During the month of March 2020, we posted results of the Mirus Index on social media to keep restaurant operators informed on what is happening at an industry level. This article is intended to be a diary of observations related to how COVID-19 is changing the restaurant world from our perspective. We will update this every few days during this pandemic to keep multi-unit restaurant operators informed of the bigger picture.
The restaurant business is complex, much more so than customers would typically believe. We have lived through an explosion of new software tools that help restaurant operators manage this complexity and in the process they have created a new dilemma; understanding it all.
According to the Mirus Index, January closed with the best sales and traffic performance since 2015. Traffic, in particular, has been an industry problem for most of the last 5 years.
Mirus is happy to report that our clients, as measured by the Mirus Index each day, are outperforming both the industry averages, and the government's numbers in the 3rd quarter.
2019 is a pretty good year, so far. But, according to Black Box Intelligence's latest report on sales and traffic, both were negative for July (-1% and -4%, respectively). Both were also negative, albeit marginally, in June (-0.01% and -3.1%, respectively).
On The Rise
Discounting in restaurants is on the rise, as measured by Mirus Index, and is about 30% higher than a year ago. Examining this trend, it looks like discounting started climbing in 2015 but was up and down until mid-2016. Since then the trend has been a steady increase in discounting, except for the traditional holiday spike in November and December.
The strategy of discounting is often debated among industry experts with some saying it is always a bad idea while others taking a more nuanced position that says discounting can be useful to achieve goals in specific situations.
We had noticed that Average Check has been increasing as well as Discounts. If you overlay the trend for Average Check against the Discount trend, you see that while discounts have gone up about 50% since the start of 2017, so has the Average Check, about 25%. Could the increase in discounts be related to the strategy of increasing prices?
What do you think will be the most popular restaurant business trends for 2019? I recently had the privilege to sit down with FSR Magazine to briefly discuss this topic.
We discuss four prevailing predictions:
Analyzing Customer Grain Details?
For the most part, restaurants in the past have operated knowing very little about their loyal customers. There are some exceptions, such as pizza delivery concepts, where they have been collecting detailed grains like customer's full name and home addresses.
However, today with the increased competitiveness and shifting preferences of a new generation, it's imperative the restaurants understand all they can about their customers. If the goal is to keep current customers while also trying to attract new customers, you have to leverage the data your restaurants are producing. That way you can understand what's working and what's not.
Customer grain details in restaurant reporting can help you do just that. Watch the presentation below to learn more about customer grain and how your restaurant leadership can use the information to make better business decisions.
Topics: Restaurant Marketing
According to a recent article, the top 10 oldest restaurants in America are:
- McGillin's OldeLouis' Lunch (1895) New Haven, Conn.
- Buckhorn Exchange (1893) Denver
- McGillin’s Olde Ale House (1860) Philadelphia
- Breitbach’s Country Dining (1852) Balltown, Iowa
- Tadich Grill (1849) San Francisco
- Antione’s Restaurant (1840) New Orleans
- Union Oyster House (1826) Boston
- Griswold Inn (1776) Essex, Conn.
- Fraunces Tavern (1762) New York City
- White Horse Tavern (1673) Newport, R.I.
To me, it is fascinating that these establishments are still going!
Most likely, today's restaurants evolved out of the Tavern where travelers could get a bed and a meal on their journey. I am sure that in the 18th and early 19th centuries most people would not think of paying someone to cook a meal for them. It required discretionary income and the 'middle class' would not evolve until later during the industrial revolution.
This year we are pleased to be hosting the Mirus User Conference in our home town of Houston, and Everyone is invited! This conference is the best way to see how Mirus provides a powerful advantage to our clients for building customer satisfaction, increasing sales, and getting to the action plan quicker than is possible with spreadsheets or static reporting.
Topics: Restaurant Custom Reporting
Is Food Delievery Right For Your Restaurant Business?
No topic is hotter in the restaurant space than delivery today. An amazing shift is taking place where customers want their favorite food, and not just pizza, delivered wherever and whenever. For me, delivery became a new reality and not just a fad when I saw McDonald's advertising during the recent World Cup matches that they would now be delivering food. This was no longer a test in a few US markets but now ready for prime time by a heavy hitter in the QSR realm.
There are people projecting that delivery will do to restaurants what Amazon did to retail. I think it is too early to tell for sure, and caution is wise. Nonetheless, I am seeing many restaurant companies testing delivery in select markets and many more are discussing it. However, before you make the decision to plunge into this new channel, there are a few questions you should ask yourself.
Whose Customer Is It?
How are your customers going to request a delivery? Will you hire your own drivers and create your own e-commerce website, or will you use a third-party delivery service? The first option will take more time and money before you can start comparing to a 3rd party option. But, which alternative do your customers prefer?
Examples of restaurants who have built their own platforms include Panera and Domino's, and both efforts are considered successful, albeit expensive. It's simple, the customer goes to the brand website and orders. An upside to this approach is your customer sees only what you want them to see and their experience is directly connected to your brand. Another plus for this option is the ability to add other programs and services beyond ordering, such as loyalty and payment.