Feeding Frenzy

The restaurant industry served up record earnings of $632 billion by August of 2012, a 3.5 increase over the same time the previous year, according to the National Restaurant Association (NRA). Unfortunately, this growth was not spread equally among all operators.

The NRA reported that the general state of the economy made it difficult for many restaurants to build and maintain sales volumes, while wholesale food price inflation reached its highest rate – 8 percent – in 30 years.

These challenges affect the entire spectrum of the restaurant business, of course, but small, independent operators with fewer resources have struggled in particular. Bonnie Riggs, a 25-year restaurant industry analyst for NPD Group’s foodservice division, explains the recession has made it almost impossible for some independent restaurants to stay afloat. “Independents have been down by 3 percent in revenue this year; that has been the case throughout the recession,” she notes.

“Independents have not fared well during the recession,” Riggs says. “It’s difficult for them to go up against the marketing powerhouses of the major chains.” But Riggs also notes there are things small operators can do to boost their sales without spending a lot of money.

The place for independents to start is online. “Many of them don’t have a website, but they should,” Riggs observes. “I just did a study on social media and the No. 1 place that consumers go to find out about restaurants is the Internet. Consumers first go to the restaurant’s website to see what is new, what is being offered and if there are any promotions.”

Riggs suggests that Groupon-type deals can be especially helpful for independent operators. “The key is to generate traffic – have people try out the restaurant,” Riggs says. “Hopefully, they will have a great experience and will keep coming back.”

At the end of the day, it’s all about building customer loyalty. “Small res-taurants are dependent on building loyalty and they can do that quite well,” Riggs says. “Those that do well in these difficult times are those that have been able to generate a loyal base through service that goes above and beyond, and focuses on making guests feel comfortable and welcome.”

In addition to giving their patrons plenty of TLC, independent operators should stay on top of industry developments so they are better prepared to weather its inevitable up-and-down cycles. “The best thing independent op-erators can do is to keep abreast of the trends as much as they can,” Riggs says. “They can do this by making sure they read trade association magazines for their region or at a national level.” Call us biased if you will, but that sounds like great advice.­

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