The Next Normal & then the Next: Getting into Action

I’ve been calling the industry’s emergence the next normal in each of my conversations. It’s not the new normal because it’s changing every week and often every day. Like you, I share concerns over the safety of our teams and our guests. Like you, I share concerns about what the financials of the next normal look like and whether safety codes will fall into the mire that was nutrition labeling with every market having different standards. We can have concerns about our teams and concerns about our business -- there’s enough worry to go around but don’t let it paralyze.

The solution to fear and feelings of powerlessness is getting into action.

Optimized Menu: Using menu satisfaction data, cut down the menu to 25% in the near term with an eye to add more (but only as necessary) as the markets rebound.

• Fewer items means fewer SKUs to bring back. You can expect suppliers to have exited the business. You will run into pack life and shelf life issues to exacerbate waste. As you decrease usage, costs likely will increase so consolidation will be key.

• Along those lines, eliminate unique SKUs and some menu items which you've wanted to cut but had resistance. The customer will be more forgiving as the industry rebounds so use that good will to your benefit.

• Fewer items means fewer recipes to train for FOH and BOH teams as you rebuild the workforce. Use this as the opportunity to consolidate stations.

• Model all of these changes to ensure margin, FC and PPA.

• Plan for disposable menus while considering eliminating physical menus outright.

• With disposable, you can play with placement... pricing... menu count... while calculating impact.

• Brands with geographic coverage can use early openers as trials for optimization prior to additional markets coming online.

• For digital, the primary barrier to having consumers use their own phones have been consumers. It's a new world now where guests won't want to touch anything extraneous in the near term. By moving to digital, the costs and lead times for physical menus go away. You can change pricing on the fly... have calories and allergens virtual... no shipping costs... etc. You can also add video of apps and cocktails to drive PPA.

• Users on their own phone also opens up contactless payment, pushes to social, and promotion of loyalty (or the Fridays app).

Reconsider the Discounts: It's going to be a slow recovery and a noisy market when restaurants start back, but customers are also going to be hungry for social experiences. Discounting for temporary traffic gains has been sustaining the enterprise restaurant industry since the 2008 downturn. Now may be the time to course correct. When looking at the optimized menu modeling, consider using the blended (on promotion, off promotion) PPA as the target and build a menu delivering value every day.

Service: As we consider the value imbalance stated above, our taking price to drive sales and to cover labor increases has only exacerbated the discount issue. As we come back, we'll need to start largely from scratch with commensurate training costs. The answer is reconsider the service model to require fewer team members.

• Digital menus on user's smartphones allow for digital on-line ordering in-restaurant. As I said, the consumer has been the primary barrier to making this move so recognize how their needs are changing -- tech has value for their safety vs. the old world where tech could be seen as a barrier to hospitality.

• Digital menus on user's smartphones allow for digital on-line and contactless payment.

Feedback: This both "how are WE doing?" and "how are YOU doing?" Emotions will be heightened in most markets so it's critical to assess the consumer's comfort and your team's delivery of safety standards.