ensure food safety and beer quality.  Beer line cleaning pumps cost $350 - $450 depending on the length of beer lines.  Beer line cleaner is less than $10 per bottle.  Pumps transfer beer line clear in and out of the lines and come complete with quick disconnect hoses.  Most bars can clean their lines in about an hour and save on cleaning services.

    Finding ways to reduce outside services not only reduces cots, but allows you control of the quality of services being performed.  Many of these services can be replaced with low equipment costs, minimal training and low cost labor requirements.  If you have any tips or if you have tried any of the above ideas successfully, email your stories to us at servusales@servu-online.com and we will add them to this blog.  Thank you for your patronage.

Sincerely,

Chad Hemming

Vice President of Marketing


Additional Links:

Edlund: Knife Sharpeners vs Knife Sharpening Services

    Besides food waste, an issue that is top-of-mind for many restaurateurs is their labor expense.  Warewashing is one area where many foodservice operators can reduce labor costs with fairly minimal investment.  Adding a glass washer to your bar sink saves labor in several ways.  First, the glasses don’t need to be racked and moved to a dishwasher; eliminating this step also reduces breakage.  Then there’s the benefit of cleaner glasses and fewer returned drinks with dried-on lipstick or food pulp.  That’s because the bar sink glass washer’s brushes scrub off food and lipstick residue more effectively than undercounter glass washers—and at a fraction of the cost of a large warewasher.  Besides saving on labor, glass washers are easy to install, fitting into most bar sinks and requiring no special plumbing or electrical hook-ups.

    In some cases, of course, you need to use a larger upright or undercounter warewasher.  In those instances, you can realize savings simply by upgrading your glass racks.  Carlisle’s Opticlean Newave TM glass racks have all the durability of standard glass racks, but they hold 20% more glassware.  That means fewer loads are necessary, and that saves you money on the labor, detergent, and water/electrical costs of running the dish washer.  The curved design of the Newave TM glass racks also holds the most popular sizes more securely than standard racks, reducing breakage.  To find out if a Newave TM glass rack will fit your glassware, give your Serv-U sales associate a call at 1-800-797-3788.  For standard glass racks, just locate your glassware here on www.servu-online.com by using the search function in the top left corner of the screen.  The matching glass rack will be listed as an accessory at the bottom of your glassware’s product page.  Getting the best glass rack for your drinkware is important to reducing mechanical shock and breakage, so don’t hesitate to call with questions.

    For a relatively small investment in a quality food prep machine, your kitchen can prep food at 3 to 5 times the rate of hand cutting fruits, vegetables, cheeses, and meats.  You’re also assured consistent, professional-looking cuts every time without all the wear and tear on your hands.  While automatic machines are available, manual food prep machines work very well at a fraction of the cost.  Many machines even perform multiple tasks.  A great example of this is the King Kutter TM (REDK-6003 and REDK-6004); for just $113, you get a manual food prep machine that can shred, string, julienne, grate, slice, and chop fruits, vegetables, and cheeses.  And there’s a machine for just about any task.  A quality wedger can be had for under $200, and can be used to wedge potatoes, lemons, limes, oranges, apples, and more.  There are some automatic food prep machines that require a larger up-front investment, but carry significant advantages, such as a potato/vegetable peeler (the UVXK-1000, $1340).  It has a 20-lb capacity, and peels vegetables faster than by hand and with little waste, great for high-volume peeling.  Similarly, for some applications, only a high quality food processor will do.  Though they run between $900-$1500, plus blades, food processors work extremely quickly and effectively on all manner of food product.

    Most diners never see the back-of-the house, but that’s where you can make strategic investments to achieve more consistent plates and better labor efficiency.  Investments in glass washers, glass racks, and food prep machines can all bolster your restaurant’s bottom line.  For more information about the benefits of these items, see our additional links below.

Additional Links:

Bar Maid: Why Glass Washers?

(Also be sure to read Part 1 in our "Improve Your Bottom Line" series: Reduce Waste.)

    Reducing your use of paper and plastic disposables is not only environmentally friendly, but cost effective.  I have three suggestions to reduce your weekly purchase of disposable products.  Replace paper towels with hand dryers, replace paper or plastic disposable cups with reusable plastic cups and replace paper baskets with plastic baskets. 

    Replacing paper towels with hand dryers is cost effective, sanitary, and environmentally friendly.  Hand dryers’ initial cost is relatively low at $160 - $300, and they recoup their cost in less than a year.  Most hand dryers are available in either 115V or 208/230V so they are easy to install.  Touchless hand dryers are more sanitary than paper towels and can be used in both the bathrooms and at hand washing stations.  In the “Additional Links” section below is a report on the benefits of hand dryers, including environmental and economic impacts.

    Many restaurants rely heavily on disposable products because of convenience.  Disposables can be a life saver during peak times, but they are very expensive compared to reusable products. Replacing disposable plastic cups and trays with reusable plastics has a relatively low up-front cost and requires little additional labor expense.

Restaurants that use plastic, paper, or foam cups can replace those expensive products with reusable plastics.  Quality disposable cups can cost in excess of $50 per case compared to about $10- $20 per dozen for reusable plastic drinkware.  Since most plastic drinkware is dishwasher safe, the additional labor expense is minimal.  Customers will appreciate the increase in quality and improved environmental impact.

    Replace your paper food baskets with polypropylene baskets and add profit back to your bottom line.  Quality microwave-, heat lamp-, and dishwasher-safe baskets cost about $10 per dozen.  You will still want to use a basket liner, but they are a fraction of the $30 per case paper basket price.  Customers also like the plastic basket’s more rigid structure over a flimsy paper basket.  Most baskets are available in several color options to improve the presentation of the food.

Finding ways to reduce one time use products and replacing them with reusable products not only saves you money, but improves the quality of the product, reduces storage space requirements, and improves the environment.  If you have any tips or if you have tried any of the above ideas successfully, email your stories to us at servusales@servu-online.com and we will add them to this blog.  Thank you for your patronage.

Sincerely,

Chad Hemming

Vice President of Marketing

Additional Links:

World Dryer: Hand Dryers vs Paper Towels 

(Also be sure to read Part 2 in our "Improve Your Bottom Line" series: Reduce Disposables.)

I have read many articles over the last year that ranked foodservice operators’ concerns and “increased food cost” is always in the top two.  I have put together four ways to extend the life of product or to reduce food waste.

1)     Shortening has become one of the top food costs for many restaurants.  If you are frying foods, you should be filtering your oil.  Most operators that are filtering oil extend the oil life by 30-50% with no noticeable quality loss.  Most chains have been filtering for years and have made filtration a requirement in battery frying.  Purchasing a new fryer with a built in filtration system is the most convenient and effective way to filter oil, but also the most expensive. 

    Here are some ideas to filter an existing fryer at a fraction of the cost.  For safety reasons, we recommend using either a hand operated or electric filter machine.  Filter pots are available for under $175 but require handling dangerously hot oil and waiting for it to cool.  Hand operated filter machines range from $640 -$770 and are great for a couple of fryers.  Electric units range from $1000 - $2000 and require less labor.  If you have a floor fryer, most likely a drain valve will be conveniently located in the front and require a one way pump.  Countertop fryers and a few floor fryers do not have drain valves and require a two way pump.  Most portable filter machines are also used to safely transport discarded oil.  Oil treatment costs less than $1 per 30-50 lbs. filtration.  Use a fryer boil-out to remove carbon to keep fryers running efficiently.  This is particularly important on tube fryers because the carbon buildup around the tube acts as an insulator and reduces the fryer’s performance while significantly increasing energy usage.

2)     Portion control can be the difference between a profitable restaurant and an unprofitable restaurant.  A mechanical receiving scale or digital receiving scale should be used to verify your inventory is correct and you are receiving what you have paid for.  High cost food items such as proteins should be measured with a portion control scale.  The chart from Edlund (see links below) shows that over the period of a month, over-serving a $10/lb protein by just 1/8^th of an ounce 30 times a day costs over $50.  If you are weighing as you go, such as weighing each ingredient on a pizza, you need a zero/tare option.  The cost of digital scales has come down over the last five years and such scales are now available for $40 -$200.  When purchasing a scale, think about whether or not you want a digital display, how you are measuring product, and how you plan on cleaning and calibrating your scales.  Other inexpensive portion control devices are serving dishers, batter dispensers and portion control condiment pumps.

3)     If your sales have been fluctuating, your food storage probably has too.  To extend the life of your product, make sure you have properly sized food storage container and food rotation policy.  Use smaller containers and keep them full.  This will allow less air in the container, free up refrigerated space, and require the food to be out of the refrigerator less often.  Make sure the lids are still making a complete seal.  Use a food rotation policy to ensure “first in, first out.”  To make this easier, use a food rotation label with date.  Rapi-Kools will reduce the cool down time on large batch items and extend the life of a product.  Use a thermometer to keep all of your refrigerated space at the optimal temperature.

4)     Behind the bar, liquor is the most expensive food product and should be portion controlled.  Use a measured pourer to get improved accuracy.  This improves drink consistency and profits.  If your bartender is off 1/8 of an ounce per pour (or a fraction of a second free pouring) they gave away 3 drinks per 750ml bottle. Many bars use a system of color coded measured pourers to keep track of the liquor prices.  Pourers with a cover keep flies out and reduce the need to dump bad bottles.  Lined shot glasses are also useful, and are available with 7/8 oz lines so you can “overpour” and still serve 1 oz.  The life and freshness of drink condiments can be extended with iced condiment dispensers.

            In these economic times most restaurants cannot afford to mistakenly give away profits.  If you have any tips or if you have tried any of the above ideas successfully, email your stories to us at servusales@servu-online.com and we will add them to this blog.  Thank you for your patronage.

Sincerely,

Chad Hemming

Vice President of Marketing

Additional Links:

Frymaster & Dean: Benefits of Oil Filtration

Edlund: The Importance of Portion Control

Precision Pours: Don't Risk Overpouring

If, like Anita Campbell of Small Business Trends, you’ve got a case of “bad economic news fatigue,” she’s got a treatment: optimism.  Specifically, she recommends checking out a biography of the fantastically successful entrepreneur and perpetual optimist, Andrew Carnegie.

To top off your new reading material, I’d like to offer a couple of reasons to be optimistic.  First, people have NOT stopped dining out.  Instead, consumers are looking for more value in their dining dollars.  An article at Forbes.com has several good suggestions for restaurateurs looking to keep their regulars while attracting new clientele.  My favorite idea: “Modest offerings--delivered in real time by a charming and professional wait staff (as opposed to a promotional coupon)--drive home the value.”  When dining out seems like an indulgence, it really needs to feel like a treat—and that doesn’t necessarily mean freebees or big discounts so much as good service and attention to detail.  Appropriately, the last suggestion of the article is to “keep your spirits up.”  (I think Ms. Campbell would approve.)

Second, besides getting great prices on all kinds of restaurant equipment and supplies everyday, joining Serv-U’s email list is FREE and can save your restaurant extra money.  Each email we send you includes special email-only deals.  And if you do make a purchase, you’ll get an extra $5.00 off your next purchase of $75.00 or more when you write a product review.  That lines up perfectly with Forbes’s tip #6: teaming up with vendors to cut costs.  Let Serv-U help you save on your next bar or restaurant supply purchase!

Controlling costs is vital to a restaurant’s survival, and it’s become more difficult with rapidly increasing food prices.  The Wall Street Journal reports that some restaurateurs are opting to buy food products without going through a food supplier and without the protection of a contract.  To some, it might seem too risky, but to others, this strategy can save a lot of money over contracts that are locked in to high prices.  What’s your strategy for keeping food costs in check?

A savvy restaurateur also knows that there are savings to be had in other areas of the business.  Investing in high quality restaurant equipment and restaurant supplies can save money in the long run, and you can count on Serv-U to stock your restaurant or bar with high quality brands at the best prices.  And don’t forget our commercial kitchen equipment extended warranties to protect you against costly repair bills. 

Bargain hunters will find a new discounted item featured daily on the Servu-Online.com homepage, and those who sign up for our free e-newsletter will periodically receive exclusive discounts via email.  So take some time to shop around here at Servu-Online.com, and don’t forget to request a copy of our most recent catalog, the 2008 Full-Line Fall Edition (now also available online in pdf form).  It’s chock-full of great deals on the restaurant equipment and supplies that you need to keep serving up great meals!