By now we’re nearly two weeks into 2014 — a year that by all accounts will bring mixed sales results for the restaurant industry and plenty of challenges.
Both the operators who spoke to us in our NRN Restaurant Operator Survey and the projections from market research firm Technomic point to a sales increase this year. But concern over consumer spending and challenges like health care and the growing push for higher wages are leading to expectations of slower unit growth and little job creation. While it’s a new year, it is most likely to bring more of the same.
But I’m wagering that 2014 will be a year to remember. This year will be looked back upon as the year that a number of issues impacting the restaurant industry — the way health care is rolled out, the battles for increased minimum wages — came to a head. It’s no surprise, then, that operators who took our survey pegged those two topics as the No. 1 and No. 2 concerns, respectively, affecting their businesses.
The minimum wage protests and rallies will not go away in 2014, the attention from legislatures will not wane, and the media glare will not darken. The restaurant industry is a target, plain and simple, and it should make some new year’s resolutions to help shrink that bullseye.
Trim the fat. Stop using political rhetoric or corporate financial arguments to counter the simple stories minimum wage protesters use. The arguments that these protests are paid for by union organizers or that higher wages mean tighter margins and less profit won’t overtake the simple message of “We can’t survive on $7.25.” Make arguments easy to understand and defendable from a “regular Joe” point of view.
Build relationships. Too many franchisors deflect questions on wages and health care by saying employee pay and benefits are determined by independent franchise operators. While technically true, regular Joe wants to hear how McDonald’s — the global brand making billions of dollars — is addressing wages and health care, not what Century Management Inc. (the largest McDonald’s franchisee) is doing. Work together to tell a unified story.
Become more active. The restaurant industry will employ more than 13 million people and will generate more than $700 billion in sales in 2014. It also is the first to help when tragedy strikes and has changed countless lives — whether through a dish-room-to-boardroom career, or the generous funds raised for numerous causes and donated to those in need. Tell those stories, and tell them often.
Keep an open mind. Higher wages and increased health care costs will absolutely change the cost of doing business. But companies that handle these hurdles with grace and ingenuity will benefit as they attract better employees and win public favor. Look to NRN’s 2013 Operator of the Year, Ray Blanchette of Ignite Restaurants. He’s not trying to cut corners: “Think about the single mom that works for us, and this is her opportunity to get health insurance. … Think about the first generation immigrant that is working in our kitchen, that now has the opportunity to provide health insurance to his family. Find a way to afford it.”
Here’s hoping these resolutions don’t go the way of the canceled gym memberships or busted commitments we’re all familiar with. There’s nothing like a new year to begin to change.