How to be an incredible restaurant in a down economy

A smattering of ideas for you to chew on.  After my last post I felt a need to balance the scales a bit.

I’ve had three great restaurant experiences in the last ten days, and there were some consistent reasons.  Some of these may not be applicable to your establishment, but I think a bit of creative thinking goes a long way in an economy like this.

  • Off night focus. All the following ideas are for during the week, which as we all know is the time that can put the financial statement in the black instead of the red.  You need to get people to go out on Tuesday or Wednesday much more so than Friday or Saturday.  And I suggest these are not broadly advertised, but rather (if you can afford a bit of time to let them build) word of mouth.  “For the next month every weekday night we are …”
  • Little freebies. Which are of course not free (nothing is), but on the slower nights a little plate from the kitchen, a free taster of a new wine, free dessert, etc. goes a long way.  Again, however, it does not BUILD the business unless it is explained that we appreciate you coming in tonight and for the rest of the season on weekday nights we are ….
  • Fixed price menus that are affordable. This has been done with great success for many years by many restaurants.  If you’re not doing it, you are losing potential business.  A three course meal for $20 will draw people in, no doubt.
  • Wine specials. The half price bottle night still works.  How about half price glasses?  Again, the idea is that it gets people in the door.  Food sales will follow (for the most part …  you’ll always get that one customer that orders a glass of the cheapest wine and doesn’t leave a tip.  It’s part of life).
  • Guest chefs. The chef community is strong in the Twin Cities, and a simple way to take advantage of that is a chef swap for three weeknights in a row.  Pump it up, advertise the heck out of it, let your customers know via your email list (and if you don’t have one of those we need to have a sit down talk).  Nothing too fancy as far as food, and definitely nothing too outrageous as far as prices.  This is all about buzz.  Another alternative — contact any local, well known, out of work chefs and see if they want a week in your kitchen.  Pump it up.
  • A consistent message that is positive but lets the customers know the restaurant business is tough right now. This is marketing 101.  Don’t let the customers choose how they tell their friends about eating in your establishment.  Give them the words.  Shake hands.  Discuss the business end of it with them (the public gobbles this up).  Thank them for supporting local endeavors.  Make damn sure they hear that local restaurants exist because of people like them.
  • Spread the good karma. I’m a big believer in this.  When thanking a customer ask them where else they have dined recently.  Then suggest some places that you believe in and want to see succeed.  Good karma pays back faster than you may think, and word will get around that you’re a class act.  And trust me, when favors need to be asked for, this will be like having a million dollars in the bank.

How to be a bad restaurant in a down economy

Photo by Flickr user Naomi Ibuki

The glass is empty for a reason ...

It’s February 2009. We’re in an economic slump the likes of which is scaring many people. Last weekend was Valentine’s Day, and I’m happy to report that many restaurants were full and did several turns. In other words, they got a little (much needed) money in the bank.

Last night my wife and I went out with two good friends. Haven’t done this for awhile — we’ve been holding onto our cash like everybody else. We went to a rather well known local restaurant that has been established for several years. WE WENT WILLING TO SPEND MONEY. I grabbed the wine list and found it smaller and shorter than I remember it being (which is fine). I saw a wine I really wanted to share with my friends, and it also happened to be the most expensive bottle on the list (at $95). I told the server, she got a smile on her face, I felt good about ordering it, and off she went.

Four minutes later, she returned empty handed. “Sorry, we’re out of that one.” No ideas, no suggestions, no offers for another product at a discount. Nothing.

This gave me a chance to think logically: $95 is a lot of money today and I really shouldn’t be spending that much. Okay, then, I’ll take the $55 bottle right there. Four minutes later, the perky waitress came back empty handed and put her hand on my shoulder. “You’re going to hate me, but …”

Think about this: We’re six days off of clearly the busiest weekend in the restaurant business in over a month, and they are still out of stock on two of the most expensive wines on their list. And I KNOW they could have the wine because they are sold by World Class Wines and we have stock! Also consider the following:

  • No options were given. Nothing was presented to try to keep my business.
  • The manager never visited to explain or apologize.

So we left. Us and our $300+ that we were ready to spend but suddenly saw the reality that we didn’t have to. But it gets better…

We were still hungry and wanted one more glass of wine. So we walked across the street to a hip, happening, uber cool restaurant that is known for a good wine list and delicious appetizers. We sat down, were greeted promptly, and things were looking up. My wife ordered a glass of very decent Shriaz (confirming my theory that in tough times people who know wine will easily spend $14 on one glass of great wine rather than two glasses of Chateau Cashflow junk). Amazingly, they were out of it. No offers, no explanation, and barely an apology. We stayed for an hour, spent less than we planned on, and went home.

So a few observations:

  • Inventory control is everything today, and out of stocks are a natural and unfortunate side effect. But please tell your servers and have them convey it to me BEFORE I try to order a wine. Communication is everything.
  • Empower the servers to make offers or concessions to keep me happy. “We’ll happy give you a glass of our most expensive wine at the same price” goes a LONG way.
  • Think about this — Minnesotans are constantly worried about our ‘big city’ image. Are we in the big leagues? Just because we have four professional sports teams and internationally known chefs are opening restaurants here, are we worthy? Well, if instead of four friends that live in the Twin Cities what if we happened to be four business people from Chicago trying to impress a client? If this same experience happened to them, the Twin Cities would be the laughing stock of their jokes when returning home. “You’ll never believe it, they put all this good stuff on their wine lists and nobody even had it in stock!” What happens in your restaurant and on your wine lists are BIGGER THAN JUST YOUR OWN BUSINESS.
  • Finally, because of these incidents, do you think I’m going to be in a rush to return to these establishments? Not a chance. There are too many choices out there.

The New York Times article and the ‘magic formula’

Many of you have read Frank Bruni’s wonderful article in this week’s New York Times regarding the current state of restaurant business in NYC.  Besides wondering how they got the big three to pose for the photo, I was wondering what stones have been left unturned in the quest for customers at restaurants.  My thought is: somebody is doing it right, and maybe that somebody is you.  Maybe you have the magic formula that is keeping people coming back.  And what is that magic formula?

The magic formula is not price — plenty of non-cheap restaurants are drawing the crowds.  People still want to have the experience, but maybe just once a month instead of once a week.

The magic formula is not location — on a vacation to Portland last month I went to a restaurant where the view out the window included a homeless guy fertilizing a tree, among other colorful moments.  The place was packed and it was a Sunday night (the restaurant was Clyde Common, and it was wonderful).

The magic formula is not specials and happy hours, though those don’t hurt for certain time blocks or days.

The magic formula is not necessarily to be hip, new, hot, the new kid on the block.

The magic formula is this: consistently overdeliver for the price, and (this is the critical part) make damn sure to tell everybody you know that you’re pulling out all the stops to overdeliver for the price. If you make it excessively clear to every customer, vendor, and critic that you’re serious about overdelivering for the price, the message will spread.  If you lay it out clearly, people are more apt to pass it along.

This is NOT the time to cut quality and raise prices.  Quite the opposite.  Keep the prices and overdeliver on quality.

Shipping containers 101

Shipping Containers.  Image by Flickr user melted_snowball

Shipping Containers. Image by Flickr user melted_snowball

They move the wine we love.  They transport millions of tons of goods across the oceans.  They are shipping containers, and like everything else, the price of using them is going up.

In the quest to help you understand the true costs involved in the wine business, it’s important that you read this snippit from an article in today’s New York Times about the cost of shipping containers.

Australian wine, which has dominated the under $8 market thanks to one brand alone, will obviously be the most affected … it’s a long trip from Sydney to the shores of California.  That is to say, that particular brand and others in its price range will be feeling a bigger hit vis-a-vis a percentage of their price.  But this transportation increase will be felt throughout the system and with any and all imported goods.  It’s suddenly far cheaper to consider American wines for the ‘affordable pour’ at your restaurant!

From the New York Times:

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”