I learned along time ago that if you ask a bad question you get a bad answer. If you ask a better question you get a better answer.

As you are no doubt aware, the world's food supplies are in short supply, oil prices are extremely high and the cost of food is rising day by day.

Most restaurant owners first thoughts are how they can squeeze money out
of their suppliers so they can compete. When things are tight, most restaurant owners actually want to lower their prices.

This is like a race to the bottom of the toilet.

How about asking a better question? How about asking how I can create enough value to demand (and get) 50% higher prices?

In short, a better question is..how can I be remarkable?

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Yes, it's all about scarcity thinking vs. abundant thinking. Danny Meyer, Union Square Restaurant Group in NYC, sought for ways to provide better value and worked on his Local Store Marketing to great effect following 9/11. Check out his book: Setting the Table for the detailed story from this brilliant restarateur; or read the "Matt's Notes" I compiled that summarizes the book--available for download in PDF format on the Book Club Group pages.

Hey Matt...where is the book club group???
That's a good question, and what is your answer Russ?
Sure, why not. (I am frustrated on a search for a sexy chef for Florida and just diddling around).

Better question? Uhh uh. Every restaurant owner goes out of the box with all guns blazing in an attempt to be remarkable. I don't think there's a superlative to "remarkable" - remarkabler? I think the better question is "How the Sam Hill am I going to get through this with my shirt on?" This is assuming you aren't a San Francisco restaurant infiltrated by lovely Europeans buying out the City on a Fire Sale, in which case you just sit back and thank your deity of choice, possible with a live sacrifice (lobsters work well).

Y'all are in a zero sum game. The restaurant algorithm requires that income equal or exceed outlay. So if you live in a place like..oh, let's just San Francisco for fun..where secondary staffing costs are outrageous and you are practicing the food trade at a time when gas costs are sending your customers to the grocery store or a place nearer in and food costs are what they are, and you are stuck with a finite amount of money, you're pretty much stuck with a few options.

1) Raise prices: What you are your competitors are thinking is that you can't raise prices, because nobody will eat there. The fact that you are subsidizing the dinners of numerous well heeled diners at the cost of needy kitchen drones is hardly an argument for letting your customers pay what the product is worth. Of course if you all did it, people would get used to it, after a few restaurants went under..but hey, that's business., Of course you could all decide to do it, but that's a Federal offense and prison food is awful, I hear.

2) Cut portions. While we all know that the food is not what drives the expense at a well run restaurant-(todays average food cost is about 27% - or was - down from a comfortable 32% quite a while back.

3) Cut staff. Speaks for itself. Let your chef wash dishes. After all, he's the guy who got them dirty, isn't he?

4) Cut quality: Assume your diner won't know the difference and get it from the big suppliers rather than the boutique brokers. Make your $22 steak (yeah, I know) a $22 sausage. With vidalias.

5) Cut services: Let your mom wash and iron your linen. Pick up your dry goods at Costco. Do your own books until midnight. Cut out recruiters and ad agencies. Writer letters about your restaurant to the Times.

6) Make like the airlines. Charge $15 to store a coat. Add surcharges for silverware and place settings - very European, you know. Add a $25 charge for a view seat.

7) Cheat: Add tips to the bills of dining Europeans who don't pay them, then split tips to offset what you can't pay your staff. Have your staff work off the clock and pay them under the table.

8) Add fuel and food cost surcharges. Your suppliers do, don't they? So do some San Francisco restaurants.

9) Guerrilla marketing: Get an assumed name or ten and go on Yelp and post fantastic things about your restaurant and awful stuff about your competitors. Ask your guests, uncles and aunts to write you into Zagat.

10) Beat the stuffing out of your purveyors on price.

In the end it's a supply and demand economy, so restaurateurs demand. That's how it works, or at least it's supposed to. That's assuming that anything works the way it should.
The one thing my restaurants never get criticized for is their food but the one thing that always can (and does) cause a slip up is service. If you want to run a REMARKABLE restaurant, service should be the number one priority in my opinion. If you have great food, a great place and just so-so service, you cannot command the top prices. However, if you have everything in place, service, food and ambiance, you have it all and you can get it all! I agree with the last post by Matt Urdan. I personally know Danny Meyer, who wrote me a fabulous note in my copy of Setting the Table. That book should be required reading for anyone who owns a restaurant. Danny is the epitome of everything not only a restauranteur should be, but simply what a man should be as well.
I second you on both counts. We have a much harder time finding competent front management we are comfortable sending out than good chefs. Cornell even put out a study a year of so ago showing that service actually influences the perception of flavor and food quality, so even if food and concept are spot on, service is crucial.
On Danny Meyer, absolutely. I had the pleasure of meeting him some time back, before the book, and interviewing him for an article comparing East Coast to West Coast Service. It was enlightening. His policies provide the foundations for good restaurant operation, and his book is a resource for anyone in this, or for that matter, any customer based industry,
Funny you should mention him. A friend who owns a small group of very casual locations here in California has asked me what I thought about opening a restaurant with a "star chef' in Chelsea. I told him he needs to contact Danny Meyer. Coincidence.
By the way, what do you think about Chelsea for restaurant locations?





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