Restaurant Industry Insider 2/13/2011

The Valentine’s Day weekend is hopefully providing a nice boost to everyone’s period two numbers.  It is probably also adding significantly to everyone’s workload.  No need to worry though.  I have you covered on this week’s industry news.  While you have been patiently explaining why you do not have an opening at 7:00 on Monday night for another deuce, I have been scouring the internet for the information you need to know.  Here it is boiled down to just what you need to stay profitable next week when the phones stop ringing off the hook.

Speaking of phones ringing off the hook, for many it is a less frequent occurrence.  That is because many restaurants have started using Open Table for their online reservations.  So many restaurants that they are reporting record profits.  (Bloomberg)   Forbes did a great article this week forecasting their future growth.  (Forbes)

Dine Equity is also reporting an increase in sales this quarter.  The owners of Applebees and IHOP have to be smiling about this report.  (San Fernando Valley Business Journal)

Many others are facing huge increase in the cost of beef, chicken, and other products.  While price increases are coming, the focus is still on running a lean operation.  (

One way restaurants are trying to drive sales is by hiring social media firms.  While this was traditionally outsourced, some companies are bringing this task in house.  (

A group desperately hoping to see their numbers rebound is the Louisiana seafood industry.  They were in Washington recently hoping to win over lawmakers.   (

The seafood industry is not the only group lobbying for legislation to make themselves more profitable.  In Massachusetts, they are lobbying for a tax holiday for diners.  (

In Maine there is a battle going on in the legislature over “service charges.”  This has been the source of lawsuits in many states and a tremendous potential liability to restaurateurs who do not follow the law.  (

In Missouri, the fight is on to remove cost of living adjustments from the minimum wage laws.  (

In Omaha, the industry is waiting on a judge’s ruling to determine the fate of a new tax on restaurants.  (

No matter what the outcome of that ruling is, it will still be gentler than the $46 million judgment leveled against Denny’s for failing to keep their patrons safe.  Security is expensive, but far less expensive than the alternative.  (

I think the biggest story of the week is the sale of Hooters.  As a former employee of the company, I have always had a tremendous deal of respect for the empire built by Herb Brooks.  This was one of the last great privately owned restaurant empires.  It was also a model of vertical and horizontal integration.  They own not only their restaurants, but their primary supplier, distributor, and the company that produced their uniforms and merchandise.  The company rarely got the recognition it deserved, but it is one of the most emulated business models in the industry.  (

Those are the highlights for this week.  I hope you all are comping sales this weekend without comping complaints.  A 5% increase in sales and a 20% increase in complaints is never a good tradeoff.  Take advantage of the influx of new guests and making some new regulars.  Here’s hoping Valentine’s Day weekend is the start of many new relationships for your restaurants.

Tips²: Tips For Improving Your Tips, the new book from the author of The Manager’s Office, teaches the skills of exceptional servers that will increase customer satisfaction and dramatically improve restaurant sales.  This book is more than a server training manual.  It is the secret to teaching your staff to enjoy selling and give your guests the experience that will create raving fans.  To learn more about the book, visit  Use the coupon code “MANAGER” to save 20% at the checkout.

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About David Hayden

David Hayden is a restaurant marketing and training consultant based in Kansas City, MO. He writes a series of 9 blogs collectively known as The Hospitality Formula Network and is the author of "Tips2: Tips For Improving Your Tips" and "Building Your Brand With Facebook"

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