Guest Checks Neglected?

By Abigail A. Lorden, Editor-in-Chief | April 08, 2011

 

It’s time to grow revenue, we’re all in agreement about that. The hospitality industry, like most others, spent the better part of two years cutting operational costs. In fact, restaurants responding to the 2009 and 2010 Restaurant Technology Studies rated “increasing efficiency/productivity” as heads-and-shoulders above all other business objectives (including “improving guest service” and “generating revenue”). 
 
The good news is that restaurants now have a much more balanced approach to business objectives. The 2011 Restaurant Technology Study shows “efficiency” slipping by 20 points, though still in the lead. Attendees to last month’s MURTEC reinforced this perspective when they texted their responses to a live audience poll of business objectives. Nearly half (49%) are focusing on bringing guests back in the door in 2011. Just 24% are focusing on efficiency; all good news.
 
But what’s startling is the nominal number of restaurants who are focused on increasing the average dollar value of guest checks. In our live MURTEC poll, just 10% of restaurants chose this as a priority. Data from the 2011 Restaurant Technology Study, however, exposes this as an area that needs attention. Of all the business metrics that the study measures (which also includes same store sales, net profitability, guest counts and gross revenue), average check value has rebounded the least since 2008. Guests are coming back, but they’re not spending as much as they were three years ago. While guests have trained themselves to be more frugal, restaurants have been offering discounts for several years now. It’s time to reassess value menus and determine which recession-era discounts can be discarded.
 
Conventional wisdom teaches us that a bird in the hand is worth two in the bush. It’s certainly important to attract more guests, but don’t neglect opportunities to up-sell to those who are already sitting at your table. After all, once that bird is in your restaurant, you’ve won half the battle.

For more insights from Abby, click here.

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