The best of restaurants have somehow faced a decline in their sales at some point in their career lives. There can be a number of reasons that result in declining sales. Panicking and offering extra discounts to increase your restaurant sales might look needy and have a negative impact on the entire restaurant business.
More than 60% of the restaurants fail in their first year of setting up because they don’t have a fixed strategy to fight off extreme situations. Here are some golden rules that you could use when you’re facing a decline in your restaurant sales curve.
What To Do When Your Restaurant Sales Dip
Before getting down to the steps, you need to first identify the potential reasons for your restaurant sales depression. The constantly changing consumer trends have made people wanting to try newer places every day, which is why if you’re not able to retain your customers, it’s going to be a problem.
Other reasons include inconsistency, overhyped prices, lack of recent updates in your menu and a dull social media presence. Most of all, nothing makes you lose a customer more than a bad service at your restaurant. But, even after this happens, the restaurant industry is forever growing, so there must always be some other restaurant where your customers like to go to.
Let’s look at some of the ways to increase your restaurant sales.
i) Improve Your Online Presence
Many a time a restaurant’s inefficient online presence prevents it from reaching to its potential revenue. Customers today have become extremely tech-savvy, which is why you need to have constant updates of events and menu changes on your social media platform to keep the customers engaged.
It is very easy for customers to forget about your brand in this evergrowing field of restaurants and newer brands. Let’s say that you have an Instagram page that is a year old and has older pictures of your outlets. It certainly creates an impact of your brand slowing down, making the customer lose interest in your restaurant. It is essential to post regular updates to stay relevant in the minds of the consumers.
This is why there is a constant need to keep a check on your social media engagement, and the number of followers and then take effective steps to improve it.
ii) Greetings Go A Long Way
According to the NRAI Food and Services Report 2019, 23% of customers like to come back to the same place because of good quality service. Food presentation, quality, taste, and habit are all secondary factors affecting the choice of a particular restaurant.
A simple smile, or kind gestures, while attending the customers, always trying to find out what the customers would like, suggesting them the best sellers and so on are good ways to win your customer’s heart. As a restaurant owner, it is on you to be able to get the restaurant SOP implemented properly.
iii) The Presence Of The Manager Or The Owner On The Same Floor Might Help
Having a manager/owner on the restaurant premises could actually be your way of making the customers feel special and connected to the place. It is generally observed that people like to have a chit-chat with the manager to suggest a few tips or share their experiences.
It almost always leaves a negative impact when the manager is not available to handle customer issues. The more accessible the owner or a manager of the staff is, the better bond you would have with your restaurant.
iv) Track The Footfall At Your Restaurant
The next step to make a come back into the game is identifying where you went wrong. For achieving that, identify your footfall, and look into your restaurant sales sessions. Deep dive into your POS reports to analyze the lean hours of your restaurant. Check the number of tables occupied and then track the sales generated per order.
Another reason why your restaurant sales could be low is that customers may only be ordering low-profit items. In this case, you can try creating combo offers and combine high-profit and popular items to promote sales. You can also train your staff to upsell and cross-sell items to improve profits.
v) Reduce Your Food Costs
The food costing at a restaurant can be understood in two ways. One is the cost spent on food purchases and the cost spent on food sales. Since this is a crucial factor at a restaurant people, we will now look at different approaches to tackle food costings and things revolving around it.
a) Food Cost Percentages: It becomes quite a stressful situation if you’ve tried everything and things still don’t fall in place at your restaurant. While cutting down budgets for everything else to save your restaurant and keep it working, you also must look at your food costs. Your food cost percentage is simply the share of total restaurant sales spent on food products.
Mathematically representing it, the food cost percentage is actually equal to the net food purchases upon the net food sales. Ideally, your food cost should be under 30%.
There are some practices that you can follow to maintain the food cost percentage which include comparing food costs to what is actually sold can provide insight into items that are being over-ordered, poorly rotated, or stolen from the kitchen. You could also use historical data to set goals for the restaurant.
b) Check On Your Menu: Along with food costings, menu engineering is another factor that could have hampered with your restaurant sales in the first place. You need to look into your menu, and not just the layout but also what helps your customers choose a particular dish. Track the performance of your menu items to identify which items are being the most ordered, and which items are not being ordered. You can consider removing the poor performing items from the menu to bring down the food costs.
vi) Identify Restaurant Frauds, If Any
More than 90% of the restaurants fail to prosper their businesses as there are a lot of thefts and frauds that are difficult to track. It is almost impossible to keep track of these fraudulent tasks without the involvement of technology.
If you notice low restaurant sales despite everything being in place, it may mean that some misappropriation is happening at your restaurant. You can control internal pilferage at your restaurant by using a smart restaurant POS that categorizes each transaction on the basis of risks. In case of a high-risk transaction, you will be notified instantly, enabling you to take corrective actions in time.
vii) Take Note Of The Minute Things
As the old proverb goes, When you take care of the little things, the big things fall into place. It rightly fits while analyzing the potential reasons for the dip in your restaurant sales. Everything from the entrance of your restaurant to the tables of your restaurant till the time the customer leaves your restaurant is essential to make a successful sale.
A successful sale is one where the customer is absolutely satisfied and is willing to come back to your place. Ensuring this would mean taking care of all the little things at your restaurant. Let’s look at them one by one.
a) The Entrance Of Your Restaurant: Since the customers make the first impression of your restaurant just by looking at the entrance, you need to ensure that you spend enough time making it visible enough. The entrance of your restaurant needs to be aesthetic and spacial, ensuring that people don’t crowd at the gate itself.
b) Check For Your Parking lot: The next step is to look for the parking lot, and that there are enough lanes for people to park their cars. Even if you don’t have that big a space for parking, make sure that it is well maintained.
c) Check For Your Tables And Seating: A lot of times it’s the little things that affect your restaurant sales, without you even noticing. The tables and seating at your restaurant need to be properly placed and shouldn’t be worn out. You must also make sure that the table waiting time is the least and you have a high table turnover.
d) Improve Your Interiors: Since all your customers have access to a smartphone and have become more aware of the kind of place that they are looking for to eat. It has almost become a trend to check the restaurant’s ambiance virtually before actually going there. You must ensure that your ambiance and interiors give out a vibe matching with the intent of your brand.
Having the right pictures on the internet makes it all the more attractive for new customers. A lot of people also go through customer reviews and testimonials before. Interiors and the vibe of your restaurant makes a huge impact on your sales and profits.
The restaurant industry is a tough one to be in. It is even more difficult to make profits from it for a couple of its initial years, in lieu of high rental costings. The challenge of constantly being able to generate higher profits might be daunting. But using these golden rules, or at least some of them that are applicable to you might save you loads of money.