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This month we look at: chili pepper prices, how to optimize your restaurant for patio season, Gen Z in the kitchen, inflation and national restaurant sales trends from April.

This weekend starts off one of the biggest events in the restaurant world, the National Restaurant Association show. Our team will be there, comparing free hot dogs (I am personally #teamVienna), eating way too many food samples, visiting Coca-Cola Village, and (of course) talking about all things restaurant tech and liquor inventory in real life.

If you're attending, be sure to stop by booth #5666 and grab a super special print version of our newsletters (along with some of our semi-famous stickers). We added in industry trends, metrics, and even a few fun games too, like this What's Your Restaurant Personality Type quiz

This month's Board is all about things heating up, naturally. But my favorite has to be the restaurant sales from April (more on that below).

I'd love to know what you're looking forward to if you're attending the NRA show this weekend, or what's been your favorite part about past shows if you're taking this year off. Reply to this email and let me know (I read every reply, I promise!). 

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Rachel & the MarginEdge team

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MONTHLY SALES METRICS & UPDATE

Overall sales by segment APR 24

Full Service ended the month 1% up from April 2023's numbers and Fast Casual ended with a whopping 6% growth. No doubt about it, April 2024 was a fantastic month for restaurants from both segments, but Fast Casual really pulled out all the stops. 

The average food category costs as a percentage of sales increased from last month for MarginEdge customers, with food costs averaging 30% of sales. While up, 30% is still a healthy number!

Regionally, the Northeast ended the month with strong positive growth while the other regions ended all within a few percent of each other. 

Dig into the full report.

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ITEM TO WATCH

Chili peppers

It's getting hot in here, so take off that Shishito peppers app from your menu. Or don't, we can't tell you what to do. But pepper prices are getting pretty spicy so you should at least be keeping an eye on their prices. For MarginEdge customers, Shishito, serrano and jalapeño prices have all been increasing steadily over the last month. Shishito prices alone have doubled, to a median price of $7.70/pound.

So what's the deal? Well, chili pepper imports increased 4% last year, making up approximately 95% of total availability. This means we're incredibly dependent on Mexico for our chili peppers, and thanks to a historic drought and water crisis in their northern growing states like Sinaloa, production has declined similarly to bell peppers that we watched back in January.

This drought is so bad, it's even led beloved (and controversial) Sriracha manufacturer, Huy Fong Foods to warn of a sriracha shortage coming this year.

Shishito pepper prices may 24Jalapeno pepper prices may 24Serrano pepper prices may 24 

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Luna's Tacos & Tequila | Multiple locations, CO

ASK [me] ANYTHING

How do I optimize sales during patio season?

If you transitioned to outdoor dining during the pandemic, you definitely learned a thing or two about the highs and lows of patio season. Due to the weather being, well, weather, getting the most out of your patio dining sales is never a guarantee. Here are a few tips to help boost those profits all summer long:

1. Prioritize guest comfort. This is the key to great hospitality, guest experiences and ultimately loyalty - which all mean more cash for your margins. Patios can be brutal in the summer, so if you want to increase spend per ticket, the best first step is to ensure your guests are comfy and happy.

  • At a minimum, you should have an adequate number of umbrellas or shades to cover your tables comfortably, but a large overhead shading system works even better because it can protect tables from rain (allowing you to use the space year-round), and doesn't get in the way of your staff while serving. 
  • Think about adding greenery, which naturally brings the temp down, water bowls for dogs, and misters or heaters for night-time patio dining.
  • If your patio is on the street, you should also look into creating a barricade to help diners feel more protected from the road traffic and (bonus for you) prevent people from seating themselves when they're not meant to!

2. Optimized menu options. Patio dining is different from dining indoors because guests are inherently more conscious of the weather and season. Creating menu items that feel authentic to that experience is a great way to increase profits (and honestly, who doesn't want a margarita the second it hits 75º and sunny?).

  • Add pitcher or batched cocktails to your menu for more efficient ways to sell your most popular summer drinks.
  • Since patios are better for larger groups, think about adding more shareable options for the table.
  • If you're in a particularly hot region, think about adding room-temperature or cooler entrees like salads or cold sandwiches to the menu.

3. Take care of your team. Patio season isn't always the greatest for your team (#chafingseason) but they arguably have the greatest impact on guest happiness and spending out of anything else in your restaurant. A happy team is more likely to result in happy guests. 

  • Misters and shade for your guests should also work for your servers so that the transition from the sweet, cool, 72º dining room out into the heat is as painless as possible.
  • Using a mobile POS terminal or a QR code ordering/paying system can make paying faster, which also means more potential turns for your patio.
  • Pay attention to the weather and plan staff accordingly so you're not overstaffing and wasting money when a last-minute summer storm rolls through.

Lastly, be sure to market the absolute crap out of your patio on social media. Use your city in your hashtags, and tag your restaurant's location so nearby prospective guests can find you. If people know it's there, they'll be more likely to stop by when the weather starts feeling like it's margarita o'clock.


💬 Ask [me] anything!
Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting, or restaurant operations in general? 💌 Email me or message us on our social media channels.

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Luna's Tacos & Tequila | Multiple locations, CO

THE ECONOMY

Order Inflation Up (but slowing)

If you were speculating that inflation kept on keeping on this past April, you'd be correct according to the Bureau of Labor Statistic's April report. Although the numbers weren't fantastic, they did show signs of domestic demand slowing with the lowest annual increase  in core inflation since early 2021.

Food away from home came in at 0.3% change from March, as it did last month, and overall food inflation had no change. Compared to 12 months ago, food away from home prices were up 4.1%, which is only slightly lower than March's YOY by 0.1%. 

When looking at segments, Limited Service meals are 4.8% higher, and Full Service meals are up 3.4% over the last 12 months. Full Service's inflation percentage is 0.2% higher than March's 12-month comparison.

The overall index sits at 3.4% up year-over-year, which is a 0.1% decrease from March's report. News reports are generally signaling that this is a sign things are slowing down, and we've got a better shot at a September rate cut. 🤞

Tl;dr - food in general did not increase, but food away from home still came up a little. No real change.

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Wing Shack | Multiple locations, CO

'TIS THE SEASON

Gen Z in the Kitchen

Every generation brings its own quirks and strengths to the workplace. Gen Xers are known for being resourceful and independent. Millennials are known for being empathetic and highly educated (with the debt to prove it). As more and more Gen Zers enter the workforce (they're in their 20s now, folks), they'll understandably bring their own set of skills and traits with them. What does that mean for our industry and its future?

To start, Gen Z are digital natives. They are apt at and prefer using digital tools not just for social interactions but also as an extension of their professional skill set. Leveraging technology in the kitchen can maximize their contributions. Long story short, restaurant tech adoption is going to increase as Gen Z becomes a larger part of the workforce. 

Interestingly, Gen Zers on average lack the work experience their preceding generations had at the same age. Because of this, they may appreciate guidance tailored to their individual needs and goals. Personalized training and direct communication can help them grow professionally and feel valued in the workplace. 

And speaking of direct communication, Gen Z values clear, concise communication and thrives on feedback (even if you have to brush up on your TikTok slang to translate). Using straightforward communication can enhance their work experience and productivity. They're also bringing a shift to sometimes toxic restaurant kitchen dynamics, emphasizing collaboration, innovation, and flexibility.
 
In short, they're eager for tech that helps them work smarter, not harder, and care about ensuring safe work environments for everyone. Sounds like a bright future to me.

What's [me] into

 

✈️ WHERE WE'RE GOING

😂 WHAT WE'RE LAUGHING AT

    • The Best and Worst Barstools - A definitive guide. I should note that while generally the list is sound, I would argue that Punch's #2 should be in the top spot. But that may just be my age (and bad back) talking.
    • An Ode to Duke's Mayo by Boogy and Peel - There is a right answer to the question of which mayo is the best. And as the Duke's official Instagram account commented, "It's mayo on the dance floor."
    • Thai Food Near Me - Did this NY Thai restaurant crack the code to restaurant SEO?? Yes, the answer is yes.  

📖 WHAT WE'RE READING

    • Why You Can’t Get a Restaurant Reservation - Slipping the host a $20 won't cut it anymore. The New Yorker gives us a deep dive into the world of NYC reservations and how bots, mercenaries and scalpers have created a truly dark underbelly hurting both diners and restaurateurs. 

🎧 WHAT WE'RE LISTENING TO

    • Talkin' in the Walk-In - While not a podcast (but you can still listen to it like it is), Eli Sussman, chef and mastermind behind the industry meme IG page @thesussmans, submits NY chefs to a smattering of questions while chilling (literally) in their walk-ins. 

    • Full Comp - The latest episode of Full Comp interviews Justin Egan of Wing It On, on how they were able to scale their business regardless of market conditions. 

 

 

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