In news this week, a new report finds that C-Suite Execs are no longer caught off guard by tightening labor markets; and the NPD Group forecasts that restaurants will turn to a variety of tactics to win over diners as traffic is anticipated to remain constant.
Report Finds Tightening Labor Market Is Not A Surprise To C-Suite Execs
C-suite executives are demonstrating less concern over the tightening labor market than they have in the past, according to a new report from research firm Jefferies. The report found that labor tightness was most evident in the hotel, restaurant, and leisure industries, though it found increased turnover and entire states that experience “labor markets so tight that businesses’ ability to expand has been impaired,” according to The Nation’s Restaurant News.
Yet, while the labor market is showing greater challenges, the analysis also saw that such tightness mentions were actually down year over year. For example, Jefferies analysts found 109 of the companies they cover cited wages as an issue in Q3 2016 compared to just 79 in the same period this year.
According to the analysts, “It’s certainly not that wages are falling, but rather it seems that rising wages are no longer surprising as many companies as they once did.” They also have seen “a decline in the use of terms suggestive of wage tightness/headwinds on conference calls” when comparing data year over year, and they noted that trends in restaurants are on the upswing. The report also noted that companies appear to have begun planning for higher wage growth, scheduling labor better, and investing in labor-saving technology, “all of which reduced the tendency for labor to be the source of a negative surprise.”
NPD Group Forecasts Convenience And Value Will Be Primary Drivers To Lure Customers In 2018
The NPD Group has forecast little or no traffic growth for restaurants in 2018, but says that convenience and value will be the primary drivers to lure customers into locations for the new year. As customers become more strapped for time, spend more time ordering digitally, and eating more meals in the comfort of their own home all while demanding excellent customer service, the NPD Group says restaurants will respond accordingly. Among the trends they anticipate are more value-priced menu offerings, increased limited time offers to entice diners, and an upswing in loyalty programs to encourage customer visits. Focusing on what consumers want is the way foodservice marketers can better align their strategies to maximize their relevance for the future.
NPD highlights the changing environment for customers, asserting that consumer demand for convenience is growing exponentially as they look for ways to make getting meals on the table easier. Text messaging and mobile app-based ordering have both gained traction in 2017, too, but restaurant operators need to assess where to invest their technology dollars to entice customers. And NPD notes, nearly 50 percent of dinners purchased from restaurants are eating at home, with many in-home meals constituting a combination of dishes prepared there and ready-to-eat meals purchased from a food service outlet. This blend means that operators need to focus on ways to make it easier to bring home food and beverages.
“Engaging customers remains the key to every operator’s success,” says NPD Restaurant Industry Analyst Bonnie Riggs. “In this challenging environment there are many examples of major chains, micro chains, and independents that thrive because they give consumers a great experience, superior food quality, and excellence in service. In other words, they give people a reason to visit. These fundamentals are necessary for success across every industry segment – today and beyond.”