By David Scott Peters
Building lunch sales is key to greater profitability in restaurants. This is because most of the costs associated with preparing for the dinner rush happen during the daytime.
Think about it: You are paying rent and utilities whether you are generating sales during the day or not. There are labor costs in the kitchen to get all the prep done to have a successful dinner shift. If you could generate enough sales to at least cover all the daytime expenses, the next daypart can become a real profit centre. Basically, the busier you make your lunch business, the sooner you start making money.
What can you do in your restaurant to drive the largest share of the lunch business your way? Here’s a four-pronged approach to increasing your lunch sales:
You must understand who your lunchtime customers are. Are they business people who only have one hour for lunch, which means you must get them in and out of your restaurant within 30 minutes because of travel time? Are they wealthy housewives who want to be pampered and are looking for a longer, more social dining experience? Are they Millennials who are on a limited budget and looking for speed in a social environment?
This may be the most important piece to the puzzle of increasing your lunchtime sales. It will help drive your next decisions.
There are four things to consider when looking to create or change your menu to increase lunch sales: Speed, price, portions and dietary restrictions.
- Speed is essential in most cases. Most companies give their employees only an hour for lunch, giving you only 30 minutes to get them in and out of your restaurant. Those in the Millennial generation are also looking for speed, which is why they are flocking to fast casual restaurant concepts. If your restaurant generally has ticket times longer than 10 minutes, you may want to consider a special lunch menu built on speed.
- Pricing is important. While minimum wages are going up all over Canada and the United States, costs are rising with them. This means diners are brown-bagging it more and more. This is not only reducing the number of times they dine out for lunch, it means they are making more and more dining choices that will extend their budgets. The addition of value driven lunch items has become more important, depending again on who your demographics are. When creating lower priced, higher value items for a lunch menu, you MUST remember you need to make money on these items and keep the cash contribution high.
- Smaller portions are becoming key to increased sales for two major reasons. 1) While our core customers still look at dining out as an excuse to splurge, more and more people are counting their calories. Just look at their phones. Many are using apps on their phones such MyFitnessPal to log their meals. 2) Studies are showing that Millennials are changing their eating patterns from three meals a day to five or six small meals/snacking, so they are looking for smaller portions. The crazy thing is many customers who are looking for smaller portions may never tell you; they will just stop showing up.
- Dietary restrictions are more prevalent with today’s diners. Remember some years ago when many restaurants said this gluten-free thing is a fad and will go away like the rest of them? Well, I’ve got news for you. It has turned out to be more than a fad. In fact, the list of dietary restrictions is growing larger. Today’s diners are looking for gluten-free, nut-free, low-carb, no-carb, vegetarian, etc., options because of health concerns. If you plan on adding items/labeling items to take care of these customers, make sure you understand the difference between a dietary need and an allergy. One could make a customer sick or inconvenienced, while the other could kill them. There are resources such as allertrain.com or foodallergycanada.ca where you can find information and training.
As restaurant operators, if we want to make price less important and want to set ourselves apart from the increasing numbers of restaurants in our markets competing for the same lunchtime dollars, we MUST deliver “WOW customer service.” Customer service guru, John Dejulius, in his book Secret Service, says that “with WOW customer service you make price irrelevant.” Let’s remember one very important fact: as a restaurant you are not competing as a food business. If you were, you would be competing with a gas station. They sell food. Restaurants are in the hospitality business. You create memories! Great service is critical to building sales. Period. I don’t care how good your food is, if your service sucks, your customers will find somewhere else to spend their dining dollars. Make selection and training of your team a priority.
You need more butts in seats! Here are some of the most effective ways your marketing efforts can payoff in driving lunchtime business: Your menu, online ordering and delivery.
- Your menu is the most important marketing piece you have in your restaurant. You must understand who your customers are before you can make changes to your menu to maximize its effectiveness. It’s critical to building sales. When making changes, you must consider menu design, price, speed, portions, dietary restrictions, profitability and cash contribution. You can’t just pick ideas out of the air and hope they work. There is a real science behind changing your menu. To ensure you not only increase sales, but increase profits, it requires completed recipe costing cards so you know the food cost and cash contribution of each item. It’s only with recipe costing cards completed that you can get the most out of engineering your menu to get your desired results.
- Online ordering has become a normal thing to many of our current and potential customers because of the convenience and speed factors. Online ordering allows the person who only has a limited time to eat lunch to speed up the whole dining process. Considering that smart phones have overtaken computers for web browsing, it also translates to a change in customers dining behaviors. Customers are ordering online at a rapid pace.
- Then there is delivery. More and more, the Millennial generation, working families and singles are relying on delivery of restaurant meals. Delivery is a great way of filling seats in your restaurant that don’t exist! There are a few very important things to think about before you start promoting delivery in your restaurant. Two important considerations are what items on your menu travel well and do you have the right containers for delivery? If your food shows up at a person’s home or office and it has degraded greatly, they will get the impression your restaurant sucks. For example, you place a beautiful medium rare burger with hand cut fries in a Styrofoam container. By the time it is delivered and consumed, the burger is more like well done and the bun and fries are soggy because the heat from the fries created a rain forest in the closed container.
With the advent of delivery services like Uber Eats, Grub Hub and many local services, customers aren’t thinking twice about using delivery services to have their favorite restaurant meals in their own office or home. In fact, in talking with several delivery pros, Millennials are ordering from multiple restaurants to feed themselves and/or guests. While you must really consider jumping into this trend, it is incredibly important to remember you must make money, too. The cost of many of these services may allow you to increase your sales, but may leave you with no profits at the end. Make sure you know the costs before you sign up.
NOTE: When considering product, containers and profitability, you may want to limit what you are willing to sell as delivery. Your whole menu might not be a good idea.
If you are looking to increase your lunchtime sales and ultimately your profitability, follow this four-step plan. But do understand, while the plan looks easy, it will take work and a commitment of time and financial resources from you and your management team. Start by having a meeting with your team to discuss each point discussed in this article. Create an action plan for each task and person involved. Make sure your plan is put into action and continue to review your plan. If there is one thing you can count on, that is things will change in your market, and you will have to change your menu again.
About the author:
David Scott Peters is a restaurant consultant, event speaker and founder of TheRestaurantExpert.com, a company committed to the success of independent restaurants. TheRestaurantExpert.com offers an exclusive online restaurant management software designed specifically to meet the complete operational needs of independent operators, including holding their managers accountable and running a profitable business. Combined with one-on-one coaching and group workshops, TheRestaurantExpert.com is helping independent restaurants find success in the highly competitive restaurant industry. Learn more about how David can help you at www.TheRestaurantExpert.com.