Brianna Parker Number of employees in Restaurant Industry in the U.S. : 11.2M
Sales in Food/Drinking services restaurants in the U.S. : $876.33 Billion
Did you know? The busiest day in a restaurant is on Mother’s Day. It is estimated about 75 million dined out during 2022 Mother’s Day.
Restaurant Strengths
1. Create local jobs: The restaurant industry is continuously hiring and creating more jobs. It is estimated that the sector hires as many as 11.2 million. Thus, when people spend money at a restaurant, it goes straight to feeding families in the same community. Furthermore, the restaurant sector currently creates middle-class jobs at a rate of three times more than any other sector.
2. First jobs for most people: Most people often begin their first jobs in the restaurant business before moving to other sectors or getting a college education. Thus, you can view restaurants as enablers of the future. During these early jobs, the young people can save enough money to pay for their education with little support needed.
3. Greater interior design: There is a reason why people prefer going to eat at a restaurant and not at home. The décor in most restaurants is normally set in a way that creates memories. Thus, when people walk in for a meal, they are getting out with more than just a full stomach.
4. Personalized customer care: Restaurants have one of the best opportunities to deliver personalized customer services. In some restaurants, customers have a dedicated attendant who takes their orders and ensures everything is handled according to requirements. The specific attendant assigned to a given table can go beyond just bringing meals. They can guide on where to get restrooms, wash hands, and even recommend what to have from the menu.
5. Guest loyalty: It is easy for people to develop loyalty to particular restaurants as long as they enjoy the services and food. Most people often have a sentimental attachment to a restaurant, explaining why they may have this kind of loyalty. It could be for different reasons, including that this is where they went on a first date or got proposed to. In other cases, it is due to convenience in things like parking.
6. Better local knowledge: A restaurant set in the local community has a better understanding of its surroundings. Such a restaurant knows the kinds of meals its customers like as well as the frequency of visits and when they are likely to be busier. The restaurant then uses this knowledge to inform key decisions like budgeting and staffing.
7. Premium location: Most restaurants are set in premium locations where customers can easily drive in and out. Additionally, they position themselves in a way that you can spot from afar, pulling in more crowds in the process. In some cases, some restaurants may be built for customers who like privacy. You will typically find these restaurants slightly located in the interior to give their guests the privacy that they desire.
8. Part of the community: Most members of the community regarding specific restaurants to be one of their own. That is, they are all genuinely interested in seeing the restaurant excel. The success of such a business reflects overall success in the community because they create jobs and pay taxes to the local government.
9. Unique meals: Some of the meals made at the restaurant may be too costly or complicated to make at home. Thus, the restaurant is seen as providing members of the family to try out dishes that they would have otherwise never had.
10. Pricing power: Restaurants have the advantage of offering highly competitive prices for their meals and drinks. Since they are set to provide meals to a bigger audience, they buy the ingredients in bulk and get better discounts. They can then pass these discounts to their customers in the form of better prices. The cost of preparing a similar meal at home would be highly costly.
Restaurant Weaknesses
1. Stiff competition: Restaurants have no choice but to contend with tough competition for customers. If it happens that one restaurant gets a bigger share of the customers than the latter, the restaurant would be forced out of business.
2. High marketing costs: Considering the stiff competition that exists among restaurants, owners have to set aside high budgets for marketing. For example, most of them could incur higher costs by paying social media influencers to drive traffic to the eateries.
3. New openings: New restaurants are often open within a shorter timeframe. When that happens, existing staff may go looking for jobs there in a bid to get higher wages. Additionally, the new restaurants take away a considerable number of customers, making competition tougher.
4. Similar cuisine types: Some restaurants have the same cuisine, taking away their uniqueness. That creates confusion for some customers on where to go and enjoy their meals. At the same time, restaurants that have less marking power may end up not attracting many customers.
5. Small market size: The market size of restaurants is considerably small compared to other sectors.
6. Lack of brand awareness: Some people identify restaurants based on the meals on the menu and not the brand name. That explains why some restaurants have a hard time building a solid brand name for themselves.
7. Lack of online presence: In an era where people mostly search online for places to eat out, restaurants are ironically lagging behind in terms of developing an online presence. The lack of this online presence makes it difficult for them to pull in crowds needed to get operational sales levels.
8. Online deliveries mishap: Some restaurants are yet to adopt online deliveries. And those that have the feature tend to use delivery companies (for example Uber Eats, Grubhub) that cause significant delays and order diversion. Sometimes there have been cases of food getting delivered to the wrong person.
Restaurant Opportunities
Some of the opportunities that a restaurant can grab to increase its relevance include:
- Running social media campaigns
- Increasing positive reviews through superb services
- Growing local brand
- Running special offers
- Offering online deliveries
- Expanding locations
Restaurant Threats
- Lack of differentiation
- The rising cost of living and lingering recession has reduced the number of people eating out
- Decreasing income for guests
- Loss of good suppliers
References & more information
- Featured image by Pablo Merchán Montes
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Kevin Johnson
S.K. Gupta
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