While no one would deny that an increase in minimum wage is good for UK workers, the increase in costs may have a serious impact on a restaurant’s ability to turn a profit and deliver shareholder investments.
From the discussions I’ve been having with industry insiders and the research that Yumpingo does through our satisfaction growth surveys, there is an opportunity to increase the bottom line and see a rise in your Net Promoter Scores (NPS).
We heard recently that the UK is falling into another recession. Like everyone, we’re concerned about what that means in terms of consumer confidence and whether people are going to be confident enough with their finances to continue going out and spending at restaurants and bars.
Coupled with the fact we’ve also got operational costs at an all time high in the industry. Add to that even more cost pressure as the minimum UK wage is set to rise in April, up from the National Living Wage for those over 23 from £10.42 to £11.44.
This means rising labour costs are set to become the biggest challenge.
So the issues right now are: how do operators overcome these high costs? How do they solve the pressure of driving sales, the pressure of making sure that customers keep coming back to spend money.
While a pay rise is welcome news for front-line hospitality teams, it poses a real challenge for businesses already struggling with high operational costs, especially in the midst of a relentless cost of living crisis.
For many brands, the hike in minimum wage means it's going to be tougher to turn a profit while keeping their guests happy. There's a nagging temptation to cut back on staff, but you worry it might hurt service quality and how much your guests will spend.
As my colleague Matt Holy wrote in a recent blog post, "guests who were given dessert menus had average checks about 5% higher than those who weren’t. These guests not only spent more money in the restaurant, but left significantly happier, with a NPS nearly 40 points higher than guests who were not offered dessert menus."
In the midst of all these challenges, there’s an opportunity to put technology to work on the problem and tackle it head on.
Instead of seeing labour as a roadblock, let's see it as an opportunity to fine-tune operations. Efficiency is the foundation of any solution to the squeeze of higher labour costs and cautious consumer wallets.
You can spot and fix inefficiencies in how you do things, freeing up your teams to focus on the stuff that actually brings in cash, all without having to hire more people.
Take a good hard look at your setup and find areas you can streamline. How can you make the right decisions to:
There is an opportunity to look at the time-consuming tasks and get more done in less time.
Here's where Yumpingo comes in handy. With our data-driven insights, we can help you make smart decisions that not only make your guests happy but help you save on labour in the right areas, while continuing to boost guest satisfaction and sales.
Looking forward, we've got to be ready. Being proactive now will help us weather the storm. It's time to embrace new ways of working and focus on what makes us more efficient and keep our guests smiling.
By focusing on efficiency, getting stuff done, and putting your guests first, we can feed growth.
If you’re looking for support in improving your team development, get in touch with us today to see how we can help.