Market Slowdown: Restaurant Lessons From The 2008 Recession
Recessions tend to hit restaurants hardest than most industries. Fortunately, there are many lessons that the industry can learn from the 2008 recession.
Snippet: To restaurant owners who have been at it since 2008 — congratulations. You’ve defied the odds and survived one of the toughest economies in modern history. Thankfully, the survivors of that crash have plenty to teach those who weren’t around at the time.
Restaurant owners who were around in 2008 are starting to see similarities between then and now. The economic headwinds. The warnings of a recession. The difficulty getting certain supplies and the fact that people are starting to cut back on discretionary spending, including eating out. Indeed, the warning lights are flashing: It might soon be recession time again.
To those restaurant owners: congratulations. You’ve defied the odds and survived one of the toughest economies in modern history. Thankfully, the survivors of that crash have plenty to teach those who weren’t around at the time. Here are some of the restaurant lessons from 2008 and what you need to know.
How Can You Do More With Less?
The phrase “doing more with less” became truly popular during the Great Recession when massive layoffs forced businesses to try to do more work with fewer employees. However, it never went away; it’s a mantra that remains today. Indeed, the idea of a “hustle” culture can trace its origins to this idea of doing more with less.
Realistically speaking, what does this mean? Unfortunately, it may mean a rather whipsaw switch for many restaurant owners. After all, the biggest problem for the industry today remains employee retention and hiring. Things may soon change, and you may not have enough money or business to support employees.
What does this mean? You’ll have to reimagine your operations, and you will have to do it now. That being said, this should not be a last-second pivot. If you genuinely believe that a recession is coming — and there is evidence that this is the case — this is the time to plan.
So, what do you do? Consider the following:
- If business gets bad — if customers stop coming and demand slows — how can you readjust your business? Let’s say business drops by 10%. 20%. What steps will you take, and when exactly will you take those steps?
- Are there ways you can reimagine your operations to create a smoother and more efficient process?
- On a personal level, are there more things you can do to get involved in the restaurant’s day-to-day operations and help your staff?
The further ahead you plan, the more time you will have to consider what changes need to be made and how you can prepare for them.
What About Value Meals?
In a recession, people spend less money. So your challenge is to appeal to your customers — or new ones — and get your product into their hands.
Fortunately, thanks to COVID, restaurants that survive are adept at being flexible. One way that you may want to embrace that flexibility is via value meals. What additional value can you create for your customers? Can you make a specific product — like regular meals, discounts, or a subscription-based ordering model — that is too good for your customers to pass up?
Remember, you don’t have to reinvent the wheel. There may already be plenty of examples of restaurants that have found ways to repackage existing products and market them into something much more vital for their customers. The trick is developing those products and ensuring they are ready to go if and when a recession hits.
How Can Technology Save You?
One of the most prominent restaurant trends for the near future is the continued rise in automation. This automation is happening in virtually every facet of the restaurant industry. Servers are being automated, with robotic waiters being developed to serve food. More self-serve options are becoming prominent in fast-food and casual dining options. People can make reservations via apps, which has been the case for years.
People are being increasingly cut out of the restaurant staffing equation. As a result, automation has been beneficial in a variety of respects. It can also be a life-saver in managing back office operations, such as accounting, finance, and tip distribution.
If you are a restaurant owner or manager, you are obligated to your staff and customers to investigate what technological tools may be available. Remember that these tools don’t have to replace a single employee. Instead, they may allow you to run certain aspects of your business more smoothly and efficiently.
From there, you can shift staff to roles that cannot be automated, thus allowing you to create a better product and give your customers a better experience. Alternatively, there’s no question: In some cases, a machine can replace a human and allow you to protect your bottom line.
Have You Considered the Importance of Association(s)?
One of the biggest challenges among restaurants is this near cut-throat competition when none often exists. With a few exceptions, restaurants don’t compete with each other. Instead, they compliment each other. As a result, when one restaurant in a geographic area succeeds, others are more likely to.
This means a few things. First, it is vitally essential for you to identify local business groups, Chambers of Commerce, or associations that you can join. These can allow you to exchange ideas, create joint promotions, and work with other community members to support each other — especially when times are tough.
Second, remember, you can join various national associations, which may be specific to your slice of the restaurant industry. These associations can provide you with more personalized and customized tips that may be critical to your survival. Consider joining one of these associations if you are looking for advice on how to survive a recession.
You may often be asked to shell out hefty dues towards the membership organization. Bad organizations won’t give you any value, but good ones will often repay your investment in them. Make sure to do your homework about what associations are worth joining before dropping a dime, but don’t let the initial price tag of some of these groups scare you off. Instead, consider all the ways you can make money from an association.
There are plenty of ways you can continue to grow and thrive, provided that you innovate, save yourself work, and treat your staff and customers with the respect they deserve. One of the potential technological solutions you can embrace is TipHaus. At TipHaus, we automate tip distribution, ensuring accurate handling of all tips that keep your employees paid and happy. This easy process allows you to avoid data entry and get either into the kitchen or with your customers, where you belong. Want more information? Contact us today.