BUSINESS: Why are Big Banks Pitting Millennials Against Restaurants?
Lately the bailiwick of the big banks in the US is condescending ads that perpetuates the myth that Millennials are their own worst enemy. This is relevant to restaurant operators, because it always appears this moralization targets Millennial spending in our industry. Eat out less. Cook more. Buy less coffee. The problem is two-fold. One, Millennials are just as likely to save and spend as their Gen X and Boomer counterparts. Two, these sorts of ads are encouraging a key consumer group for our industry to stop spending at your restaurants -- and that should just plain piss you off!
DID YOU KNOWS…
PA Sets New OT Rules
Salaried restaurant employees making less than $45,500 annually in Pennsylvania would be entitled to OT pay by 2022, under new rules issued by the state’s Department of Labor & Industry. This is a much bigger threshold than the new federal law being implemented in January 2020, and is nearly double the current state level threshold. PA says this will make an additional 143,000 residents eligible for time-and-a-half pay.
US Retail Dips Unexpectedly
A new release of Census Bureau data shows that monthly U.S. retail sales fell for the first time in seven months in September, dropping by 0.3% points. Analysts worry that the weaknesses in the supply-side of the economy may be seeping into consumer spending. Households last month spent less on building materials, e-commerce, and cars.
2020 NFL Draft TV News
The 2020 NFL Draft will be shown on ESPN, ABC, and the NFL Network. This comes as ESPN attempts to strengthen its frayed relationship with the NFL. Last year, the draft was shown on both ESPN and ABC and got decent ratings. NFL rights are also coming up soon, and it appears that Disney has a desire to get ABC back into the NFL rotation.
WHAT ARE WE FIGHTING FOR? [Song]
Why it matters to you: The Fight for $15 might not be as scary as you think.
After receiving my degree in Economics in 1987, I dove headlong into the restaurant industry, believing I would make my millions selling Chicago-style stuffed pizza to the world. I figured I wouldn’t have to invoke my degree much while turning dough and servicing guests. But, to my mother’s great delight (because it invokes my overpriced education), the tension surrounding an increase in the minimum wage deserves an economic perspective to help operators understand its implications. Let’s start with some facts. In EVERY community/state that has increased their minimum wage, there has been no significant job loss and restaurants, specifically have thrived. Seattle is the best example. Give a listen to economist Ben Zipperer on the podcast Pitchfork Economics and you might actual feel better.
Zipperer’s analysis of the Seattle minimum wage increase affect starkly describes the success the general economy of the region experienced post increase. What ends up happening is lower classes, when presented with more spending money, actually spend it. This spurs the economy through consumption from the bottom up and everyone, including restaurant operators, benefit.
Concurrently, restaurants did raise prices, but it didn’t require huge increases, and the restaurants also saw benefits as well. When staff makes more money, they are more likely to stick around. As long as you run a professional operation and are already treating your staff as if they are valuable, then minimum wage increases are a net good for restaurant operators. This debate isn’t over, but the signs are sure pointing to significant changes in minimum wage -- at least now you know that it might all just work out right.
[Source: Yahoo Finance]
NOT YOUR FATHER’S BEEF ‘O’ BRADY’S
Why it matters to you: What can you learn from a family dining operators about your own business?
If you have ever visited south Florida, you have driven by a Beef ‘O’ Brady’s. The decades-old concept seems to have found it’s footing in a peculiar place, and, frankly, we think they have it just right. Full disclosure, the 150 unit chain along with its sister brand The Brass Tap are subscribers to the SportsTV Guide and The Daily Rail, but I can assure you, it’s their execution on a basic and very relevant strategy that we are highlighting today.
Since their CEO Chris Elliott took over in 2010, they have been remaking the brand and have landed in a very specific lane in the world of full-service restaurants. Elliot claims, “We could beat [other national competitors] in value.” And that is the space they have occupied as other classic value chains like Applebee’s have moved in a different direction. They have also resisted the allure of limited time offers (LTO) and created what they believe is an everyday value for their guests. And the proof is in the results.
The company has reported positive same-store sales in seven of the last eight years at an average of 2%. Year to date, it’s 3.4% -- mixed 1.9% of check and 1.5% traffic. Beef ‘O’ Brady’s has been in the green for 27 of the last 30 months. Please note: unlike the rest of the market, both check and traffic are increasing and that’s the sign of a healthy system. So we aren’t suggesting you all follow their model of promoting value, but if you are already in the value business make it your priority to convey that message. You just might see the same results as this long time industry veteran has demonstrated.
[Source: FSR Magazine]
