A sluggish economy and skittish consumer spending means operators will continue to keep tight reins on their own spending in the New Year. What is worthy of investment and what’s on the chopping block? Restaurant Business asked eight operators where they expect to see money going out—and staying in—in 2014. Funding social media and other technology remains important; so is watching traditional expenses, such as food and labor costs.
Bennigan’s, Dallas
Investing in: Social media, community outreach
Reeling in: Tabletop technology
Two new corporate positions at the almost 90-unit casual-dining chain will be a cost for 2014, says president and CEO Paul Mangiamele. A brand manager and a brand coordinator will work together to handle all social media for the chain. “It’s about continuous connection, 25/8,” Mangiamele says.
Another expense will be brand ambassadors for each store. These people are responsible for in-person neighborhood marketing. “[They] go out and develop relationships, handing out coupons and food and talking to people,” says Mangiamele. This is the key to hospitality, he adds.
Bennigan’s will be saving money by not implementing tabletop payment technology. Instead, servers will continue to ask for and collect customers’ payment in traditional ways. Mangiamele believes that otherwise the brand is losing a chance to interact with guests. “It negatively impacts the integrity of a brand, when you substitute technology for service.”
MOOYAH, Plano, Texas
Reeling in: Travel expenses
“We’re looking to reduce the expenses related to travel,” says Alexis Barnett Gillette, director of marketing at the 50-unit burger chain. “We’ll use conference calls, webinars and Skype, which allow us to accomplish the same objectives from afar. That’s a great cost-saving measure.”
Sometimes there is no substitute for face-to-face time though, she says. Demonstrating a new cooking procedure, for example, probably requires a person traveling to different stores. But simpler practices, such as teaching employees how to upsell, can be done digitally.
The Raymond, Pasadena, Calif.
Investing in: New menu items
Reeling in: Food costs
The Raymond, a “casual fine-dining” restaurant in the Los Angeles area will continue to revamp its menu to offer more small plates and cut labor and food costs.
“This means you can incorporate similar ingredients into more than one dish so you’re only prepping three or four menu items instead of 15,” says Brady Weise, The Raymond’s head bartender.
“It’s about working smarter. It’s a meaner, leaner, approach and it brings more diversity to the menu, because there are more of the small plates than there were large ones,” he says.
Fifth Group, Atlanta
Investing in: HR technology
Operator of seven restaurants (including South City Kitchen and Ecco) and a catering company, Fifth Group plans to buy hiring software in order to cut the costs of hiring and training. “We want to be more efficient, and by analyzing data we can spend less time in the office and more time taking care of our guests and employees,” says partner Robby Kukler.
The new software “manages the flow of a candidate electronically from helping us place the ads until they are filling out new-hire paperwork,” he says.
Nick’s Pizza & Pub, Crystal Lake and Elgin, Ill.
Investing in: Social media
Reeling in: Advertising costs
“We’re looking to do less advertising and more social media to really engage people to keep our brand awareness high,” says Nick Sarillo, owner of this two-unit concept in the northwest suburbs of Chicago. “The ROI is higher and there’s not a big dollar investment, though we do have one employee dedicated to it.”
On social networks, Sarillo will run contests, share community information such as details on local fundraisers or sporting events, and ask questions. “It’s important to have more question marks than exclamation points,” he says.
“We involve our whole team, so this is more organic and authentic [than advertising]. Our guests are heavy Facebook users, and when they have an emotional connection to a brand, they are happy to share any news and fun events going on. So we get to be in front of a lot of people, which is a really important part of the ROI.”
Quaker Steak and Lube, Sharon, Pa.
Reeling in: One-off costs
Quaker Steak and Lube plans to optimize its buying power to keep food costs down across its 60-plus units in 2014. Instead of buying two different bacon specs, for example, it will switch to one. It also plans to combine some contracts to increase volumes for cost reductions.
“We’ve also rejiggered our menu and looked at the one-off items and whether they were really supporting themselves,” says Katie Malanik, senior director of food and beverage. “Are they paying the rent for their space? So, one-off items that are low sales we’ve reduced.”
Sizzler, Mission Viejo, Calif.
Investing in: Design, technology
Sizzler will continue spending money to update its restaurants and, along with increased sales, it’s seeing employee morale rise. Not only do staff enjoy working in refreshed restaurants, but they’re involved in the remodel plans, “making them part of the process,” says CEO Kerry Kramp.
The 153-unit chain is also planning to install new high-resolution digital menu boards, which Kramp says will be a better merchandising vehicle. “We can adapt the menu to day parts, and items we want to highlight,” he says. “The digital boards allow us to do a much better job of responding to suggestions guests made on how to best communicate our food and beverages.”
Taco John’s, Cheyenne, Wyo.
Reeling in: Transportation costs
“I think the area of savings is going to be in the logistics of moving goods in the supply chain,” says Vice President of Supply Chain, Dean Satchwell. “So we’re consolidating suppliers and loads and some redistribution points to move [full] truck loads. Even in equipment, we’re looking to pull it all together and make one shipment to a store.”
Satchwell also is trying to rid No.10 cans from the chain’s more than 400 restaurants since they’re heavy and big. “If you put pouch packaging in, it equates to savings in the long haul. It also reduces waste, you get more yield and it’s more environmentally friendly.”
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