Mirus Reporter

May 11

Thanks Mom!

Every mother loves Mother's Day; a day for them to be recognized and if they are lucky, pampered.

In this Covid-19 world, it also gave a boost to restaurant sales. Traditionally, Mother's day treats restaurants well, and for some it is one of the busiest days of the year. This year, sales at restaurants increased over 44% from the previous Sunday (May 3). And, it's not like May 3 was a soft day; the sales for that day were almost 10% higher than the previous Sunday.

Total sales volume (not SSS) on Mother's Day was also more than 50% of last year's Mother's Day, a milestone celebrated by many. As an industry we have come a long way from a few weeks ago when aggregate sales were down over 70%. It may take some time for sales to fully recover, but the evidence over the past six weeks shows a steady week by week improvement.

May 1

Does anyone else sense that time is flying even faster than usual? You may not have this distorted sense of time if you are working from home, or laid off, but it is already May. Some thought at the start of this pandemic that all would be normal at this time. Seems like a silly, optimistic projection today, and we still have no clear picture on how the next several months are going to play out.

For those following this diary, I'd like to say thanks. And, if you have any thoughts or ideas you think would be constructive to our audience, please leave your comments at the bottom of this blog, or email me at dave@mirus.com.

Positive events continue to be revealed. Last week, the sales trend data indicated that we might have hit a bump in the road. Since then, the growth of restaurant sales has continued in a steady fashion. Here is the Mirus Index by Day for the month of April compared to the same day from the Previous Week. Easter is the first thing you might notice. There are two anomalies related to Easter, the week it fell on last year, and the week it fell on this year. The large negative is Easter this year, and the spike is the following Sunday when this year is compared to a weak Easter last year. Keep in mind these are same-store calculations, so a restaurant has to be open this year and last year to be included in these numbers.

April 24 Diary Entry

For those who have been following my posts and articles, you have heard the news that the sales of the restaurant industry hit their lowest point at the end of March. Since then, sales have been improving slowly on a week-to-week basis. In recent weeks, the Mirus Index has shown an increase in sales on a same-store basis.

Since Easter, the rate of sales increase accelerated to about 16%, that is until a couple of days ago.

April 13 Diary Entry

The restaurant industry started the year 2020 stronger than any year in more than a decade, although the impact of Covid-19 was already working its way into the numbers. Between March 12 and March 16, city by city, state by state shut down the restaurant dining room. All of the sports leagues also suspended operations. Curbside, takeout, drive-thru and delivery were now the only service channels for restaurants. That is when it hit the fan. Since then, is there any good news?

The Roaring Twenties has a lot of similarities to what has been going on in recent times. In the early 1920's, it was a time of hope and prosperity. With WWI over, the economy was booming, jazz was all the rage, women's rights was a critical topic, and people were out spending lots of money.

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.

Strategic?

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?

The start of a new year means many people are focusing on getting in better shape. You may even be offering some healthier choices on your menu to meet the consumer mindset. Why do so many people vow to eat better in the new year? No doubt losing weight gives you more energy and confidence. As a restaurant executive getting your restaurant data into better shape can have the same effects on your business. Learn why you should resolve to whip your data into shape and how to successfully do it.

The Past

According to a recent article, the top 10 oldest restaurants in America are:

1. McGillin's OldeLouis' Lunch (1895) New Haven, Conn.
2. Buckhorn Exchange (1893) Denver
3. McGillin’s Olde Ale House (1860) Philadelphia
4. Breitbach’s Country Dining (1852) Balltown, Iowa
5. Tadich Grill (1849) San Francisco
6. Antione’s Restaurant (1840) New Orleans
7. Union Oyster House (1826) Boston
8. Griswold Inn (1776) Essex, Conn.
9. Fraunces Tavern (1762) New York City
10. 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.

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.

The ordering experience at a fast-casual restaurant can be overwhelming for some guests. Take a second and imagine this scenario with me: You walk into a fast-casual restaurant with a friend. Let's say this is one of those new pizza concepts where you go through the line picking toppings, making your pizza similar to a Subway line.

It's lunchtime, the place is fairly busy. You have a handful of customers behind you as you stare at the menu board above. But it's ok, they are also staring, trying to decide how they should begin their journey. For some, the ordering experience can even cause anxiety. To make the process go smoothly and put guests at ease there are two things fast-casual operators can do. Focusing on these two areas will help fast casual operations increase profits.