Menu pricing experts are seeing the old approaches for determining the best price for each item no longer work. The simple explanation for this shift lies in the changes in customer behavior and the financial reality of those customers with the devastation of inflation, and the effects of the pandemic. Learn why menu pricing now requires Market Basket Analysis.
We talk a lot about specific ways restaurants should measure performance. It's basically what we help restaurant executives do. The data management services and analytic tools Mirus provides allows multi-unit restaurants to see how things are going on a broad and drilled down basis. There are lots of things that go into measuring restaurant performance. In this post we are going to discus three basic ways restaurants measure performance.
Topics: Restaurant Performance
The one year anniversary of Covid-19 in the United States has come and gone, and vaccines are going into the arms of people faster than we expected back in December. It's only a matter of time when everyone who wants a vaccine has received it. There is light at the end of the tunnel.
For those following our irregular updates on the impact of Covid on restaurants, the world turned upside down for many in the past week. The picture below shows the last 7 days of Mirus Index. What do you think is going on?
In an era when terms like Data Scientist, and Analyst are commonly used in mass media, it is important to understand that interpreting data can be complicated. It is easy to draw the wrong conclusion. I touched on this point in my material for Restaurant Finance Week last November. You should take caution when measuring your restaurant performance during this Covid period. Read on to see why what you see may not be what's happening and how a poor analysis can lead you to the wrong conclusion.
We have been sharing a story this year on the progression of Covid-19 and its impact on the restaurant industry. After months of steady improvement, there are signs that the situation is getting worse for the industry. The speed of the decline also seems to be increasing, at least in some segments.
The news and social media are filled with stories about dramatic new technologies like Augmented Reality (AR), and Artificial Intelligence (AI), and how these technologies are going to revolutionize every day life. Business Intelligence (BI) is part of those story lines, and the term suffers the same misconceptions and misunderstandings as AR or AI. These terms are broad categories of software, services, skills, and systems, but are not specific products or solutions. These terms are useful for discussing concepts and potential uses, but are not very useful to companies trying to apply them.
Everyone has likely heard about the dramatic impact the Covid pandemic has had on restaurant sales. In March, it was common for restaurants to have lost 70% or more of their sales from 2019. Since then, we have all been monitoring the progress of sales returning to restaurants. One tool for monitoring the restaurant industry is the Mirus Index which allows us to examine trends daily across thousands of restaurants. Index tracks both sales and traffic patterns for each location, and the trends for both of these metrics leads you to some interesting questions. Have you been tracking both your sales as well as your traffic? Do you see any differences in each metric's trendline?
Heading back to School!
I hope you continue to be safe and avoid the virus. Data shows us the virus will find the soft spots in our country to flourish, and that the areas affected move around a lot. Currently, many mid-western states are seeing cases and hospitalizations going up, while they are going down in other areas.
A big, new wild card in the equation is students going back to school. While that may be of concern as it relates to potential increases in cases, the past month has introduced other events that have weathered well. For example, the NBA, MLB, PGA, MLS and other sports have resumed their seasons. While there have been some games postponed due to infections, my impression is that those leagues are doing better than some had expected. I hope the same will be true for the schools.
A coincidental event to the return to school each year is Labor Day. And, after a summer of slow but steady improvement in restaurant sales and traffic, the holiday created a bit of optimism with the volume of business that restaurants experienced. Before we get into the most recent holiday, let's review where we've been.
Covid Impact Recap
Mirus Index, which is a same-store comparison to the same day last year, is stuck around -20%. This means that, on average, a Mirus client location that is open today is generating about 80% of the sales it had last year. It is important to keep in mind that this is the average, and averages can be misleading in both directions. For example, more than half of our clients are experiencing sales that are better than -6%. But for others, the impact of Covid has been far more dramatic, with sales hovering around -50%, or worse in a few cases.
Dog days of summer
First off, I hope you continue to be safe and avoid the virus. As this pandemic continues, the rate of spread is increasing in many cities around the US. However, the percentage of the US population that has come into contact with the virus was estimated to be no more than 7-8% by the CDC this past week. So, there are a whole lot of us that are unprotected from the virus.
And now for the bad news....