Restaurant Recession?

Spoiler alert… the answer is NO! Ok Joe, so why am I reading and hearing about recent upticks in the number of restaurants that are closing?

By Capital Rivers

It would be easy, and in my opinion uninformed, to blame restaurant closures on increases in minimum wage, a tight labor market, or increasing rents. These influences are real and must be dealt with. Here’s the truth though, there are restaurants, successful restaurants, profitable restaurants, that are thriving, taking these influences head-on.

When you simmer it all down, it’s as simple as this. Are you playing restaurant owner or are you an operator? Being known as an operator, within industry circles, is a badge of honor. An operator is someone who sweats the smallest details in their restaurant. An operator is someone who understands that they are in the hospitality business; that they are in the business to serve their guests and their team members. An operator is someone who can perform every position in their restaurant while at the same time be as proficient in analyzing sales data and operational costs. Really knowing how to read a P&L.

Operators are forward-thinking. They understand that labor costs will continue to rise. They don’t sit around and have a pity party, they take action! They figure it out. Is it easy, of course not, but that’s one of the differences between playing restaurant owner and being an operator. Operators get comfortable with being uncomfortable. Operators look to make their restaurants more efficient through cross-training team members or through utilizing current and emerging technologies.

Operators understand that they are always hiring. They set a few hours aside each week for open interviews, regardless if they actually have a position to fill at that time. So, in the event Johnny decides to move on and leave the restaurant, they have qualified candidates available to reach out to. They also understand that if they can upgrade the talent of their team, they have a responsibility not only to their team to do so, but also to the business.

Operators maximize every square foot of their restaurant. There is a known purpose and a plan as to the size of their restaurant and its location before they sign a lease. They know how many guests they need to serve to break even. They know how many guests they need to serve to reach the return they are looking for.

Restaurant Recession? No. Scarcity of Operators, Yes.

What we are seeing for the most part with the increase in restaurant closures is a necessary cleansing. A power washing if you will of those “playing” restaurant owner. There are legitimate operators whose restaurants have closed; most of which closed because they decided it was the right time for them to shut the doors and turn off the lights for good. They were in control. They are operators.