Restaurant and Food Service Blog

I am sitting here in a Starbucks and have my laptop cranking out a couple of blog entries. Although I have WiFi on my computer, I refuse to purchase the internet connection that they offer here. It seems to me that the company gets it right with everything except their WiFi.

The baristas behind the counter know most of the regular customers by their first name. They all seem very friendly although there are a lot of grumpy faces walking in for their cup of joe. The cases are full of pastries and the espresso machine is cranking away. But what gives about having to pay for the internet?

I don’t mind paying a premium for a good cup of coffee and I have bought into the whole culture. But it seems absolutely insane that the company charges for WiFi when some customers probably already spend a mortgage payment in coffee on a monthly basis.

Just earlier this year, the company announced that in a partnership with AT&T that they were going to start to offer 2 hours of free WiFi to customers who have a Starbucks card. In a couple of blogs and even on the new Starbucks customer forum, many have thought it to be a good step to help the ailing coffee giant. But I think that the company can take it a step further. Or maybe this all points back to the company taking a new approach with Howard Schultz back at the helm.

Just the other day reminded me of this example as my wife and I both work out of the house. As most home base professionals, we need a change of scenery. So we decided to work at Panera Bread for the morning. It gives us a change and we seem to be more productive when we get out every once in a while. When we left the house, our thoughts never crossed about going to Starbucks simply because why pay for the internet connection when I can get it free somewhere else? We ended up getting some breakfast and taking home lunch.

As it turns out, we have started to make it our “date” work day and we are planning to go every Monday AM to get work done. In the long run, Panera will end up with all of our coffee business.  All for giving away something free.

P.S. I posted this when I got home using my own internet!

LOS ANGELES (AdAge.com) — “Howard Schultz insists he’s returning Starbucks to its roots, but he’s doing it with mass-marketing tactics once anathema to the original brand. The company is estimated to have nearly doubled its marketing spending to $100 million, and last week it began an aggressive coupon program unlike anything in its history, raising questions about its turnaround strategy.”As a former Starbucks partner, I am shocked to see that the company is going the route of couponing. During my time at the Siren, it was always about the quality of the product and there was never a reason to have to discount the value of a quality cup of joe. But it looks like a desperation move by Schultz and the gang there.What I find more interesting is My Starbucks website – an interactive blog site where customers can voice their opinions to the company. In a telling statement of the state of the company and its interaction with customers, it looks like customers want something “free” from the company for being loyal to the brand. Seems to make sense. Buy 10 cups and the 11th one is free. Seems like a no brainer. But for so long the company did not have to do these types of tactics.In the end, it seems clear that the companies that can be most nimble and in touch with its consumer base will win the battle.read more | digg story

Restaurants in Europe, the United States and Japan are testing technology to let diners order their food direct from a screen at their table instead of depending on a fellow human being to note their choice — sometimes grumpily or erroneously.This may work for only a limited few concepts where ambiance and personality are of no importance as much as speed of service and availability. I have visited a few places such as Sheetz gas station where they offer many gourmet items off their hot line and you order from a touch screen. It works there, but if I am going to go out with family and friends for a good meal, part of the experience of going out is the theatre that a good waiter can provide. Have a great waiter and you will have the time of your life. Have a terrible one; and you have stories to share with friends and family. Either way, I would rather take my chances with the human being thana boring touch screen computer. I almost always know what I will get that the LED screen of death.  read more | digg story

Last month I delivered my 2008 Predictions for the Restaurant Industry. I want to share that piece with my readers. Please let me know your thoughts.This is the first annual Predictions for the Restaurant Industry presented by Orrick Nepomuceno, CPC. 2008 will prove to be a tough time for the US economy that will have a huge impact on the state of the Restaurant Industry.

1. Sluggish Sales Growth Will Continue For 2008. The restaurant industry overall will see very conservative growth across all segments (casual, quick casual, quick service and fine dining). According to NRA estimations, the industry will see only a 0.9% sales growth for 2008. Although more Americans are spending a higher percentage of their disposable income allocated for food then ever before, most households will be less likely to eat out several times a week. Most likely, they will eat at home and save instead. Even if the President’s economic stimulus package does pass and Americans see a few extra spending dollars, most economists believe that most households are barely making ends meet. Bottom Line: Americans will have more disposable income in their wallets, but will probably consider saving instead of spending.
2. Increased Energy And Wholesale Food Costs Will Have A Negative Effect. With the price fluctuations in crude oil, lower and mid level-income households will feel a tighter pinch on spending disposable income on dining out as they will be inevitably hit hard with increased gasoline prices. Studies have shown a direct correlation to slumping restaurant sales and the increase in gasoline prices. Additionally, 2007 saw a nearly 8% increase in wholesale products. Much of this cost was eventually passed on to the consumer in higher menu prices. Most estimations see wholesale food costs to remain high for 2008 as well. Bottom Line: Households will get a double hit with transportation and dining expenses.
3. Technology Will Continue To Advance Even More Rapidly Than In Previous Years. Companies will look to the Internet for connecting with customers in more ways than before. Traditional print and television mediums will drive consumers to websites for offerings and coupons. Online ordering will become more robust as mobile handheld devices such as the iPhone have web browsing capabilities similar to their desktop versions. Also, a “Facebook” and “MySpace” type of social networking will become more prevalent with company sites where consumers can create online profiles. Bottom Line: The restaurant industry has a long way to go before it catches up with other industries in terms of technology.
4. Recruitment And Retention Will Be Of A Lesser Concern. The restaurant industry has always been a labor-intensive industry with recruitment and retention being typically the biggest concern among most hiring managers. But for 2008, according to NRA predictions, the industry will see a relatively small increase (0.9%) in the employment growth rate. Coupled with a slowing economy, job creation will be less than in 2007. Thus, with less demand for employees in 2008, many hiring authorities may substitute their concern for human resources to other cost cutting measures. Bottom Line: Many operators’ concerns will be moving towards cost reduction in order to stay competitive.
5. Bullish On Coffee Bars. One segment, although relatively small, the Snack & Non-Alcoholic Beverage Bars (Coffee and Dessert bars) will see higher than normal growth compared to other segments. In 2007, coffee bar sales outpaced beyond the rest of the crowd. Bottom Line: Companies will look to find niche segments where there is little or no saturation.
6. Global Cuisine. At a recent conference of Executive Chefs across America, most commented on smaller sized portions and introduction of ingredients from different parts of the world. Ethnic flavors found roots in the US with inspiration from Latin America, the Mediterranean, the Middle East and Southeast Asia. Many chefs also commented on utilizing more local produce, sustainable seafood and grass fed beef and poultry. Bottom Line: American diners are becoming more savvy and demanding more exotic flavors when they go out.
7. Fat Is Not In. Americans are demanding healthier foods as we wage the war on fat. Look for menu offerings at current concepts to reflect this trend, but also expect new totally concepts to emerge and fully embrace a menu offering with healthier choices – a la Seasons 52. With obesity in America on the verge of becoming an epidemic and local municipalities looking to stiff arm the industry into removing trans-fats and other harmful foods, the restaurant industry as a whole needs to get ahead of the curve and take a stand on obesity. Bottom Line: Expect the Federal Government, not local municipalities, to continue campaigns to reduce the consumption of trans-fats.