Devil's Masterful Deception: The Cunning Stratagem He's Known For
Satisfying Stalwarts and Seeking Solutions!
Hey, peeps!
First, let's give a holler to the weekend! Hope everyone's having a whirlwind week.
As usual, I've been mulling it over, contemplating the challenges our hospitality comrades are facing, you know, the usual Dueces & Catches (a guaranteed winner at the pub quiz, if you ask me).
You may have noticed that my humble abode is adorned with multiple electronic peepers (for transparency's sake, I've currently got 5 phone screens) - 'n'at ain't got much to do with Wall Street daydreams or Cosmo Kramer's fast and loose lifestyle. I'm just a visual whiz kid, wanting endless scenes to keep my projects hustling and hitting the targets.
Now, speaking of targets - my Agent Kujan moment's been stirring lately. Any familiar with the 1995 thriller, 'The Usual Suspects'? It's Chaz Palminteri's badass character we're talking about, ya know, the one that keeps the plot twisting until the very end.
Well, ol' Kujan's got his world turned upside down when he realizes that something he overlooked right in front of him could have shaken things up from the start.
Similarly, the hospitality industry's been dancing waltzes with Labor and Supply-Side issues - don't you just looove old-school terminology? I live for it, okay? Anyway, more than 80% of operators admitted to fighting higher food and labor costs last year, with an avg. increase of 10% and 9%, respectively, according to research by our stalwart friends at POS goddesses, R365.
Despite relentless efforts by creative and tenacious hospitality workers, profit margins continue to face the relentless squeeze. The shining beacon of light in these troubled times? You guessed it - Guest Engagement (it's been Branded's top dip on the sundae for two scoops). Carrying on, we have witness to a tech explosion, with scores of software solutions doing all kinds of fancy R&D in the FOH. Yet, it leaves me wondering if we're heading for a crowded market square of kings with no clear victors.
The would-be soothsayers would point to the easing inflation winds - ol' 82% of respondents now forecasting prices to go up next year, with only 61% eyeing that prospect.
As we sail onward to 2024, a single challenge sticks out like a sore thumb, shouting from the rooftops - "Employee Experience & Retention!" BY GAWGE! (For the uninitiated, that's Brooklyn vernacular for "by good gods, indeed!"). In the upcoming year, this is seated as the top priority for the industry, taking a sizable 38% of the poll - with sales volume trailing at 24% and labor costs landing at 18%, according to the survey.
Now, let's dial things down to a more affable Mr. Danny Meyer vibe. He believes in putting your employees first ('cause hey, who doesn't wanna make their employees happy?) and so, evidently, do hospitality industry leaders. To confront our challenges, operators are utilizing Guest Engagement tech (for, what else: digital marketing, feedback platforms, and loyalty programs), BOH technology (long-nurtured stepchild of its FOH sibling), and investing in Business Intelligence & Analytics, Workforce Checklists, and spruced-up Accounting solutions.
I reckon it's high time we put the ol' workers first, just like Mr. Meyer. Employee turnover is the Asps of the industry, pouncing on the largest chunk of operators' labor costs (15-20%, ya hear that?), and it's venomous for their time, effort, and wallets. Luke Fryer, CEO of Harri, kicks it into gear with his piece, "Hidden in Plain Sight: The Solution to Surging Labor Costs." He reminds us that a preventative approach can knock turnover down.
Among sources particular triumphs of late is Chipotle's targeted benefits rollout, aiming to steer Gen Z employees through the murky waters of debt. According to insider stats, over 73% of Chipotle's employees fall into the Gen Z generational demographic. These Gen Z'ers wave the highest debt burden of any generation and the swiftest-growing credit card debt, making 'em prime candidates for these advantages.
Digging in a bit deeper, Chipotle's previous initiatives have aimed to improve recruitment and retention, such as offering employee referral bonuses and streamlining their educational assistance and mental wellness programs. It's estimated that over 26k team members have been promoted from crew roles to leadership positions in 2023, with an impressive 90% of these leaders starting as entry-level crew members - the company's wistful ode to the teacher-student bond.
With the 2024 Burrito Season looming, Chipotle's warm-hearted push has earned roses from all quarters, as it emphasizes the importance of employee engagement.
Don't get the wrong idea - employee focus is nothing new. However, our industry standouts could benefit from a well-placed reminder that, even going through a technological revolution, we still need employees to be our foundation. Despite its cliché status, we will not forget the wisdom that "the guest is NOT always right."
With that, I extend shout-outs to R365, for their insightful survey, and the opportunity to join them on their NYC leg of the Restaurant Transformation Tour 2024. Keep an eye out for the Branded team, we'll be there.
In conclusion, my fellow word-wielders, my brainstorming time has been "Best in Suite" as opposed to "Best in Class." It's all about integrating customized solutions for operators in our tech stack (looking at you, Chowly). I posted about Chowly's Targetable acquisition, and I'm bullish about significant tech M&A activity this year.
As 2024 unfolds, let us stand united behind the message that employee engagement must remain front and center for our industry to thrive.
Now, for our enthusiastic readers seeking a deeper dive into Branded's strategies and folx, please feel free to join the Access Hospitality Network.
That's all, folks! See you next time, and, as always, remember, it takes a village.
Jimmy FrischlingBranded Hospitality [email protected] Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures - "Branded" - is an investment and advisory platform at the intersection of food service, technology, innovation, and capital. As experienced hospitality owners and operators, Branded offers value to its portfolio companies through investment, strategic counsel, and deep industry expertise and connections. Learn more about Branded here: Branded At-A-Glance February 2024
- Hospitality industry leaders are focusing on employee engagement to confront challenges like Labor and Supply-Side issues, with 38% prioritizing Employee Experience & Retention.
- Operators are utilizing Guest Engagement technology, Business Intelligence & Analytics, Workforce Checklists, and Accounting solutions to improve matters.
- Chipotle, a leading restaurant chain, is taking employee focus to new heights with targeted benefits rollouts and improvements in recruitment and retention.
- Chipotle's initiatives, such as employee referral bonuses and streamlined educational assistance and mental wellness programs, have shown positive results, with over 26k team members promoted to leadership positions in 2023.
- With Employee Experience & Retention as a top priority, the hospitality industry stands to benefit from a well-placed reminder that, despite technological advancements, employees remain the foundation of a successful business.
- Branded Hospitality Ventures, an investment and advisory platform at the intersection of food service, technology, innovation, and capital, offers value to its portfolio companies through investment, strategic counsel, and deep industry expertise and connections.
