Slowdown Expansion

While discussing a new restaurant currently under construction in St. Helena, California, a friend asked me how I thought the industry was doing overall. The gentleman had always had the inner desire to open an eatery, but was either too scared or too bright. It seems, however, that as we drive by vacant spaces his eyes brighten. A bad sign. And as more and more people decide they want to own a restaurant it will be difficult for those with the gleam disperse those culinary desires.Slowdown or no slowdown.

Television promotes the industry, nightly. I am sure that more Americans nod off now, dreaming of their name i lights than ever before thanks to Emeril, Bobby Flay and Gordon Ramsay.

Although there seems to be a bit of a slowdown in restaurant profits, the expansion program many of the chains are planning is mind boggling. A headline in Nation´s Restaurant News last month shouted, "P.F. Chang´s continues expansion plans despite setbacks."

Analysts claim that the economy, classified as "lackluster", will slow consumer visits to the country´s restaurants. Claiming this will also eat into Chang´s single unit slowdown, they went on to claim that Chang´s will eventually begin to cannibalize existing units due to the expansion.

There is a definite lesson here and you don´t have to own a137 units to take heed: Don´t expand too close to home. If you have a successful restaurant, and you want to open another, either develop a second concept or move out of town- as far away as possible while still convenient to your operation.

The restaurant business will continue to be one of the major industries in the country. With 13 million employees, only the government employs more people. (I always thought it would be interesting to have a job swap week. The government employees run the restaurants, we run the government. Would the meals come out on time or would our waiters just put us on hold when trying to order?) And, although economic slowdowns have a direct effect on restaurants cream rises to the top.

A once special occasion event, dining out daily has now become as much of the American fabric as taking a daily shower. Fewer and fewer people are cooking at home. Busy schedules are compelling parents to take the family out for dinner. The special occasion diner out used to be a jaunt to the white tablecloth, expensive place on the corner. Now the place on the corner has a white table cloth and is reasonably priced. And the food is probably pretty good if not great.

So when you hear about economic slowdowns and topic will begin appearing in the news more frequently in the months ahead, don´t panic and begin to shutter. Start to fine tune your operation. Build a good customer base. Get your customer´s names and addresses and email addresses. In time of economic downturn a strong marketing program that costs virtually nothing is a tremendous tool.

Another plus to opening or operating during an economic downturn- lease negotiations go better. Bring the most recent downturn article with you. It will help you in your negotiations. If you have an expansion on the boards, go for it.

















Although there seems to be a bit of a slowdown in restaurant profits, the expansion program many of the chains are planning is mind boggling. A headline in Nation´s Restaurant News last month shouted, "P.F. Chang´s continues expansion plans despite setbacks."

Analysts claim that the economy, classified as "lackluster", will slow consumer visits to the country´s restaurants. Claiming this will also eat into Chang´s single unit slowdown, they went on to claim that Chang´s will eventually begin to cannibalize existing units due to the expansion.

There is a definite lesson here and you don´t have to own a137 units to take heed: Don´t expand too close to home. If you have a successful restaurant, and you want to open another, either develop a second concept or move out of town- as far away as possible while still convenient to your operation.

The restaurant business will continue to be one of the major industries in the country. With 13 million employees, only the government employs more people. (I always thought it would be interesting to have a job swap week. The government employees run the restaurants, we run the government. Would the meals come out on time or would our waiters just put us on hold when trying to order?) And, although economic slowdowns have a direct effect on restaurants cream rises to the top.

A once special occasion event, dining out daily has now become as much of the American fabric as taking a daily shower. Fewer and fewer people are cooking at home. Busy schedules are compelling parents to take the family out for dinner. The special occasion diner out used to be a jaunt to the white tablecloth, expensive place on the corner. Now the place on the corner has a white table cloth and is reasonably priced. And the food is probably pretty good if not great.

So when you hear about economic slowdowns and topic will begin appearing in the news more frequently in the months ahead, don´t panic and begin to shutter. Start to fine tune your operation. Build a good customer base. Get your customer´s names and addresses and email addresses. In time of economic downturn a strong marketing program that costs virtually nothing is a tremendous tool.

Another plus to opening or operating during an economic downturn- lease negotiations go better. Bring the most recent downturn article with you. It will help you in your negotiations. If you have an expansion on the boards, go for it.

Remember, cream rises to the top. Nothing succeeds like success. And, tonight, millions of Americans are going to sleep dreaming about being in your shoes.