Why is the Restaurant Industry Lagging?

Restaurants are struggling to convince customers to spend their hard-earned dollars at their restaurants. According to Technomic, the Top 500 restaurant market is in a recession with negligible growth and almost a full percentage point decrease at full-service chains. Why is this?

There are a lot of variables to consider in the restaurant industry. Bloomberg explains that many national chains are anxious about delays in tax returns and the potential to lessen consumer spending by $21 billion. Customer preferences also are shifting in the food industry. Many chain restaurants have raised their prices without improving their quality or offering anything new, which has led many millennials and Generation Zers to opt for local and independent restaurants instead. In addition, the younger generations are looking for healthier, organic and environmentally friendly choices. Technomic speculates that if fast food and chain restaurants continue to only provide fried and fattening foods, they will struggle to grow in the future.

The food service industry needs to adapt to new trends and customer preferences, or their sales will continue to lag.

Repair or Replace: When to Buy New Equipment

Food service equipment is like a car. It makes sense to buy used and repair broken parts, until it doesn’t. Director of training for the Commercial Food Equipment Service Association (CFESA) tells Foodservice Equipment & Supplies (FES), “At some point, you can no longer keep up with the repairs.” Plus, it’s hard to resist buying new equipment that has the latest technology and features. So how do you know when it’s time to replace your equipment instead of repairing it?

  • Safety: Not only do you need to keep your employees and customers safe, but damaged equipment could cause much larger problems in your business, such as starting a fire. If it’s not easy to fix or involves multiple parts, you should replace the entire piece of equipment and not take any risks.
  • Cost: Like the car analogy, sometimes it’s more cost-efficient to replace equipment instead of continuously repairing it. KaTom explains that if it’s going to cost you a good chunk of money to repair the item (don’t forget to include labor costs), it’s probably a sign that you should replace the equipment for something brand new.
  • Overhead: If you need to change your overhead costs, you may need to look at your purchasing patterns. According to FES, restaurant chains are 20 percent more likely to change their equipment purchasing patterns as a result of labor costs, food costs and safety issues than their non-commercial counterparts.

There aren’t any hard and fast rules for when it’s time to replace your equipment instead of repairing it. You need to look at your costs and how it affects the rest of your operations, and then make the best decision for your business.

Can Supply Chain Management Reduce Food Waste?

The short answer to this question is yes. The real question should be how. Companies, governments and charities have been hard at work to reduce food waste in every part of the supply chain, from harvest to sale.

A great example of this is RMIT University in Australia that looked at how packaging affects food waste. They studied ways to use packaging to reduce food waste, such as improving ventilation and temperature control while food is in transit or sitting on store shelves. In addition, the packaging itself should be made from reusable materials, so it is not contributing to the waste problem.

Some other areas where supply chain managers can reduce food waste is having better forecasts so they don’t overstock their shelves and allow food to spoil, working with local suppliers that cut down on how much food goes bad in transit and using leftover food as fertilizer or donations to charities.

With a little education and optimized systems, supply chain managers can be a first step in reducing food waste and helping companies be more environmentally friendly.