The Slow Death of the Restaurant

There is a storm coming whether you want to admit it or not. It's not going to be good for a lot of budding restaurateurs who think that the lure of fame and fortune await them in the restaurant business.

In 2016, for example, there were 620,807 restaurants across the country, down 1.6 percent compared with a year ago. That’s the largest decrease since 1998. That decline amounts to about 9,998 restaurant closures year over year, and most of them were independent restaurants. The overall count included 221,810 full-service independent restaurants in fall 2016, marking a decline of 3.7 percent year over year for that segment specifically. That translates to a loss of 9,784 independent restaurants.

For smart operators that have their act together this is a perfect opportunity to rise above as an economic survival of the fittest will see the closure of more restaurants in the next two years than ever before. The restaurant bubble is about to burst and you'll want to make sure your brand is ready for the storm. Only the strong will survive.

So how did we get here? What brought about this dilution of the industry?

Well, there are a few reasons and here they are: 

No Experience Needed

Gotta Checkbook? Then you can open a restaurant. There are few industries that have basically no qualifications for entry quite like the restaurant business. Anyone can open a restaurant with nothing more than a bankroll. Opening a restaurant is not the hard part. Making a profit is the challenge.

The problem is that while some might have a brilliant idea for a concept, they never set themselves up for long term success. You need systems and a solid business strategy to make it in the uber competitive market today. Having good food and good service is the standard...everyone expects good. Even fast food concepts provide "good". That's the problem. Those chains have actually lowered the threshold on what the modern guest expects. We have become desensitized to what "good" really is anymore.

Good enough is not very good today. It's average. Being average is a recipe for failure. Okay, let's be honest here...being average sucks. Even if you make enough to break even or by chance make a profit one or two months, your business will never thrive. It's like most restaurants are in a coma and the only reason no one pulls the plug is that they still cling to hope. Hope is not a strategy for running a restaurant. 

Outdated Management 

The way most run their restaurant today is very similar to how they have been run for the last 20 years. Sure, we might have new technology that allows use to schedule online, cool programs that let use order food without calling a sales rep, and even amazing POS systems that can tell us who our top guests are and how much they spend on average. However, we still treat people the same way.

We have technology, yet we talk down to the team instead of to the team. We order online and get upset that our vendor stopped "servicing" our account. We know more about our guests than ever before, yet we don't engage with them.

We use carrots and sticks to keep our team in line. We use management techniques and theories that really need to be taken out back and buried. The workforce has evolved and we as an industry have not. We fail to learn and update ourselves to deal with the millennials and the disruptive Gen Z. We are captains of a ship that has mutinied and left us talking to ourselves. We have lost touch with the people who work with us and blame them for the pain we experience. You'll need to do better if you want to retain talent.

The Cult of Celebrity Chefs

The last 15 years has seen a rise and worship of the TV chef. Now some celebrity chefs actually are great chefs and business leaders. Think about when The Food Network first came out. What did they focus on? Cooking. Much like MTV (who once actually played music videos), the Food Network became obsessed with rating and trying to capture a bigger piece of the viewership. Along the way, they needed bigger and edgier shows. Before you knew it the reality cooking show was born and with it came visions of grandeur for young culinary sponges looking to be the next star chef.

The younger generation does not see the years seasoned pro had to endure to rise to the top. Not that there is a lot of room at the top...hence why it is called "the top". This new generation has lost touch with the "reality" of the industry because much of their view has been tainted by reality TV. Gordon Ramsey yells and calls people a "donkey" and that is what they think chefs do. Can chefs be ball busters? Yes. Can they also be compassionate mentors? Yes.

The best things this younger generation can do is less watching of TV and more reading a book or two. We need to coach more and hold people accountable. The number one thing you can do is to raise your standards and do not compromise them! It's common for owners today to give in out of fear. They are afraid to lose people by holding them accountable. This the worst thing you can do as an owner. It's your business. If the people you have on your team will not comply to your standards, then it's your duty as an owner to replace them. Holding onto average performers on your team just makes you average. You know how I feel about being average. 

Bad Press 

You see we've alienated the younger generation into wanting to join our industry. The stories of horror are rampant: long hours, drug & alcohol addiction, and no social life fill the internet. We need a paradigm shift if we want to attract young talent to our business. If we fail, then the machines will rise up and take over more and more jobs performed by humans (it's already started) until we become less a hospitality business and more a food transaction one. We are not far away from being large vending machines for food as substance. Forget the dining experience we are known for. If we don't turn things around we are approaching warp speed for an industry meltdown.

How can you do your part? Share the positive side of the industry. Stop posting about your food and specials and post about the human side. Show your team having fun. Show your guests having fun. Show yourself having fun.

Now there are a bunch of memes floating around the internet that poke fun at the business and really just perpetuate the deep troubles that plague our industry. Front-of-the-house versus back-of-the-house. Granted being a chef I find them funny too. However, if I share them am I helping the industry or just keeping the negative energy and feeling alive? You can be funny and still not put down people. That's being creative and not being mean. Being mean is easy. Easy is not the way to build the bridge to future generations looking to make our business their business.

Many people love to talk about the war FOR talent. Actually, what we have is a war WITH talent. We think it's us against them. It's not. It's us against the other industries vying to capture our workforce to work for them. What do we need to do as an industry to attract the younger generation? Stop the negative mindset and press that is fueling the fire of how bad it is to work in a restaurant.

There is a storm coming.

Are you and your restaurant ready for it?

Will you survive?

Only you really know that answer. If you are hesitant and have doubts, then this would be a good time to find a mentor or business coach to help you prepare.

Just do something to make sure you're ready. You can sit back, keep doing the same things, and hope you'll get through the fallout. Then again, you know my feelings about relying on hope. If you refuse to take action and make a choice, a choice will be made for you. Whatever you decide, be sure you are ready for the outcome.