Now hear this, 2017 is coming and there is a lot of uncertainty accompanying it. Between a new executive administration in our government and market conditions we can’t control, 2017 looks to be no different than 2016 in its challenges and opportunities. Indulge us as we offer you our predictions about what will matter to you in the coming year.
You will engage in one new third-party software service to improve your business.
It’s hard to believe this won’t be true for every restaurant in the country by the end of next year. Sure, there have been some stalwart holdouts who still run on pen & paper, but they too, will have to admit the pervasive availability of time-savings tools is hard to resist.
Whether it’s a simple online scheduling program for internal use or a guest facing technology like waitlist management, these cloud-based tools have proven ROI. They also make life easier. Can you continue to ignore the value of solid inventory control or significant data reporting? Maybe, but your competitors are converting and learning how to fine tune their businesses with these intelligent software.
It will be business as usual under the Trump Administration.
It happened on November 8th, Donald J. Trump was elected as the 45th President of the United States. No matter your political views, it’s time to stop worrying about what his administration will do and start worrying about what you will do to improve your business in 2017.
While you know that a Trump-led government will likely make the conditions less regulated and more favorable for our industry, you can’t be sure you will feel any real affect from his policies in 2107.
Things take time to get done in Washington and while the overtime rules change and minimum wage issues are important, they aren’t so onerous as to dramatically change your restaurant next year. That means it’s up to you to find the ways to grow and plan for how to accomplish that enterprise. If you are waiting for a presidential effect, you won’t feel it until 2018.
Labor costs will continue to climb, but now food prices will follow.
While much has been made of the Fight for $15 and its potential impact on our industry, the irony is it won’t likely mean much to your business in 2017. Almost every place that is exploring an increased minimum wage is doing so in a phased approach.
That means that it may reach $15/hour, but certainly not in 2017 unless you are in a municipality that has special rules. In fact, results from places like San Francisco and Seattle, have shown that the impact has been insignificant. Truth is, labor is so tight in most markets that the minimum wage is hardly a consideration.
However, a recent Fed rate hike and OPEC trying to limit production to increase fuel costs are a real threat to your bottom line. Unfortunately, there isn’t much you can do but wait and see if crude prices jump. Given that we have seen historic lows, it’s highly likely they will. That will have multiple effects including consumer disposable income, transportation costs, and processing expenses for the food you buy. Look for increases here over the next year.
You won’t get overrun by any menu/beverage trends you didn’t see coming.
When’s the last time you remember and explosive brand or cocktail combination? You know, one that actually transforms the way we serve guests. We’re talking Jägermeister or the cultural phenomenon that was the Cosmopolitan. Sure Fireball has been hot, but mostly the business has changed to a different structure.
Whereas before everyone followed the trend, now we have better defined style sets. The industry has organically segmented to a variety of categories. Go back even 25 years ago and you will not see the diversity of restaurant styles that now pervade our culture and economy.
With tastes of consumer being more skewed to this specificity, you won’t see much of change anytime soon. Likely, we might get further definition and even micro-styles (think fast food separating into QSR and fast casual); same outcome but different service experiences. So, if you are doing well, stay the course and double down while you’re still relevant.
Sales trends will continue to be flat industry wide.
Even though 2016 started off with real promise, the restaurant industry is limping into the New Year. The folks at Technomic released their projections for the industry and then promptly adjusted them -- down.
Technomic is on to something here. Between advancing competitors like grocery stores and prepared food delivery services like Blue Apron, the competitive landscape has never been more challenging. Couple this with the incredible expansion of fast casual and you can see the assault on full-service dining has a full head of steam.
Closings by chain operators like Ruby Tuesday’s point to a market with too much inventory. Location still matters, but after that you must remain competitive amidst a barrage of challenges. That’s why you really should find efficiencies where you can in the new year. Add delivery, change the way you seat guests and use data to drive your decisions are a few examples. It doesn’t matter what you do to start, just start. To remain competitive in the future, your business will depend on it.
Millennials will stay atop the news cycle.
Are you weary of the storyline that says, “Millennials will…blah, blah, blah?”
We are, but it’s not changing next year. Analysts project that the largest transfer of wealth in world history will come to pass as Baby Boomers exit this mortal coil. This will leave Millennials as the top generation in terms of buying power and consumer influence. If you have eschewed the idea of attracting Millennials to your business until now, 2017 will demonstrate the risk you take by ignoring them.
Whether you are employing them or serving millennials, the way they expect to interact with you is different than their parents. The sooner you embrace that reality the more competitive you will remain in 2017.
What do you think? What are your restaurant industry predictions for 2017?