Is the worst over? Could the Stimulus Package finally be stimulating happy hours? Did the Obama plan benefit restaurant owners across the country? The jury is still out, but for many owners the past year has forced them to look at their business, make some changes, and ride the waves to a better, more efficient operation.
The hospitality industry as a whole was one of the hardest hit segments of the financial hurricane that swept across the globe, causing massive monetary destruction for businesses and personal nest eggs. But the Obama winds of change have made restaurant owners more focused on costs and expenses and profit and loss than they had been in prior years.
And now, the restaurant industry seems to be on the upswing. Although the signs may only be whispering future prosperity rather than shouting monumental business gains, the uptick can be related to President Obama's policies that enabled many to weather the storm.
The stimulus packages implemented by the administration saved businesses and jobs, while helping to inject cash into the economy. It also stimulated and changed the attitude of the country, which is a major part of any economic battle.
Many will say that since lines of credit dried up business was negatively affected. But, another way to look at the credit crunch was that it made business owners more creative and conscious about costs and waste.
Don Burks has experienced numerous economic and social changes since opening Randy's Steakhouse in Frisco, Texas 15 years ago. The owner of the 150 seat steakhouse has seen many restaurants open and fail since opening in 1995. However, nothing has compared to the last year.
"When credit lines dried up that took its toll on large chains and stopped their expansion. Some chains opened in Frisco and closed before I even knew they had opened. A lot of that had to do, I believe, with the fact that businesses couldn't get lines of credit," Burks said.
Although the administration inherited the downward spiral of financial forward motion, their reaction to the problems pulled the economy out of its tailspin. And this has helped -- and will continue to help -- the restaurant industry.
Even Burks, who is not an Obama supporter, does believe that the economy is getting better.
"I have seen a lot more people paying with American Express, which signifies business dinners. And, we are beginning to see our high-end wines move again. This is encouraging. I have to believe the economy is getting better," Burks said.
For the last decade, there has been an imbalance between restaurants and consumers. With an estimated 850,000 restaurants open across the country as of 2008 the industry was booming as almost anyone with a recipe file wanted to enter the game. Because of the recession, a percentage of these restaurants have closed and large chains that were overpowering single unit operators with huge portions and low prices stopped their territorial expansion to take time to reevaluate potential markets.
According to Rebecca Courtright, of Courtright's in Chicago, the slowdown in high-end wine sales enabled the restaurant to focus more on mid-tier wines. With over 12,000 wines in their cellar, they were able to pull from their inventory without having to replenish, having a positive effect on cash flow.
For Burks, guerilla marketing tactics have paid off. Once the operator realized the Obama stimulus package would not be an overnight fix he decided to print $25.00 gift certificates on four color postcards.
"I printed 10,000 cards, with a four color picture of the restaurant on the front. The back is black and white with a bit of history about Randy's and the offer. I gave a few hundred to the florist across the street and asked that he give them out with every birthday and anniversary arrangement. Usually, we get a two-percent return on gift certificates. With the florist certificate, I get almost an eight-percent return," Burks said. "It has really gotten us through the rough patch and not only works for the florist, but if a husband sends an arrangement to his wife for her birthday, and spends $50.00, he is getting $25.00 back. It's a great stimulus package promotion."
For Burks and Randy's Steakhouse, it appears everything may be coming up roses.
