Monthly Archives: August 2012
When prices move significantly on food, it usually worries restaurant owners. There are times when prices going down OR up can offer you a good opportunity to earn extra revenue though.
Currently, Maine lobster prices are tanking. There has been a glut of Maine lobsters caught this year and prices for lobsters on the East coast have hit a record low. While a restaurant owner might normally think “prices are down, that’s great for me“, it can be a double edged sword. You do not want prices on your already low priced products going down, especially if those products make up a large portion of your sales. While initially you may earn more money from lower recipe costs from those items, eventually your customer is going to want some of those savings passed on to them. When you do decide to drop your prices or offer featured items with these low priced ingredients, what you might experience is a skewing of your product mix to those lower priced items. This can actually canabalize sales of other items that may have a higher food cost percentage, but also likely contribute more gross profit dollars to your bottom line. That means less money in the bank.
Low lobster prices are a different story. When typically high priced food items drop in price, they allow you to lower your prices and skew your sales mix toward those items. Even though those items cost less than they normally do, the lobster is probably still going to be higher priced than your average sale and contribute more gross profit dollars than your average item sold. This represents a huge opportunity to improve both sales and profitability. By offering a lower price on lobster, your guests perceive that they are getting an incredible value so more of them order the lobster. Your average ticket goes up and so does your average gross profit per item sold. Win for you and a win for your customer.
O’Dell Restaurant Consulting offers operations and marketing consulting for independent restaurants. Visit www.bodellconsulting.com for more information.
I recieved some feedback via Twitter from Robert Irvine of Restaurant Impossible about my recent article Restaurant Impossible at Poco’s in Kansas City.
I posted some pics of the outside of Poco’s in Kansas City while the Restaurant Impossible crew was there giving the restaurant the “Robert Irvine treatment”. In the article, I commented that I didn’t see the “frenzy” of activity I always see on the show and I asked some questions that I’ve been curious about since shows like Restaurant Makeover, Gordon Ramsay’s Kitchen Nightmares and Restaurant Impossible have been helping struggling restaurant owners fix their menus, their decor, and even their attitudes.
My questions include inquiries about what happens after the Restaurant Impossible crew is gone. Is there support after the makeover? You can read those specific questions in my article here.
I tweeted a link of my article to Robert Irvine and apparently he read it because he tweeted back to directly answer my most pressing questions. Here is our Twitter conversation, and make sure you are reading my own tweets back to keep everything in context. Also, I believe in full disclosure. I am a fan of the show, though it does not reflect the type of work I do with restaurants, and I appreciate Robert’s willingness to engage his fans.
I took a drive by Poco’s on the Boulevard today to snap some pictures of Robert Irvine’s Restaurant Impossible crew in action. Poco’s is a Latin restaurant that is near Kansas City, Missouri’s hispanic neighborhoods, and competes with a lot of great Mexican restaurants located just down the street.
When I drove up to Poco’s I expected to see a beehive of activity. Based on the show, the two day makeover is a mad dash to get finished, with Chef Robert yelling that they’ll “never get done on time”. That’s not at all what I saw though. What I witnessed was what appeared to be an organized and calm effort, with most the people helping either sitting or standing around. No running or hurrying and no stress. At least not outside the restaurant. Behind the restaurant, I saw servers in Poco’s uniforms sitting and talking. From across the street, I couldn’t tell what they were doing, whether it was training or helping with the remodel or something else.
As a restaurant and food service consultant, I’ve always wondered what happens when the Restaurant Impossible or Ramsay’s Kitchen Nightmares crew leaves. The restaurant has a new look, the menu is smaller, fresher, and likely higher priced, there is a boost in business due to the publicity and the owners have a new energy to “make it work this time”. My real concern for these restaurants is what happens next. Are the owners left with their same bad habits, only to revert to what is easiest? Do they continue to cling to the old crowd of customers that wasn’t enough to keep them in business, and alienate all the new potential customers by reverting to old habits and menus? Do they have new organizational systems in place or someone teaching them what information to record and how to organize their restaurant’s data to make sure they can be successful in the long run? Is there support after the reboot?
I don’t have the answers to any of those questions, but I do know one thing. More restaurants fail as a result of bad management practices than bad food. That doesn’t mean you can plan on being successful with bad food. The food is obviously very important. It just means that having good food isn’t enough. You have to have management systems in place and a process for tracking and saving important information about your restaurant, to allow you to make better, more informed decisions. You also need to have someone to talk to that knows what successful restaurants are doing that you aren’t, outside of the food.
These restaurants that receive free makeovers from the likes of Robert Irvine, Gordon Ramsay, or the Restaurant Makeover show are getting an incredible gift. The type of remodels and assistance they are getting is worth many, many times the $10,000 budget these shows stick to. The publicity they are getting is absolutely priceless. I don’t expect to be able to get into Poco’s for the next month. Especially in a food crazy town like Kansas City. I just hope the makeover shows are doing something to provide these restaurants with some support after the makeover. THAT is where the battle will truly be won or lost.
Update 8/10/12 – Robert Irvine answered some of the questions raised in this article via Twitter. See his replies here.
Brandon O’Dell and O’Dell Restaurant Consulting provide marketing and operations consulting services to small and medium budget independent restaurants and small chains, and offers downloadable organizational tools on their website. Brandon also operates a home chef service in the Kansas City and Wichita, KS metropolitan areas. Visit visit www.bodellconsulting.com and www.friendthatcooks.com for details.