Restaurants can expect beef prices to keep rising | Commodities content from Nations Restaurant News

What’s your plan for increasing prices? Beef prices are at an all-time high and they don’t look to be coming down any time soon.

Restaurants can expect beef prices to keep rising | Commodities content from Nations Restaurant News.

 

Restaurateurs shame rude patrons in growing ‘culture war’ – Business – CBC News

Is it ever a good idea to “shame” your customers.

http://www.cbc.ca/news/business/story/2013/04/19/business-restaurant-customers-culture-war.html

Discouraging developments at Groupon? Shocker…

This doesn’t come as a surprise to anyone who reads my blog on a regular basis, but I’m shocked (sense the sarcasm) that things aren’t going well financially for Groupon. Rather than rehash an entire article, I thought I would refer you to it to give it a read if you are in the mood for a little Groupon bashing.

Discouraging developments at Groupon

Groupon a bad deal for restaurants and everyone else, including Groupon

Groupon logo

Groupon CEO fired | click for Yahoo Finance article

What happens when you sell a product or service that “kills” your customers?

Just ask recently fired Groupon CEO Andrew Mason. I don’t know that he has the answer, but I do.

Groupon was a bad idea from the start. They talk businesses into selling their goods or services for half the cost of their normal price. Of that half price that is collected, Groupon keeps half and the business keeps the last half, minus any charges for processing fees on both their cut and Groupon’s cut, which equals about 7% of the business’ portion.So let’s do the math. Groupon sells a 50% off deal to your restaurant at $20. Groupon keeps $10 for every one sold. You keep $10 minus 7%, leaving you with $9.30.

With that $9.30 collected from the customer, you have to give them $40 worth of goods or services. If you are like most restaurants, just your cost of goods on $40 eats up $10-16 (25-40%), resulting in a loss of anywhere from $.70 to $6.70 for EVERY Groupon deal sold. That’s before you calculate in additional paper products, cleaning supplies, extra staff, and lost revenue from seats that are taken away from full price customers, among other expenses.

All this turns Groupon into the single most expensive tool there is for marketing your restaurant. This a bad, bad business model. A company that promotes itself by claiming they can bring you new business ultimately ends up putting many of it’s own customers out of business, or their customers wisen up and realize Groupon is a horribly expensive way to market and they stop using the service. Either way, Groupon is cannibalizing itself and it’s customers. Groupon claims the payoff is new, regular customers for the business. The reality is that the customers are loyal to Groupon, not the business, and they follow the next deal to the next restaurant.

No business model is going to succeed long term by killing it’s customers unless it has a never ending supply of new customers. For Groupon, that means it’s hey day in the US is over. It has run it’s course here and most businesses are too smart to fall prey to it’s predatory business practices. Groupon will not rebound from it’s current woes in this market. It’s only hope is to expand into untapped markets where business owners are not aware of the dangerous effects of using Groupon. Groupon is the first daily deal model to fall because it was the first in the market. It will not be the last however.

Ultimately, nobody wins with Groupon, except the people who buy the Groupons. Check out the linked article from Yahoo Finance about the firing of Groupon CEO, Andrew Mason. If you own Groupon stock, I’m sorry for your loss, but cut your losses and dump it now. It’s not coming back.

Brandon O’Dell is an independent restaurant consultant and owner of O’Dell Restaurant Consulting, a restaurant consulting company that offers operations and marketing consulting for independent restaurants and small chains. Learn more at their website or visit their webstore to find Excel speadsheets and Word templates to help you build a better restaurant business.

Should an Applebees server who posted a customer receipt online be fired?

A recent story from my area of the country brings up an important question that will inevitably come up many more times. What should a restaurant owner do if an employee posts a customer’s receipt online? Does it make any difference that the receipt has something rude written on it?

Here is a link to the original story I’m referencing on the Consumerist. In short, the media is reporting that a church pastor stiffed a waitress because they didn’t like the 18% auto-gratuity on their check, the waitress posted the receipt online and then was fired by Applebees. One media outlet, the Huffington Post, is circulating a petition to get the server her job back.

Here is the USA Today version:

There are some major mistakes in most, if not all the news stories I’ve seen about this situation other than the original. Since the Consumerist’s original story had the facts right, it begs the question of intent of the other media outlets in misstating them. Here are the important facts being left out:

  • The waitress who posted the receipt online was not the waitress who waited on the pastor. She was not the one purportedly “stiffed”.
  • While the pastor crossed out the auto-gratuity and added up the tab without the tip, she did leave the server a $6 cash tip on a $34.93 tab, equating to a 17% tip. The server was not “stiffed” at all.
  • Applebees, where the incident took place, charged the 18% auto-gratuity to the pastor anyways, because it is their policy to charge 18% automatically on tables of 8 or more. This is standard in many full service restaurants. The waitress actually made a 35% tip on the table, though that certainly wasn’t the intent of the pastor.

I’m not posting this information to defend the pastor in any way. The pastor wrote “I give God 10%, why do you get 18%?” on the check. Even if she intended it for the restaurant and not the waitress, this sort of activity by a customer is inexcusable. The restaurant should “fire” the pastor as a customer for leaving such a comment on the tab in my opinion, or at a minimum give them a warning, and the church should fire the pastor for disgracing the church as its primary representative in the public. Using God as an excuse to make a negative statement about tipping an individual person is never okay, even if she did leave the server a 17% cash tip.

The real question being raised here is, “Should the server who posted the receipt be fired?”

My opinion is that yes, the employee was rightfully fired by the Applebees where she worked. Customer receipts are private property of both the customer and the business, not the server. As such, the server has no right to post that information online, regardless of what was written on it. Had the server only shared what was written on the receipt, without posting a picture of the receipt, I might have a different opinion. It’s possible there might even be some sort of criminal law broken by the server. The server’s defense is that there is nothing in the employee manual forbidding her from copying and posting receipts online.

I’d like to get the input of restaurant owners and managers out there that could face the same situation in the future. What do you think is the right thing to do as a restaurant owner?

One piece of advice I do have to offer restaurant owners on this type of incident is that you should have a policy in your manual forbidding employees from posting pictures of guests, their personal property, or the property of the restaurant online. I also believe it would be good to expressly allow the posting of food and drink pictures online for the purpose of promoting the restaurant.

Brandon O’Dell with O’Dell Restaurant Consulting is an independent restaurant consultant who offers operations and concept strategy consulting for independent restaurants and small chains. You can learn more about their services at www.bodellconsulting.com.

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Restaurant social media marketing trends for 2013 | Restaurant-Hospitality.com

Here’s a good article I found on social media marketing trends for 2013. Social media marketing can be a very cost effective way for restaurants and other food services to drive traffic. With the cost being so inexpensive, I think it is very important that tools like Facebook, Twitter, Pinterest and blogs be used to drive traffic to your main website and even directly into your operation.

Here’s the article link…

http://restaurant-hospitality.com/blog/keep-your-eye-these-emerging-social-media-trends

What restaurant operators need to know about QR codes | Marketing content from Restaurant Hospitality

Everything you need to know about QR codesBrandon O’Dell with O’Dell Restaurant Consulting offers operations consulting and brand strategy advice for small to medium sized restaurants, food services and private clubs.

Restaurants, chef emphasize sourcing local ingredients | Nation’s Restaurant News

Locally sourcing ingredients is evolving from a niche market into the mainstream. Not sourcing any of your products locally will soon become a liability for your restaurant if it hasn’t already. Rather than the bloated menus full of heat and eat items, the new generation of restaurant concepts are offering less selections, making everything from scratch, and buying as many ingredients as possible from within 150 miles of their location. Whether you are a bleeding heart activist, or a pro-business capitalist, sourcing items close to home just makes sense. You can pat yourself on the back for saving the environment, or pat yourself for saving the local economy. Your choice. Either way, the move to source foods locally is getting to be less and less optional.

Restaurants, chefs emphasize sourcing local ingredients | Nation’s Restaurant News.

Brandon O’Dell with O’Dell Restaurant Consulting offers operations and concept strategy tools and advice for independent restaurants and small chains. Learn more at www.bodellconsulting.com.