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Top Challenges for Restaurants in 2020- Part 1

February 25, 2020

Restaurant owners face many challenges in 2020, some new, some old. By understanding common challenges, owners may be able to develop unique strategies to increase their chances of success.

Restaurant owners…are you prepared for 2020? Staying ahead of operational challenges can be tough, but we are here to help. Here’s what you should expect this year.

Top challenges

  1. Labor shortage- The restaurant turnover rate is at a post-recession high of 75%, with many restaurant owners struggling to maintain adequate staff. This has forced many businesses to hold on to undependable staff, and many have had to overschedule interviews to fill the minimum number of roles needed.

    How can restaurants address this challenge?

    Focusing on retention has helped many restaurants deal with this setback. New training methods focus on thorough cross-training (teaching workers multiple job functions so they can fill other roles when needed). Many restaurants are also putting an emphasis on company mission and values, and solid management team structures. Some have experimented with offering health benefits or computer subsidization (ensuring that everyone has appropriate equipment to effectively perform their duties).

  2. Adjusting to rising minimum wages across the country- Starting in 2020, nearly half of the U.S. is implementing higher minimum wages. This means business owners need to focus on optimizing labor costs, one of the largest operational expenses for restaurants.

    How can restaurants address this challenge?

    Restaurant operators have been turning to restaurant operations tools to optimize labor hiring and training costs. This includes perhaps integrating a POS (point of sale) system with an accounting and scheduling platform, or creating centralized mobile apps for more efficient scheduling.

  3. Inventory management- Managing accurate inventory is certainly not a new challenge for restaurant owners, but remains an issue as businesses struggle to manage a large number of moving pieces and keep ingredient costs within budget.

    How can restaurants address this challenge?

    Many restaurant owners are turning to inventory management software to tackle this challenge. This software covers the inventory process from start to finish, from counting and transferring to ordering and invoicing. Through the software you can:
    • Order precisely
    • Track actual vs. theoretical food costs
    • Run real time inventory reports
    • Automatically convert stock count to a journal entry
  4. Responding to shifting guest preferences and expectations- Customer preferences are always changing, so this remains a challenge for restaurants in 2020. Customers expect restaurants to be conscious of diet restrictions, allergies, sensitivities and many customers expect health conscious, sustainable and farm-to-table options.

    How can restaurants address this challenge?

    Restaurants in 2020 need to be prepared to be flexible when it comes to menu updates. While management teams need to pay attention to food and labor costs, they also need to keep one eye on customer taste trends and revise menus accordingly.

  5. Adjusting to increasing food costs- Since there is a higher emphasis on quality, farm-to-table ingredients nowadays, restaurant owners must address fluctuating food costs as a result.

    How can restaurants address this challenge?

    It’s wise to continuously track recipe costing, map out ingredient cost, usage and yield to understand how successful certain menu items are and if there are changes that need to be made. It’s also helpful to track food waste trend reports, production stats and recipe cost by location to help identify inconsistencies.

Making an effort to proactively address these challenges will allow your restaurant to thrive in 2020 and beyond. Stay tuned for part two of this blog series where we address other challenges including: keeping up with mobile trends, adjusting menu prices and more.

Questions? Contact our Hospitality Team.

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