The economic downturn has been tough on many restaurant chains, but even as the economy continues to improve, owners are finding that further steps are needed to enhance profitability and ensure continued success. Keeping struggling locations afloat and turning them into contributing units within a system are key aspects to strong, long-term financial performance. 

In the highly competitive restaurant industry, the “new normal” approach to optimizing occupancy costs combines renegotiating more favorable lease terms with remodeling locations to boost revenue. When done correctly, these strategies can be beneficial for landlord and tenant alike. In fact, a joint approach between the restaurant operator and the property owner minimizes risk and expense for both parties, while increasing return on investment for all involved.

Observe the refrigerated and freezer section of any supermarket or grocery store that still has open cases. What you’ll see is shivering shoppers rushing to the registers, products that appear washed out by bad lighting and scuffed, dirty cases that accumulate dirt and repel buyers. It is a universal phenomenon.

“I shop at two stores, one is close to home and has open cases and the other is 15 minutes away, but they have new closed cases,” says Kristin Manning of Charleston, S.C. “I try to avoid the one closest to home because the store just looks run-down, plus the cold cases are all open, so the store always feels like a meat locker. In fact, we call it ‘the meat locker.’

Gluten-free is becoming the latest trend in food consumption, even among those who can tolerate gluten. One-third of U.S. adults reported by January that they want to cut down or be free of gluten in their diets, according to The NPD Group’s Dieting Monitor. This is the highest percentage making this claim since the NPD Group began asking the question in 2009. 

We know people are still watching television. We know people are consuming food-related media in social networks. And we know they’re especially active in social networks while watching television. This convergence can mean big opportunities for brands if they know where to look.

Before we dive into the opportunities, let’s discuss our target and learn more about what they’re doing.

Recipe Revolution

The Hartman Group’s 2012 report Clicks and Cravings: The Impact of Social Technology on Food Culture provides strategic insight into how social media has transformed the “lifecycle of a meal.” In the past, recipes and meal choices were influenced by Mom’s old recipe box, family traditions and cookbooks, and we consumed our meals together, around the table. Today’s home cooks, whatever their skill levels, seem to be driven into the kitchen by multiple social channels, mobile apps, restaurant reviews that are detailed enough to celebrate specific meals, television programs, bloggers and the recommendations found within their own personal networks.

If you follow industry and consumer trends at all, you know there is renewed interest in wellness. “Wellness” carries a number of definitions, depending on who one asks, but at its core is the desire to live a more healthful life, with various levels of exercise, nutrition and even sustainability as part of the mix.

A less apparent but important trend is one of retailers – food retailers in particular – working to connect more effectively with shoppers. Price has taken on a lower priority, partly due to changing economics, and partly due to the price dominance of Walmart and Amazon. Price-only shoppers know where to go; all others are looking for value but with more than just the over-used and under-delivered “low prices” claim.

A friend of mine lives in a nice neighborhood where a lot of doctors live, and he takes walks. One day, one of the doctor-neighbors stopped him and blurted out, “Y’know, I, well, it’s just that … ” Basically, all the doctors in the neighborhood had noticed that my friend had a condition that to the trained eye meant he should seek treatment.

Most of us didn’t see anything wrong, but the experts did. Do you ever wonder what the self-appointed doctors of social media would say about you?

The 2013 Sweets and Snacks Expo May 21 to 23 at Chicago’s McCormick Place continues to expand its status as a global resource for products, innovations and insights. Companies from 23 countries have secured booths or pavilions on the show’s floor.

More than 570 confectionery, cookie and snack companies are expected to participate in the expo sponsored by the National Confectioners Association (NCA). “NCA recognizes the power of U.S. brands around the world and the expo serves as a destination for global markets to come together,” Larry Graham, president of NCA, said in a statement. “The 2013 expo is the ideal venue to connect with industry professionals from around the world and to discover international products and trends that will set retailers apart from the rest.”

Large deals typically involve international operations, which are where a deal can stumble if the M&A team is not mindful of local jurisdictions.

With the recent acquisition of the Skippy® peanut butter line by Hormel Foods Corp. and the announcement that Berkshire Hathaway Inc. and 3G Capital Inc. will acquire H.J. Heinz Co., analysts are predicting the beginning of a wave of mergers for the food and drink industry, particularly staple food companies. Almost all of the mega-deals being announced in the food and drink industry have some international operations, and buyers and sellers should analyze applicable merger control rules and develop a plan for addressing any such issues early in the transaction. Merger control rules, which regulate transactions based on their effect on business competition, vary by jurisdiction and can delay a transaction unless the parties follow all necessary steps to gain regulatory approval in each applicable jurisdiction.

Beginning in 2014, a nondeductible excise tax will be assessed on restaurant industry employers — those with 50 or more full-time and full-time-equivalent employees — who do not offer healthcare coverage to their full-time employees. A requirement of the Patient Protection and Affordable Care Act (PPACA or Affordable Care Act), the tax is significant — amounting to $2,000 per year, per full-time employee. The number of full-time employees is reduced by 30 for purposes of the calculation.

The regulations require coverage to be offered to 95 percent or more of full-time employees, using complex rules that define exactly who is and who is not a full-time employee. A restaurant industry employer who slips below the 95 percent threshold will be assessed the full tax – even if the employer offers coverage to many full-time employees.

The excise tax exposure is significant, as the table illustrates.

Like any retail business, a restaurant or grocer’s image is expressed in more ways than design and graphics. The right blend of music helps reinforce the image you have worked so hard to create.

Customized, curated music is a huge current trend that is helping retailers differentiate themselves from their competitors. Music no longer takes a background role but has become just as important as the actual merchandise itself. That is why it has to reflect the brand perfectly.

Now that the trials and tribulations of the holiday selling season are over but still fresh in your mind, you still have plenty of time to research, vet, test and implement improvements to your retail environment. Many options are available for each type of improvement and its unique architecture and implementation.

Although that may seem daunting, what it really means is that with open, interoperable systems, you have the ability to create the architecture for the improvements that will work in your environment most effectively. Several types of security equipment can be used to determine which areas of your store need improvement. The following top analytics can drive your sales for 2013.

Beware! The article you are about to read is content marketing.

So, you might ask yourself, what exactly is “content marketing,” anyway? Well, it’s about creating content that resonates with your consumer so that she or he elects to share that information with others. The goal is to get your brand positive recognition by attracting and building an audience. You want to deliver information to your consumer that entertains or informs but does not feel like a sales pitch.

Showrooming. RedLaser. Amazon Price Check. Same-day shipping. These terms and names have come seemingly out of nowhere and now top of the list of things that worry retailers. The entry of Walmart into grocery turned the retail food industry upside-down, but now Walmart is feeling the same pain as Amazon continues to make inroads on price with an expanded selection.

Operating a brick-and-mortar retail food store isn’t what it used to be. Shoppers are now armed with price information, deeper knowledge of products and the ability to find out just about anything about a product while standing in front of the shelf – including who might be selling it cheaper.

Groupon’s in trouble.

CNBC named Groupon CEO Andrew Mason “the worst CEO of 2012” and called him “an expensive joke for those who bought in early on the stock.”

I typed into the Google search bar, “Groupon is” to see how it would complete the sentence. “Groupon issues,” “Groupon is dead,” “Groupon is bad,” “Groupon is it safe” and “Groupon is stupid.” That’s what Google offered as suggestions to complete my search.


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