We’ve seen it all over the news – food prices are rising, bills are rising, petrol is rising. Is a recession around the corner? We hope not but it never harms to plan!
With the cost of living crisis set to grow, finances are going to be stretched with household disposable income at its lowest since 1955. It’s important that you take action early to limit the impact this will have, so let’s look at some strategies you can implement to recession proof your business.
A great place to start is by looking and learning about the trends from the last recession. One thing we know about downturns is that takeaway performs very well (and so does ‘occasion’ dining) so these are the key areas that you want to turn your attention to! We’ve also thrown in FIVE more recession proofing suggestions at the end of the article as a bonus so be sure to check those out as well!
Let’s look at…
DOUBLE DOWN ON TAKEAWAY
They say when M&S’ set meal sales rise it’s the sign of a recession – people swap going out for a ‘luxury treat’ at home with supermarket chains pushing strong combination offers on their ‘dine at home’ meal experiences often inclusive of a bottle of wine targeting couples.
Another example of takeaway success during challenging times comes from global pizza provider, Domino’s. Their sales soared over 11% in the last recession (a time when many restaurant sales were heavily down). Interestingly in times of recession, Domino’s increases advert spend rather than decreasing it in order to reach more people with targeted offers and promotions.
To summarise, focus on making your takeaway competitive whether that be providing your customers with aesthetic packaging that’s shareable on social media or by creating a special takeaway only menu with new dishes or combination offers and promotions. But ultimately, make sure it’s as easy as possible for your customers to order, pay and select a delivery option for their takeaway!
Secondly, let’s look more into
OCCASION DINING
As we all know, birthdays, anniversaries and key dates in the calendar such as Mother’s Day and Father’s Day provide the perfect excuse for a meal out at your favourite restaurant with family/friends! The celebration market really is the one area that people will still splurge on.
So let’s look a little deeper into how your birthday marketing is set up? Do you contact everyone in the local area who’s got an upcoming birthday? Have you built up a database of loyal customers that can be messaged, emailed or DM’d at the drop of a hat when there’s a special event coming up? If you answered no to all of these questions, thankfully we’re here to help put that right for you! Get in touch with our team today and we can get the ball rolling for you!
Lastly, and not directly linked in a recession but across the hundreds of clients we work with on a monthly basis we’ve seen a very clear trend between instagrammable restaurants out performing those that aren’t. What do we mean? Invest in a great interior, add a few ‘wow’ dishes or drinks to the menu and for a really quick win just get some super stylish plates to make your presentation look a million dollars! An average product means your sales will be average – you need to stand out in order to strive for success.
Here are our bonus suggestions just for you…
UNBUNDLE ITEMS
Increase your margins that little bit more by unbundling your menu items where possible, for example as a burger joint sell your burger and fries separately rather than combining the two for one single price. You still want to offer customers value so be careful with this but it can work well depending on your audience and how you advertise.
OFFER SMALLER SIZES
Just like Costa have done with their ‘Babyccino’ we recommend offering a diverse range of sizes to cater to all desires. We’re seeing more businesses branch out to offering a ‘Mini’ range so make sure you’re keeping up with the curve! Of course smaller sizes mean smaller prices for customers giving everyone a choice.
CHEAPER INGREDIENTS
Be creative with your menu to create amazing tasting dishes with cheaper cuts of meat! We know quality is key but the difference in price between chicken breasts and chicken thighs is significant so tailor your menu to maximise your margin without compromising on taste!
HAPPY HOUR ON A HIGH PROFIT ITEM
It’s quite simple, people love a deal. It could be half price or a special price. One deal that gets people to spend more and become regulars is… FREE menu items. It’s all about creating that perception of great value! Choose a high profit item and you won’t be making a loss even when you do offer a great promotion on this.
CHANGE YOUR MENU REGULARLY
Now why would you do this? Well, the main reason behind this exercise is it’s easier to change the price of dishes as prices of ingredients fluctuate. Not only is this a USP that you’ve got a diverse menu that changes daily, weekly or monthly (whichever you’re most comfortable with) but you can be most flexible to supplier costs and trends.
