The State of the Restaurant Industry

Speaker 1 0:01

Welcome to another edition of Give an Ovation , the restaurant guest experience podcast , where I talk to industry experts to get their strategies and tactics you can use to create a five star guest experience . This podcast is sponsored by Ovation , a two question SMS based real time guest feedback platform that helps restaurants measure and build their guest experience . Learn more at ovationupcom . And today I am so excited if you can't tell by my especially aesthetic introduction I am here with the one and only Sam Ocus . Now I wanted to have him on because he is an award winning editorial director of Informa's restaurant and food group , which publishes the nation's restaurant news , restaurant hospitality , supermarket news and food management , and just overall he's got a great podcast and just overall , a guy who is in the fricking know , Sam , thanks for coming on the podcast man .

Speaker 2 0:54

Well , thanks for having me , Zach . I love the energy . It's getting me amped up . I like this .

Speaker 1 0:59

Well , sam , tell me , like what's the Scuttlebud man ? Tell me about what's going on , what's exciting you in the industry , what's worrying you in the industry . I mean you get a little taste of , you have like a buffet of news . You know what should we avoid and what should we try .

Speaker 2 1:14

Well , first off , I feel like we're gonna talk a lot about children in this conversation , because I know you have four young children , I have two young children and so when you say Scuttlebud , I'm like thinking about the little mermaid all of a sudden . So that song has been playing in my house for months , since that movie came out . So now I'm should we just talk about Disney instead ? Of ?

Speaker 1 1:34

the restaurant industry oh my goodness , that's right , I know a lot safer than politics . Or maybe not , I don't know .

Speaker 2 1:40

No , maybe not , not with Disney . So , yeah , I mean , look , restaurant industry , broadly speaking , 30,000 foot viewpoint , I'm feeling a lot better than I was feeling two years ago . You know , I don't know when this publishes , but we're getting ready to head to Palm Springs for our creative event and we've done that the last three years and two years ago , mind you , just two years ago , we were a worry that nobody was gonna show up because there was a Delta or whatever surge of COVID and people were backing out and it was a scary time . And that was just for an event , for a conference , right .

Speaker 2 2:12

I mean , the industry still at two years ago was just in the thick of what's the next regulation that's gonna come around ? What's the next expectation from the customer ? What am I allowed to say ? What can't I say ? It was so weird , and I just say that because I'm like that was only two years ago . So two years later , we're in a future where it's look , it's not perfect , there's still a lot of challenges , but I just love the optimism , I love the potential , I love that . You know , when I go to restaurant conferences , I don't have to talk about , you know , cleanliness and food safety , though they are very important . But we're talking about real potential in technology , real potential in service models and those kinds of things , and so so that's . I mean . You know I could go any direction from there , but I'll broadly will say I feel very good about the industry these days .

Speaker 1 3:04

And I'm excited for , for Create . I know this year we found out about a little bit too late , but we actually knocked off a few shows of our plan for next year and we added Create to it because we've heard so many great things and you're getting a lot of great people there , I think what's what are , as you're again this 30,000 foot view looking at this industry , so you feel optimistic . What are some things that are concerning to you ?

Speaker 2 3:32

Concerning . Where do I begin ? There are always concerning things for the restaurant industry . I mean , of course labor is still concerning , but I am I've been hearing less about that .

Speaker 2 3:41

Sam , exactly , yeah , well you know it's funny because we have a session at Create we're going to do on operational excellence and when I brought the panel together to talk to them about some talking points , I was like , yeah , labor , we should probably talk about labor . And all the panelists were like we're good , like I mean , for one they've probably talked too much about labor . But for the other , labor has , I think , has gotten much better . It's not as volatile as it was .

Speaker 2 4:08

Recruitment and retention is not quite as difficult as certainly two years ago and even a year ago . And I think part of that might be because the industry has figured out how to , you know , pay your employees better , double down on incentives , invest in your team beyond the financial element of it . So that was part of it . But also , you know , it's just in general . A lot of the efficiencies I think brought about in the restaurant industry recently using technology and other methods have made the restaurant job less demanding and now restaurants can go out there and show their potential employees hey , you're going to get paid well , because you know that's kind of a mandate now that restaurants need to pay well . But also this is not as difficult as it used to be . You know we're automating a lot of this stuff .

Speaker 2 4:54

You need you to basically press this button , push that button , pull down this lever , serve the thing over the counter and you're going to make $15 an hour . So it's a more appealing proposition that I think it's been in years past and that has has brought you know employees back to industry . Of course , economic conditions if you look at the macroeconomic conditions , there's also a reason that you know the the market is just a little bit more robust than it has been in the past . But I do think restaurants are just an appealing place to work once again .

Speaker 1 5:23

Yeah , and I think about some of I mean even some of our customers where they've outsourced the entire guest guest communication to us , right ? So their employees are literally in their job and their job is to make food and deal with the customers in store . There's no phones , there's no emails they have to answer . There's no angry customers that are , you know , calling in , like all that is handled externally . And I think you're right , like we're . We have seen restaurants adapt , which we do so well , but adapt to that , to that new environment and the new fact that you're not getting the same help that you used to . So , instead of fighting it , let's just find ways to fix it . Let's have technology do some of the things , let's outsource some of the things that used to be essential but now are optional , right ?

Speaker 2 6:15

Yeah , and hopefully the best players are also recognizing that . You know , instead of saying OK , we'll replace our people with these tools that make this thing easier , or whatever that they're recognizing , ok , that opens up our ability to redeploy our labor . It opens up our ability to invest in hospitality , especially right . So if you have , you know , some young employees who don't need to push that button as much as they used to , can they be a smiling face to your customers and welcome those people into create a warmer , more hospitable experience .

Speaker 1 6:48

Yeah , because what we find is like when you're in person , you want to feel seen . When you're digital , you want to feel heard , and so the benefit is that you can't feel seen if people are like in the back on their computer doing stuff . But then again , to feel heard , you also don't have to have like a phone call with every single guest who has an issue . So I think that's an interesting point . So I love how the restaurant industry is pivoting with labor . Anything else that you're seeing , that's like oh no , like the shrimp might be bad . The shrimp might be bad In this buffet of news .

Speaker 2 7:27

I was going to say , should we start with the shrimp ? I don't know . I mean , availability of real estate is a real issue , of course . Cost of building cost and cost of goods , I mean all of those things continue to be a pretty tricky thing for the industry today . I mean , nobody wants to raise their prices anymore . After two years of inflation , prices up 15% on average , nobody wants to keep pushing that and figuring out what's the breaking point for customers . Unfortunately , we are starting to see what the breaking point for customers is , and it's not just the price increases , it's those fees .

Speaker 2 8:05

So this has been a topic of conversation a lot in the past couple of weeks , which is fee fatigue , as we're calling it , and that is that there's a 10% to 15% increase in the prices that I'm typically paying . But now also there is this random fee that's attacked on for whatever reason , of course , the third party delivery fees that are added on there and , of course , asking for a tip . I've told the story a couple of times , so forgive me for anybody who's listening to this and has heard the story already , but I was traveling with my family a month ago and we were flying through Newark on our head of labor at Newark and our kids were hungry . We needed to feed them . We were looking for snacks because of course kids don't eat regular food like normal people and we stopped at this unstaffed corner market in the Newark Airport . Again , no employees .

Speaker 1 9:00

No , sam , don't tell me . Don't tell me , you know what's coming .

Speaker 2 9:04

Grab whatever we need and scan it at the kiosk . We did . And it asks us if we want a tip 20% . And , by the way , in the Newark Airport snacks just three or four snacks for us $70 because it's an airport so they're already upcharging .

Service Industry Tipping Frustration

Speaker 2 9:22

But then they had the call to ask if I wanted a tip . And I understand , being in my position in the industry , I understand what this is all about and I was still livid . I'm like how dare they think that an experience in which there was no service that I should have to tip ? And it's just illustrative of what's going on across the country right now , which is that all of these things come together to make a what could have been a $10 price point Now suddenly a $18 , $19 , $20 price point , and that is really frustrating to guest , but unfortunately I feel like it's .