On the restaurant rollercoaster? Discover 5 ways technology eases the ride

More than 4,000 new restaurants have opened in the UK in just the last four years – yet there’s also been a huge downside, with many – including some big names – closing down.

So in these most mixed of times, how do you make sure YOUR restaurant is one of the survivors?

Let’s start by pinpointing some of the reasons for 2018’s restaurant rollercoaster ride.

Brexit blues

The pound has been in state of flux ever since the Brexit vote, and it’s had serious repercussions for the industry because the cost of basic ingredients has risen in costs.

Margins have also been squeezed by other factors, such as the minimum wage rising by more than 19% in the last five years.

One high-profile victim has been Jamie Oliver, who cited the Brexit blues when he was forced to close six of his restaurants in 2017, and 12 more this year.

The repercussions of Brexit are not just being felt on the foreign exchanges. The EU represents a pool of talented hospitality workers which UK restaurants have relied on.

Three million people work in the hospitality sector in the UK, of which over 750,000 are EU nationals. A staggering 75% of serving staff are from the EU, according to a report from KPMG.

Many have already left, and with the Government slow to introduce necessary training for British-born staff, not effective until 2022, a labour shortage is imminent. No chef = no restaurant.

The perils of private equity

Private equity has long dominated the restaurant and bar sector, with deals hitting a record high in 2016.

This influx of money came at a time when there was still uncertainty over Brexit. The taste for investment in the sector has stalled and this has also been coupled with over-ambitious restaurant chains expanding too quickly.

So the market is over-saturated. With so many choices, consumers have possibly got bored with the casual chains.

In addition, online ordering apps such as Deliveroo and Just Eat offer an attractive alternative and have taken a large share of consumers’ discretionary spend. They also deny restaurant clients the opportunity to upsell high margin items such as drinks.

Many famous private-equity backed chains have had to apply swingeing cuts. Some are even talking of closing 100+ sites.

It’s not just a few outliers pulling the sector down. According to research by accountancy group UHY Hacker Young, 35 of the UK’s Top 100 restaurant groups are now loss-making.

Again, they cite falling consumer confidence and higher staff costs as well rising business rates as being to blame.

You can rise above it

It’s tough, we know. But the restaurants that are thriving are those who make the savviest use of restaurant management technology to drive operational and sales performance.

For instance, companies using Aloha restaurant management systems, such as Nando’s, are still reporting increases in both gross profit and revenue.

Technology can transform a business in a number of key areas:

  1. Marketing

Technology makes it simple for restaurateurs to create targeted marketing campaigns and increase footfall – crucial when your customers have so many choices for their discretionary income.

It pays to be creative. One innovative marketing initiative from Nando’s is their Music Exchange which they have used to keep themselves top of mind while capitalising on their place in pop culture.

Obviously, not everyone has the marketing budget of a Nando’s or the patronage of Ed Sheeran or Stormzy…

However, on a smaller scale it is possible to pivot your restaurant to, say, becoming a focal point for local live bands on a traditionally quiet night of the week.

Using cloud-based EPOS it is easy to capture diners’ data to use in email promotions. The system can also post your events and promotions to social media – easily amplifying your exposure.

  1. Loyalty programmes

Once you get the customers coming in, you want to keep them coming back for more. It’s all about creating long-term clients as opposed to short-term sales – after all, it costs the same to generate both, and you need to get the best return on your marketing investment.

A good restaurant management solution includes features that offer multiple ways to reward repeat custom:

  • > Gift card credit
  • > Real-time rewards
  • > Item-based rewards
  • > Points-based rewards

 

Good restaurant technology makes this easy to administer and for restaurant groups these loyalty schemes can be applied across all sites at the touch of a button.

  1. Social media marketing

While email marketing has its place, increasingly we find our clients are relying on social media to get the word out. Millennials in particularly live their lives through a prism of Instagram likes and followers.

A restaurant’s reputation can live or die on the nature of its online reviews.

With technology it’s now possible to promote your business while also monitoring your online reputation, sending out social campaigns at a national or site level.

A good mobile solution further enables restaurateurs to monitor social media feedback in real-time and respond quickly before any reputational harm is done.

  1. Theft prevention

You can be knocking it out of the park with your social media, email marketing and loyalty programmes but it you need to make sure that you keep your eye on the ball with your margins.

Unpalatable as it may be to admit, light-fingered staff can sometimes hit your bottom line through theft and scams.

With fraud detection software you can spot patterns of suspicious behaviour – in real-time.  Once staff know they have nowhere to hide they are far more likely to act honestly.

  1. Labour control

Labour is one of the highest costs for any restaurant operator – but luckily, it’s a variable cost that can be kept under control with technology.

It’s a fine balancing act – having enough staff at busy times to ensure optimum guest satisfaction while ensuring that you are not overstaffed at other times or paying unnecessary overtime.

With restaurant technology it’s possible to forecast what labour is required, create rotas at the touch of a button and slash unplanned overtime with full integration to payroll.

Research firm Gartner suggests that by 2020, customers will manage 85% of their engagement with a restaurant without interacting with any of the staff in human form.

While for some this may seem a little dystopian, it would certainly save money on staffing while speeding service.

But for now…

In the meantime, using technology is the best way to maximise revenue and increase efficiency of your human staff.

Our new video shows you how:

https://www.youtube.com/watch?v=mbHiGnsKJMQ

Luis De Souza
Luis De Souza Chief Executive Officer Posted on: September 14, 2018
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