Path to Higher Profitability: How Restaurant Tech is Sparking Recovery

Many restaurants are starting to see a light at the end of the tunnel when it comes to pandemic recovery. Warmer weather, increased vaccinations and loosening restrictions have restaurants hopeful that business may be returning to normal.

Although business may be picking up, the National Restaurant Association said in its annual report that an average of 86 percent of restaurant operators are still reporting lower profit margins than their pre-COVID operations. These trailing effects of the COVID-19 pandemic will be felt by restaurants for years to come, and regaining and maintaining healthy margins is going to be a critical piece of long-term recovery.

Technology certainly played a major role in helping many restaurants survive over the last year. Delivery, touchless payment, online ordering and more helped restaurants pivot to a new world where off-premises dining ruled the day.

Now, as guests return to dining in, different technologies are critical to helping restaurants achieve a faster, more stable recovery. This will happen through optimizations in day-to-day tasks, helping support burnt out staff and continuing to serve evolving customer preferences.

Getting a Handle on Food Costs

For the last year, you may simply have been in survival mode, with no capacity to look beyond what the next few weeks might bring. This is understandable, especially with the fluctuations operators faced with spikes in pricing for meat and cleaning supplies, as well as inconsistent supplies of some inventory items.

However, now that inventory has stabilized, it’s time for you to review and optimize your inventory and purchasing. Re-evaluate your par levels, make sure your supplier relationships are strong, and consider investing in purchasing and inventory management tools.

Antiquated software or manual processes for tracking inventory make it difficult to truly track what your food costs look like. An increasing number of operators are turning to more sophisticated inventory and purchasing systems that can integrate with their POS to give real-time theoretical inventory levels, low inventory alerts, digital count sheets, supplier reconciliation and other tools that cut down food costs.

This also supports employees by making inventory tasks less burdensome. This will become increasingly important in the pandemic recovery phase as many employees are burnt out or have left the industry. Competition for labor is on the rise again and anything that makes their jobs easier while reducing food costs is a win-win.

Making Labor Management Convenient

Another way to reduce your prime costs and recover profitability is by turning to modern labor management tools. You will see competition for labor start increasing again, and, with that, your labor costs will begin creeping up as well. You will have to fight turnover of employees looking for positions that fit their lives better, as well as the potential for mismatched scheduling when trying to predict sales as more diners return.

Effective labor management software can harness your data to forecast sales and write an optimized schedule based off the forecasts. This reduces the time your general manager spends writing schedules and cuts down on costly mistakes like accidentally scheduling overtime, violating labor laws for minors, or overscheduling during slow periods.

This will also help with employee retention by making it easier for them to define and change their schedules. With the scheduling app on their phones, employees can manage their schedule the same way they do everything else. It makes setting availability, swapping shifts, and requesting PTO a simple process, and any tool that reduces friction with employees will then reduce turnover rates.

Catering to Customers with Online Ordering

Online ordering and payment was something many operators added or upgraded when it became clear that COVID-19 was going to be around for more than a few weeks. Off-premises dining has been a growing trend for several years, and the pandemic accelerated how quickly customers and operators both adopted it.

Because off-premises was already on the rise, we can expect it to still be higher than pre-pandemic levels, even as more customers return to dining in. This means you can’t shortchange your online ordering and payment capabilities.

If you threw online ordering together just to get through the pandemic, it’s time to flesh it out or update your system to something that will work long term. You can’t afford to ignore what is a growing desire from customers for more digital options.

Recovering from the disruption and devastation that COVID-19 had on the restaurant industry will be a process, but you can make it smoother and easier by continuing the adoption of modern restaurant technologies. Augment your team’s capabilities with software designed to optimize and streamline daily tasks. Keeping your prime costs under control will go a long way toward rebuilding your profitability and ensuring your restaurant can weather future crises.