This is part of Nation’s Restaurant News' special coverage of the 2017 MUFSO conference, taking place Oct. 1-3 at the Hyatt Regency at Reunion Tower in Dallas. Follow coverage of the event on NRN.com and tweet with us using #MUFSO. Stay connected on the go by downloading the MUFSO app.
Nation’s Restaurant News’ annual MUFSO conference celebrated the industry’s top performers, while giving up-and-coming companies the tips and tools they need to be, perhaps, tomorrow’s top performers.
Attendees learned a lot during the three-day event in Dallas. But here are five big lessons we picked out from this year’s event.
1. The business is evolving.
On Monday, Shake Shack Inc. announced that it is testing a kiosk-only location in New York in a bid to reduce the length of its lines and improve service.
That same day, Shake Shack CEO Randy Garutti said that he believes the restaurant industry is facing the biggest shift since the creation of the drive-thru. He said consumers are more than happy to pay for additional convenience.
Randy Garutti, CEO, Shake Shack Inc.
Restaurants, in fact, are working to adapt their concepts to this new reality. Companies such as Salsaritas are looking at locations based on delivery, while others, such as Saladworks, are shrinking the size of their locations to focus more on to-go orders.
Of course, there are also tried-and-true strategies: Salsaritas has also opened a location with a drive-thru and noted it boosted sales by 30 percent.
2. The restaurant business is really hard.
Sure, you could be some famous person who appears on television every day, and you could even have superior food from local sources in a fast-casual environment. But they won’t guarantee you success — as “The Chew’s” Carla Hall said during her keynote speech on Monday.
“Everyone assumed the first restaurant’s success was a foregone conclusion,” she said. “It wasn’t.”
It takes a lot more than just good branding and good food for it to work. The location has to fit. There needs to be a strong employee culture. And it helps not to have your restaurant shut down for a month just two months after it opened because of an electrical fire — which is what happened to Hall’s Brooklyn restaurant.
The lesson is that this industry is really hard, especially now, and that even people with seemingly numerous advantages can stumble.
3. Lease costs are going up.
Numerous speakers and people in the hallways noted during the conference that it’s just a lot more challenging to get good sites.
Growth demands among rapidly growing fast casual chains have intensified competition for sites, especially in urban markets where many of these concepts want to be located.
One of the biggest reasons Saladworks is working on a smaller size is because of lease costs — smaller locations are cheaper, after all.
Companies are also working harder with brokers and technology firms to analyze those sites, especially as weak industry same-store sales can make the business riskier.
John Hedrick, CEO of Pei Wei Asian Kitchen Inc.
4. Culture matters.
The CEOs who won Golden Chain awards this year all talked about the importance of their employee culture and its role in their success.
Culture can help companies retain workers, which can give them an edge in an industry in which turnover is 110 percent—higher, for instance, than slaughterhouses, according to Sullivision.com founder Jim Sullivan.
In some cases, companies are integrating technology to improve their culture and their relations with workers.
J. Hedrick, CEO of Pei Wei — one of the Nation’s Restaurant News’ Consumer Picks winners — noted that his company has a Pei Wei Cares app specifically for its employees.
“You learn that people matter a whole lot more than whether you throw a dish away because you made it wrong,” said Norman Award winner and Denny’s CEO John Miller. “Have a culture of care that looks after people.”
5. The industry faces a lot of challenges.
Restaurant operators came into MUFSO amid a two-year decline in industry same-store sales and traffic. Challenges that have led to those declines don’t appear to be waning.
Lower grocery store prices and an oversupply of restaurants — and other competitors, like the Amazon-owned Whole Foods — are also making the business more competitive.
NRN contributor Jim Sullivan
Consumers have a “passive loyalty,” Sullivan said, meaning that chains failing to deliver on quality and value and convenience will lose customers.
Oh, and labor costs are going up. “The $15 wage is not a question of if,” Sullivan said, “but when.”
Contact Jonathan Maze at [email protected]
Follow him on Twitter at @jonathanmaze
The MUFSO Premier sponsor is The Coca Cola Company
Presenting sponsors are: Blount Fine Foods, The Coca Cola Company, UNiDAYS
Kitchen Hero Cook-Off is presented by Texas Pete/TW Garner Food Company
The Hot Concepts Reception is sponsored by Rock & Brews
The Industry Awards Gala is sponsored by Tyson Foods, Daiya Foods, Natural brands
Pillar sponsors are: Alchemy Systems, Bloom Intelligence, Boylan Bottling, Cardlytics, Mainstreet, Inc., Nudge Rewards, S&D Coffee, Smithfield Farmland Foodservice, Sweet Street, Weston Foods, Zenput
The MUFSO app sponsor is Steritech
Refreshment breaks are sponsored by Blount Fine Foods, Boylan Bottling, Royal Cup Coffee, Smithfield Farmland Foodservice, Sweet Street, Ventura Foods, and Weston Foods
The Supplier Exchange Luncheon is sponsored by Hale & Hearty, Bruce Cost Ginger Ale and Copper Moon Coffee
The Lanyard & Welcome package is sponsored by Hospitality Mints
MUFSO Breakfast sponsors are Moore’s Food Resources, Community Coffee and Natural Brands
VIP Dinner sponsored by Moment Feed, Pan Pacific Plastics and Rotella’s Bakery
The official music sponsor is Rockbot