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Happy hour isn’t, so, well…happy anymore

Q: I’m unsure of what is happening to my business as overall guest traffic seems normal, while sales are down and product and labor cost it up. Are others having the same issues?

Many restaurateurs are having a difficult time pinpointing post-recession business issues. For example, during pre-recession times, happy hour business accounted for only 12% of evening sales at a large, upscale casual restaurant. During this post-recession period, however, that number has risen to 20%, indicating that more diners are ordering the bargain options instead of those profit-driving items from the dinner menu.

The culprit is a shift in the guest’s choice to dine more at happy hour and less at dinner. Happy hour is impacting many restaurants and turning perfectly good dinner guests into “blue plate special” chasers. Gallup research shows a shift in consumer behavior regarding restaurants. In the casual restaurant sector, 46% of Americans say they’re spending less than they were a year ago, and 35% say their spending less than they were a year ago, and 35% say their spending changes are permanent. In the featured example, happy hour sales shifted pre-recession from 12% to 20% post-recession of overall sales. The guest has been drifting in earlier to take advantage of less expensive pricing resulting in reduced sales margins and guest check average.

The restaurant’s “purpose” for happy hour was really because “everyone else is doing it.” There was no real plan or strategy for happy hour. The menu was simply a discounted version of the existing menu. Happy hour is a part of the business and should be treated more as a marketing opportunity than a sales generator. Most restaurants offer happy hour without consideration for what the program will do to the rest of the business. They build small plates that take as much or more time to prepare than regular plates, and the kitchen is stuck producing more food for less money. Labor skyrockets, forcing pressure on the front of the house to reduce labor where the guest is being served. As a result, the guest experience suffers. Missed opportunities fly right by. Drinks don’t get filled as rapidly, tickets don’t get closed out in a timely manner, the story of the restaurant isn’t told and guest satisfaction suffers. This eventually will destroy a restaurant.

To reverse the trend here are some actions the featured restaurant took:

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Increase sales by ensuring quality

Q: In visiting with my guests I receive information that sometimes drives me crazy. I hear our food can be inconsistent coming you too the kitchen. once day an item is terrific and the next it’s just so-so. What can be done to improve our consistency?

One of the common techniques used by some of the best companies is to routinely test the kitchen staff on the quality of the food coming out of the kitchen. You should test your food every day and have your staff give input. Different cooks cook differently. That’s not a good thing for consistency. The critical execution factor is to prepare the menu item exactly how you want it to go to the guest and then train the kitchen to produce it perfectly and the service staff to serve it promptly. What good is a great plate of food if it can’t come out of the kitchen perfectly or make it to the guest quickly? Set the expectation that anything less than perfect cannot be served to a guest. Don’t let consistency slide or you will be granting silent approval and letting the staff know consistency is not all that important. Schedule formal reviews of menu items following a format called FATT. Every recipe should be written and available for training and have the FATT criteria listed of Flavor, Appearance, Temperature, and Texture. Call your staff together daily to review at least one menu item for:

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