Restaurant Industry Changes To Face In 2016


As we ring in 2016, there are some big restaurant industry changes we’re facing. Restaurants must prepare to face these changes in the year ahead to mitigate disruption to business operations, reduce costs and maximize customer satisfaction.

There is good news on the horizon, as industry analysts point to a strong outlook for restaurants relative to the US economy for 2016. The bad news is the restaurant business isn’t getting any easier. Restaurants, which already operate on razor-thin margins, now face rising wages and commodity costs, increasing government regulations, and additional security and safety concerns.

Operators should focus on the following four items to move their business forward in 2016:

The Pressure of Rising Wages, High Employee Turnover and the Reduction in the Labor Force will require operators to think strategically about their HR in relation to their overall operation. The economic shift from the customer to the employer to cover a living wage – increasing minimum wages and a move away from a tipping model – compels operators to reduce employee turnover and hold on to their best employees. We have discussed the cost of turnover before, but now more than ever restaurants cannot be a revolving door of hourly staff. The cost to onboard a new employee is too high and constant turnover can make it hard to maintain your desired level of product and service quality. Additionally, as the economy continues to recover, there are, and will continue to be, fewer qualified, skilled candidates to fill critical positions.

Technology can and should be leveraged in all aspects of your restaurant from enhancing the customer experience, to managing products and staff, and even monitoring food and beverage storage and usage. The right investment in technology can help you be more flexible and nimble, which in turn allows you to manage what impacts your bottom line in a timely fashion. The right technology can enable you to change menus sooner to combat rising costs, launch and track promotions, and ensure that your reservation interface is in-line with what your customers want. Operationally, new technologies can improve scheduling to reduce labor costs, and increase table turnover to increase sales. Administratively, new technologies can help small businesses with their bookkeeping, payroll and sales tax processing. Lastly, you must stay compliant in all Federal, State and local technology regulations that keep your customers’ personal and payment information safe from data breaches – which can be a costly mistake.

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Caring For and Knowing Your Customer Is Crucial for Your Restaurant’s Survival. According to a recent report by Morgan Stanley, Millennial’s’ dining habits are drastically different their parents’. Millennial’s eat out more often, view “Healthy” foods differently (they don’t count calories as previous generations), demand food from ethical sources, do not want traditional “Fast Food” and prefer Fast Casual Concepts. Millennial spending habits are expected to peak in the next 3-5 years to become one of the largest growing restaurant demographics in the United States. You must know who your customer is to be able to provide them what they want, to reach them in your marketing and keep them engaged.

In light of what we discussed above – the challenges in the changing labor market, maintaining razor thin margins, trying to keep up with technology – Consistency must become your central goal. As we discussed in Consistency Is King, “Customers should not have to spin the roulette wheel each time they visit your restaurant; they should experience the same quality of food and service every time.” When things go wrong, the first instinct is to completely change your operation. However, as discussed in Restaurants Know Thyself, staying the course and perfecting your operations will dampen down the volatility of the challenges faced.

Modification and flexibility are critical for restaurants to survive in this day and age. However, adapting to the times does not necessarily mean an overhaul of your entire concept. An overreaction to big changes can often be an over correction!

Don’t know where to begin? Do you know how to adapt to industry changes in a timely manner so you can be as profitable as possible? can develop customized operational guidelines to meet your needs. Email Noelle at

Noelle Ifshin has over 20 years of experience in the restaurant and hospitality industry. She has been instrumental in growing several companies, utilizing many different concepts, and was a successful revenue management leader with a national harbor cruise company, which operates in several markets across the Eastern US. Prior to founding 4Q Consulting, LLC, Noelle has functioned in an array of roles for various organizations ranging from front and back of house, single unit management, and multi-unit director, as well as company-wide profit management duties. Her diverse experience includes Executive Chef Positions, Food and Beverage management, catering, large event management, renovations, and new build outs.