CARPE DIEM: How to Seize Business All Hours of the Day and Increase Sales

Americans are hungry all day. It’s hard not to notice the abundance of dining options available for every meal; one could easily find a place to eat at any hour, day or night. And it’s not just meals – we love to snack too! Our ravenous appetites have not gone unnoticed by the restaurant industry, and as an operator, you can tap into the American appetite and increase sales by positioning your products to appeal to consumers when they’re hungry.

COFFEE: A CAUTIONARY TALE

Take McDonald’s and Starbucks for example: These are two of the biggest names in quick foodservice of this generation. In 2001, McDonald’s began testing their McCafé concept in select locations.1 The idea was based on the premise that consumers love premium, freshly brewed coffee (as shown by the success of Starbucks) as well as value, convenience and multitasking; therefore, adding cappuccinos, mochas and lattes to the already successful lineup of burgers and fries would be a hit. Almost a decade after the initial launch, many McDonald’s locations around the country now feature McCafés with varying degrees of success, but more importantly, the concept of expanding offerings to capture a larger audience with minimal changes to the main business has been an inspiration to others.

Starbucks was in danger of being adversely affected by the emergence of a major competitor when they were challenged by McCafé after years of booming growth and the painstaking marketing that it took to craft their brand. Stock prices began to fall, and they had to think fast.2 In order to compete with the volume of McDonald’s and to capitalize on their demographic of health-conscious, higher-income customers, Starbucks launched a line of breakfast sandwiches in addition to the pastries they already offered. The Starbucks sandwiches had a different flavor profile than McDonald’s with ingredients like gouda cheese, black forest ham and turkey bacon to entice a more-sophisticated palate.3 In Starbucks stores now, one can find the perfect oatmeal for breakfast, low-calorie panini sandwiches for lunch and an expanded offering of prepackaged snacks such as chips and granola bars any time of day.4 A specialty food operator must be aware of their unique opportunities to increase tickets and draw more customers, then make a plan for how to modify their existing operation to accomplish this goal.

STICK TO YOUR STRONG SUIT

Many gelaterias and frozen yogurt shops in America already serve additional food and drinks because their main offerings are viewed as a dessert, snack or addition to a meal rather than a meal unto itself. Those who choose to stay true to their roots and serve only specialty frozen desserts have their reasons for doing so (see Chart 1). But what if your product mix isn’t bringing customers in the door? In order to determine what will sell best alongside gelato or frozen yogurt, an operator must consider the image they have already created for their concept and then stay true to it. Many restaurants have closed their doors throughout history because of too many or the wrong kind of changes as perceived by their customers.

HOURS

Take a look at the hours your shop is already open. What time do you have to arrive for prep? How long is your closing routine? Increasing shop hours or days of the week that you are open will mean additional electricity and labor hours, but if the benefit outweighs the cost, it’s worth it. Since there is no way to predict the real profit increase from adding hours for your shop, you may want to work within your existing timeframe and add offerings, and then reassess the hours. If you feel your shop is already open for a sufficiently long time, it’s time to look at the major and alternative mealtimes (see Chart 2).

Conventional wisdom dictates what foods people expect to see at breakfast, lunch and dinner, but then there are foods that can be eaten all day, like sandwiches. For example, if you are open from 6:00 a.m. until 2:00 p.m. and serving gelato, frozen yogurt, pastries and coffee, it may be prudent to add breakfast items like granola, smoothies and energy drinks or lunch items like wraps, salads and flatbread pizza. If you are open around dinner time and don’t want to compete with sit-down restaurants, you may look into getting a license to serve wine and providing tapas or antipasti. The best way to come up with new menu ideas is by listening to what your customers are saying, or not saying, about your offerings.

Chart 2

COMPETITION

Another thing to consider is location: Who and where are your competitors? If a sub sandwich or fast food chain is your close neighbor, observe that this will increase traffic during main mealtimes, and a well-positioned alternative will inevitably catch some spill-over. You may be in a business park or downtown area

that has high weekday traffic with myriad options for specialty coffees and drinks, so oversaturation of the market could have an effect. Make a list of the types of foods and drinks offered within a five-mile radius of your store and give special attention to items that overlap with what you sell. Notice items that are underrepresented, items that are successful and items that have failed. This market research will help you to discover new additions to your menu that will increase foot traffic and sales at the register.

RESOURCES

Give consideration to your resources: capacity, equipment and labor. A panini press is a moderate investment, while the installation of a char grill may add too much overhead and force the sale price of the product up. Say you want to add self-serve salads, but the footprint of a salad bar in the dining area may compromise valuable seating. While you are planning which menu items to add, don’t forget to account for the additional expenses of ingredients, equipment installation, electricity, plumbing or tools. It is possible to add new menu items without increasing square footage or equipment, but any new idea will require training and sometimes create a need for additional staff. When you launch a concept to your employees, make sure to be positive about your expectations for the change and give them an incentive to make it work.

IMAGE

Refer to your mission statement and core values to determine how you can plan additions that make sense without compromising your image – these ideals are in place to influence day-to-day behavior, but also to guide you through changes. If you have cultivated a fun, whimsical, family-friendly environment, then think of what healthy choices parents want to feed their children and themselves when they’re dining out. If your shop has an upscale feel and your clientele expect only the best ingredients and quality, you should avoid adding preprocessed dishes to your menu just because they’re easy and have a trendy flavor profile.

While staying true to your image is important, not everything you serve has to strictly fit into a specific cuisine. American eaters have been known to eat pizza, nachos and eggrolls all on the same plate, so just because you may have a traditional Italian theme, don’t automatically rule out serving French crepes or Bavarian pretzels. Just make sure what you add feels right, and be flexible. Bad ideas usually identify themselves quickly, so be perceptive, listen to feedback, and don’t buy a year’s supply of funnel cake batter mix just because it’s your favorite treat at the circus!

MARKETING

Once you’ve made the decision to expand your menu, your hours or both – advertise it. The only way your customers will embrace your change is if you invite them to be a part of it. If you are adding lunch items, you may want to issue a coupon or discount like “bring a friend for half price” or “get a small gelato FREE with purchase of sandwich and drink.” If you are extending your hours, plan some events during the first week or so to draw customers in – think acoustic guitarist for a grown-up shop or balloon-artist for a family-friendly shop. Social media is a great tool to communicate with your regulars and attract new customers; try posting a secret promotion on Facebook or Twitter using a verbal “password” redeemable for a special discount or add-on. And even though we live in a connected society, human interaction still goes a long way. Consider advertising your change by sending an employee out to nearby businesses with token giveaways like magnets or even hiring a sign-spinner to entertain in front of your shop during the new hours.

At the end of the day, increasing your sales is about listening to the needs of the market and cultivating the wisdom to know the difference between what’s working and what’s not. Set goals and a timeframe for what you hope to accomplish with your menu or hour changes, then evaluate during every stage of the process. For everything you add, make sure you have a contingency plan for what to do if it is not successful – your new menu items or extended hours should help your business, not create a liability. Also, look for synergies in what you already have; many ingredients and kitchen tools can be repurposed for different applications – the same plain yogurt you use for your granola parfaits can also be used to make a great sandwich spread; the oven you use to bake pastries can also toast crostinis for salads.

CASE STUDY:
Café Lucca5
Proprietor: Richard Coleman
Location: Old Towne, Orange, California
Concept: A unique café with the charm and warmth of old Italy
Recent Award: Best Gelato 2009 (OC Weekly Newspaper)

Original Menu:
– Hot breakfast and brunch
– Lunch including paninis, salads and soups
– Open during dinner hours serving the same menu as lunch
– Fresh gelato, sorbetto and specialty coffee all day

Menu Changes:
– Brunch including mixed drinks like their blood orange mimosa
– Full dinner menu with chef ’s specials, premium beers, large wine selection

How It Worked:
“[With gelato alone,] we would’ve never made it,” Coleman said. The initial offerings of well-prepared traditional Italian dishes established Café Lucca’s reputation in the community, so a full dinner menu and premium spirits were a natural progression
and did not even require a change in hours. For Coleman, the focus is always on the quality of the ingredients and the experience.
Fun Fact: Café Lucca does not offer coupons or discounts, but they do offer a raffle to give customers a chance to win a prize. Upon opening, one lucky customer won the raffle for a Vespa motorscooter. When Café Lucca launched their dinner menu, an even luckier couple won a trip to Italy!

CASE STUDY:
Ti Amo Gelato & Café6
Proprietor: The Kao Family
Location: Richmond Hill, Ontario, Canada
Concept: A warm, friendly café with a strong community focus
Recent Award: Best Gelato 2009 (Best Of The 905 – York Region)

Original Menu:
– 34 flavors of fresh gelato and sorbetto
– Specialty coffee, espresso, latte, chai
– Cakes and pastries

Menu Changes:
– Added savory sandwiches, soups and salads
– Added Bubble Tea to the list of specialty beverages
– Discontinued cakes and pastries, but still making some cookies/biscotti

How It Worked:
Ti Amo opened its doors across from the future site of the Richmond Hill Centre for the Performing Arts during the height of its construction. Very soon, they realized that their cakes and pastries were not doing well – customers came for the novelty and unique flavors of their gelato, but bought their baked goods at the other local bakeries.
As the theatre was preparing to open its doors, Ti Amo made the switch to satisfying, savory sandwiches and snacks instead of cakes to cater to the patrons looking for a light pre-show meal. Finding their niche, Ti Amo caught theatre goers coming and going, as many people would then stop after a performance to chat over coffee and dessert.
Fun Fact: Ti Amo responded to customer feedback by adding Bubble Tea to their list of specialty drinks because no other stores in town sold it! Proprietor Tracy Kao believes that, “you have to open yourself up to change,” and being close to your community is the best form of advertising.

Resources:
1 Ritter, M. (2008, January 10). McDonald’s Targets Starbucks. Retrieved January 28, 2010, from Voice of America News:http://www.voanews.com/specialenglish/archive/2008-01/2008-01-10-voa2.cfm?moddate=2008-01-10
2 Wikinvest. (2010, January 28). Wikinvest. Retrieved January 28, 2010, from Starbucks (SBUX):http://www.wikinvest.com/stock/Starbucks_(SBUX)
3, 4 Starbucks Media Relations. (2009, March 2). Coffee and Breakfast Make a Great Pair. Retrieved January 28, 2010, from Starbucks Newsroom: http://news.starbucks.com/article_display.cfm?article_id=181
5 Coleman, R. (2010, January 26). Cafe Lucca. (L. Kerrigan, Interviewer)
6 Kao, T. (2010, January 27). Ti Amo Gelato & Cafe. (L. Kerrigan, Interviewer)