Nation's Restaurant News Article

8 ways to build full-service sales

By Ron Ruggless

WASHINGTON (Jan. 22, 2010) While full-service restaurant sales aren't expected to rebound as quickly as in other industry segments, the National Restaurant Association offers eight ways that table-service operators can weigh the odds of recovery in their favor and build much-needed sales.

In its "2010 Restaurant Industry Forecast" the NRA expects full-service restaurant sales in 2010 to grow at a lesser pace than the industry as a whole, like it has for years as the segment takes big hits from consumers trading down and quick-service competitors increasing quality offerings.

Full-service sales are expected to total $184.2 billion in 2010, a 1.2 percent increase from 2009, while industry sales are expected to total $580.1 billion, a 2.5 percent jump. Even worse, after accounting for inflation, real full-service segment sales are expected to decline 1.5 percent in 2010. That follows on the heels of a 2009 decline of 6.2 percent.

“One of the primary differences in this past recessionary period compared to historical recessionary periods is that the higher-income households — the prime table-service market — reported substantial decreases in net worth as well as confidence,” said Hudson Riehle, the NRA’s senior vice president of research and knowledge.

Indeed, full-service operators, from lower-priced casual-dining chains to high-end independent operators have bore the brunt of this latest recession. Casual-dining chains have posted the largest same-store sales declines throughout the industry, and high-end independent operations have posted the largest numbers of closures.

Here are eight ways the NRA suggests full-service restaurants can build their business in a flat segment of the industry:

1. Offer value. NRA surveys found operators expected a third of fine-dining customers, 46 percent of family-dining patrons and 40 percent of casual-dining guests to be more value conscious in 2010 vs. 2009. Frequent-dining or loyalty programs are likely to be more popular.

2. Use social media. Among operators not using Facebook, an NRA survey found four of every 10 plan to create a presence in 2010. About a fifth of full-service operators planned to use YouTube or similar video-sharing sites. Users of social sites such as Yelp and Twitter are expected to increase this year.

3. Market via e-mail. Already seven of every 10 fine-dining establishments keep in touch with customers via e-mail, but only half of casual-dining operators and a third of family-dining operations do so. An NRA survey found 41 percent of customers say they try a new restaurant because of e-mailed promotions, and 54 percent learn about restaurants on the Internet.

4. Create events. Restaurants can offer private tastings or events. The NRA found 64 percent of adults surveyed would attend chef’s table dinners and private tastings.

5. Boost off-premise offerings. Nearly three in every 10 adults surveyed by the NRA said take-out food is essential to the way they live, so to-go and catering has sales-growth potential.

6. Market green initiatives. About four in 10 consumers said they were likely to pick a restaurant based on its conservation practices, and about seven in 10 were more likely to choose a restaurant if it featured locally produced ingredients.

7. Tap technology. Online ordering offers room for growth and less than 2 percent of full-service restaurants provide a tableside ordering or payment option.

8. Emphasize health. Half of adults surveyed said table-service restaurants provide easy ways for them to choose portion sizes.