There is an old saying that the only constant in life is change, and the longer it has been since the last change, the next change or challenge is even closer.
There is also an understanding in business that you can not pay someone more than the value of what they produce.
Lastly, you can not charge a price for a product or service that is higher than people can afford as they will go to a different supplier, seek a cheaper alternative or give up the product or service completely if it is not deemed a necessity.
With these three basic business principles in mind, restaurants are facing headwinds right now that need decisive action if they are to survive. These headwinds are not a temporary aberration; they will continue getting stronger over the next 3 to 5 years.
Clearly the cost of living increases and rising interest rates mean people have less disposable income, meaning they will have less to spend on dining at restaurants. Restaurants need to be acutely aware not only of the pressures that they are facing, but just as importantly, the pressures that their customers are facing - and continuously putting prices up is not an option. Similarly, with the new flexible style of working that has taken off since the pandemic, people only going into their office three days a week means CBD restaurants will not be getting the five days of trade they were once familiar with. They will need to see how they can get their previous five days revenue, now in only three days.
In terms of the specific pressures that restaurants are facing - increasing wages, electricity and gas costs, increasing food costs and increasing interest rates - it seems that every single aspect and input into a restaurant has been significantly increasing in cost. These cost increases are not even limited to part of a restaurant’s operation, where it has the flexibility to change some of its inputs to reduce its cost structure. Meanwhile, customers’ increasing knowledge in food, and ever-changing dietary preferences have led to higher demands for personalisation, including accommodating allergies.
These headwinds will not go away anytime soon, so restaurants will have to look for new ways to solve them.
One way to try and overcome these headwinds would be to think about how a restaurant can increase its revenue. They will need to start thinking like retail stores and look at how they can maximise the revenue within their space, not just the revenue they are making per table. Are the tables the best fit for the space occupied? Are they flexible enough to cater for the different group sizes that book on different days and different occasions? If the space is not being optimised, there is a very good chance that the revenue is not being optimised either.
Similarly, restaurants will need to rethink the value and utility of the tables offered within their space - for example, a table with a beautiful view, or a private booth has far greater utility and value to a customer's dining experience than a table next to the kitchen or the bathrooms. While dynamic menus and pricing will sound foreign to many restaurateurs, many customers may be happy to pay a little extra for a better table during a special occasion, and during these difficult and challenging times, this extra revenue will be invaluable.
The concepts of managing space, dynamic menus and dynamic pricing are only of benefit if they can be achieved at a cost that is significantly lower than the additional revenue generated. Current booking systems and technology will need significant changes to meet these restaurant demands. The WizButler booking system is the only booking system that can manage a restaurant’s space at the moment - however, space management could very well become the restaurant booking approach of the future.
Restaurants will also have to start looking at opportunities for autonomous automation. Through this concept, booking systems will become completely blended with ordering systems so it becomes impossible to know where the booking system stops and the ordering system starts. The concept of having booking systems integrated with ordering systems, then integrated with a POS system is "old" thinking. The new phenomenon is having a completely "blended" restaurant system that is completely autonomous, catering for traditional restaurants with traditional standards of service. It is such blended systems that will offer the cost reductions and savings that restaurants will need to be able to redefine their operations and handle the current and future trade winds. Currently, the only "blended" restaurant system in the marketplace is the WizButler restaurant system.
Our parting word to restaurateurs is: success is not what you did yesterday, but what you are doing today and tomorrow to handle change and stay ahead of your competition, while better meeting customer requirements. So be flexible in your thinking and do not be afraid to try new things. The only sure way for your business to fail is to do nothing.
Peter Petroulas is the founder of WizButler, the only restaurant system that autonomously and dynamically maximises online bookings.