By: Bruce Reinstein | June 24, 2024

Why did it take a pandemic to figure it out?

Sometimes it takes a major event in our lives to force us to adjust. It turns out that these adjustments are just practical changes that should have been made without being prodded or pushed into it. Prior to the pandemic, many decisions in foodservice were made based upon what was best for the operator and not the consumer.

Many were ego driven, but in most cases, team members and consumers were not involved in the decision. It is hard to imagine in the “new normal” a decision that does not involve the people who prepare or consume the products.

1. Simplification is about more than the menu.
Back in 2020, simplification became the key focus of foodservice operators who were dealing with bloated menus, single use SKUs, and complicated preparation and execution practices. There was no choice but to simplify as sales dropped, and staffing became a major problem.

Simplification has now become much more than about the menu. It is about making it easier for the customer to order, pay, and pick-up/have their meal delivered. It is also about making it easier for employees to build the menu items so they can do it quicker, but more importantly do it consistently.

2. Consistency of execution drives consumer traffic.
While great tasting food at a good value remains crucial to what the consumer wants, nothing really matters to them there is a lack of consistency in the food & beverage, service or the overall experience.

Convenience used to be the only reason to visit a convenience store, but that is not the case today.

Convenience store foodservice has become a destination for the consumer, much like restaurants. If consistent execution is not in the cards, convenience stores not only lose the foodservice business, but also the fuel, sundries and more that they purchase while they are there.

From Kinetic12’s Q1 2024 Emergence Group Report

3. The approach to team engagement has permanently changed.
The pandemic forced operators to learn how to do more with less. With a shortage of staff, it became crucial to cross-train employees and most of all treat them in ways that they had never been treated before.

Team members always preferred to remain loyal and avoid going from job to job, but they weren’t treated in a proper fashion and money alone was the key factor. Today, making work enjoyable, providing a quality-of-life balance and allowing team members to be engaged in decision making has a tremendous impact on their loyalty and desire to remain at their job. They are also looking for opportunities to learn and move up in the organization. Culture is not something you talk about — it must be earned.

From Kinetic12’s Q1 2024 Emergence Group Report

4. Value is much more than just price.
The consumer, in many cases, used to focus strictly on price as a guideline to getting a good value. Coupons, loyalty cards, discount nights and more were drivers of traffic.

Value is defined quite differently now. Price still is the most important element value, but other intangibles come into play which adjust the value proposition. If it was as easy as everyone selling the same exact products at different prices, the consumer response would be obvious.

Now there is focus on differentiation, consistent execution, portion size, enhanced product quality, a high level of service and hospitality and enhanced experience. Foodservice operators now must adapt to value.

From Kinetic12’s Q1 2024 Emergence Group Report

5. Driving sales does not necessarily reflect driving profitability.
Four years ago, customer counts went to zero. Gradually, customers came back, but for many, not at the levels necessary. Sales also increased due to significant price increases which ultimately reduced customer counts. The result has been a quandary. Costs are up, but the consumer will not pay a higher price.

Profitability now must come as a result of creative innovation, using quality ingredients that are available at reasonable costs, and providing consumers with customized options where they make the decision to increase their average check.

Loss leaders bring in customers, but they also cut into your bottom line. LTOs must now become the most profitable foodservice items. A great perceived value for the customer and profitable for the operator.

From Kinetic12’s Q1 2024 Emergence Group Report

6. Hospitality is back and not going away.
Hospitality is defined as the friendly and generous reception and entertainment of guests. It has always been associated with hotels. During the last four years, convenience foodservice operators have had a lot to digest.

Part of it was getting the labor, training the team, and going back to a customer first approach and getting away from a transactional mindset. Moving forward, great service is not enough.

Hospitality is all about a team being happy a customer comes in and making sure that they have an experience that exceeds their expectations. This is a big part of why they will return.

Bruce Reinstein and Tim Hand are partners with Kinetic12 Consulting, a Chicago-based foodservice and general management consulting firm. The firm works with leading foodservice operators, suppliers and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. It also engages as keynote speakers at operator franchise conferences and supplier sales meetings.

Reinstein and Hand can be reached at [email protected] or [email protected].

Source: CStore Decisions