The Australian eating out market is dynamic, competitive and continually evolving. It is vital for restaurant leaders to stay abreast of trends and changes in order to stay ahead. Here are a few of the current trends affecting our industry with a few brief tips on how to stay in front.
By Jeremy Ryland
One of the biggest unseen issues is the convergence and casualisation of the market together with growing consumer sophistication. Consumer expectations have increased, brought on by TV programmes like Masterchef, and the general popularity of food in the press. A lot of café food is now of restaurant quality, presented beautifully, with quality ingredients but at a much lower price. The fast-food chains are moving up-market - McDonald's now has a Wagyu burger. At the same time. the fine diners are moving down market – Neil Perry’s Burger Project for example. The growth is in the middle, in the highly competitive “fast casual” dining sector.
Informal dining out, or fine casual, is growing, which is putting pressure on pricing. To succeed restaurants, need to reduce unnecessary costs. Peter Gilmore at the newly renovated Quay has reduced his linen costs by $150 000 a year by removing tablecloths. Reducing waste can be significant. Josh Niland at Saint Peter, reduced his cost of sales by 6% by utilising all of the fish. And using creative ways with cheaper materials is key – including vegetarian and vegan dishes which is another trend growing in popularity.
Meanwhile, the consumer is seeking value and discounts and consumer demographics are changing. According to the Commonwealth Bank, the largest portion of people who dine out on a regular basis are millennials - people under 30 make up almost half of all fast food purchases and a third of restaurants’ trade. This is important as millennials do not drink as much alcohol as other groups and tend toward share plates and hand food. Since they were brought up on brought up on pizza, burgers, sausage rolls and sushi, many have trouble using a knife and fork.
Customers aged 40 to 45 spend the most per month on fast food, potentially because they are purchasing meals for a family, while those aged between 50 and 55 spend the most in restaurants — $184 a month on average. And we also need to cater more for solo diners – 25% of all households in Australia are now single people and this is expected to grow.
But people won’t put up with mediocre and brands that fail to deliver a good experience will fail. The Gault&Millau analysis in 2017 (for the 2018) guide revealed that poor service or lack of hospitality contributes more to a negative review than poor food/menu. Many restaurants with a great menu and food scored poorly due to service issues. Research has shown that 70% of people prefer a cool experience over a cool product and loyalty comes from the experience – not the product.
2018 is all about better experiences. The “experience economy” is beginning to determine brand success. And yet staff quality and training, vital to the guest experience, continues to be a major issue for the hospitality industry.
In a society where we are demanding more service and personal attention – we are getting less!
When expectations are low – when food quality is low and service is limited (for example, in a food court) - guests know that they will have the same experience every time – and they are happy!
But when expectations are high, as in a premium restaurant – it is difficult – and even the smallest of issues can be a big turn off…
· Bill payment
· Poor telephone manners, being hung up on at busy times
· Bread – taken away before it is finished
· Deep bowls you can’t eat out of
· Indifferent service
· Dirty uniforms
Some things are only noticeable when NOT available – air conditioning, coffee, safe food, good service.
In 2017, Gault&Millau reviewed 969 restaurants for the 2018 Restaurant Guide. Of these, only 8 restaurants – that’s 0.8% - engaged with our anonymous reviewers to give them a reason to return.
Finding and keeping good staff is possibly the single biggest issue facing the food service industry at the moment. Hospitality is a people industry. Good staff are your image. And they can make or break a great experience
But good people are hard to find — and keep. There is an overall shortage of qualified chefs. Apprentices have a 37% completion rate and the number of applications has dropped by 20%. The government has changed the 457 visa scheme – removing a pool of talent.
“Service” is not seen as a profession in Australia. It is largely a part-time or “in-between” job. Staff with service skills are elusive and many establishments are hiring inadequate staff – which ultimately hurts their business more. Many staff have a poor work ethic and simply do not turn up. Staff training is lacking, especially in the café/restaurant locations. Restaurants are less likely to provide formal training for staff, other than “on the job”, compared to other operations such as fast-food. Many restaurants fail to invest in their staff and encourage them to stay and work well.
Good positive leadership, good communication and feedback are keys to keeping staff. Many service staff are young millennials – 40% of youth are employed in hospitality, during which time most are going through adolescent development and are very different from adults. Young staff are prone to irrational, moods and insecurity. They expect feedback and they want to be valued. And remember the value of work goes beyond the money – work can be a refuge, a substitute family and a new identity.
We’ll review more trends in future Leaders Newsletters.