Thursday, November 10, 2011 | Edited by Daniel Moores
||Analyst: Innovation and Pricing Key for Restaurants in 2012
The recovery from the recession may have stalled in 2011, but there will be ways for innovative restaurant operators to gain market share during the coming year, said Warren Solochek, vice president of client development for The NPD Group.
Solochek discussed the state of the restaurant industry during a recent webinar, "A Look Back at 2011 and a Look Ahead to 2012." John Glass, restaurant industry analyst for Morgan Stanley & Co., hosted the event.
Innovation crucial in 2012
Looking ahead into 2012, NPD projects consumers will remain price-conscious, meaning restaurant chains will have to be cautious in the price increases they consider in an environment with high commodity inflation.
"The restaurant industry has done a very good job of sensitizing American consumers to price, and we have done that via a lot of advertising and a lot of promotion that's been specific to price points," Solochek said. "That is going to suppress the opportunity that operators are going to have to take across-the-board pricing."
However, until employment improves, there’s little expectation for industry growth, he said, making business a game of stealing market share in the near term. Along with pricing strategies, menu innovation will remain critical to encouraging new visits, he added.
"Innovation is what will get guests to notice a chain and go there to try something new," he said. "Otherwise, the consideration set is just the same mish-mash."
Fast casual will continue to post stronger sales, given its strength in lunch, Solochek said.
"What fast-casual chains are offering truly resonates with consumers," he said. "It's not all about price; it's really about the price-value relationship."
Restaurants positioning themselves as an affordable option for eating at home can improve their price-value perceptions, Solochek said. He pointed out that quick-service restaurants' division of traffic shifted toward more off-premise occasions like drive-thru, carryout and delivery in the third quarter of 2011, and the incidence in which those meals were eaten at home increased 3 percent.
"People still don't want to cook at home and would prefer not to prep," Solochek said. "You still have to have food that's portable and that will stay hot. If it's delivery, it's got to be delivered within a certain amount of time."
Check averages, not traffic, rising in 2011
Total industry sales have grown over the past six quarters, starting with the period beginning in March 2010, Solochek pointed out. But lately it has been only because of modest growth in the average check as operators cautiously increase menu prices. For the third quarter of 2011, ended Aug. 31, total sales increased 1.3 percent.
"I don't think there is any reason to believe that the industry's dollar growth rate is going to get much above 1.5 percent in the next year," Solochek said. "As long as the economy is not very strong, people are going to continue to trade down to less expensive options."
However, full-service restaurants still are facing significant traffic declines, Solochek said, and high unemployment continues to put pressure on lunch sales. Total visits are only back up to 2005 levels, he said.
For the third quarter of 2011, total industry traffic slid 0.6 percent, the second consecutive quarterly decline.
In the most recent quarter, traffic in the fast-casual segment was one of few bright spots, increasing 5 percent. That segment's outperformance had a lot to do with unit growth, Solochek said, as "this is one of the few places in the industry where we're seeing a decent number of units being built."
The majority of restaurant categories that grew traffic were in the quick-service segment, led by coffee-doughnut-or-bagel concepts, which increased guest counts by 4 percent. Hamburger chains grew traffic only by 1 percent.
Similarly, casual-dining bar-and-grill chains' guest counts only increased 1 percent. Traffic increased for parties with children and for visits that included a deal or coupon, Solochek noted.
August was a particularly bad month for traffic, as guest counts decreased 2 percent overall, reflecting declines of 1 percent in quick service, 6 percent at midscale restaurants, and 2 percent in casual dining.
"If you think back to August, the biggest impact on this number was what was happening in Washington," Solochek said. "Essentially, there was gridlock and a threat that the government was going to shut down. People were worried about whether they could or should spend money...and you saw those cutbacks."
On the bright side for casual diners, traffic for parties with children has risen in the low single digits each of the past four quarters, increasing 2 percent in the third quarter.
"This is an important trend for casual dining," Solochek said. “During the recession in 2008 and 2009, we saw a dramatic cutback in visits with adults coming in with their kids. We're slowly but steadily seeing these people come back."
(Source: Nation's Restaurant News, 11/03/11)
||More Retailers Attack at 'Black Midnight'
Holiday shoppers, say hello to Black Midnight.
Best Buy Co. is joining the list of big store chains opening at midnight after Thanksgiving this year in hopes of getting a jump on the competition, following recent announcements by Target Corp., Macy's Inc. and Kohl's Corp.
Best Buy Chief Executive Brian Dunn, said he felt forced to "make a very difficult decision" and open at midnight because rival retailers were doing so, though the decision was controversial inside the company.
"I feel terrible," said Mr. Dunn, who was once a store manager, speaking during a conference in San Francisco. "It will change some Thanksgiving plans for our employees. It certainly changes mine."
Best Buy's move -- significant since the retailer specializes in big-ticket electronics likely to lure shoppers in the predawn hours -- leaves Wal-Mart Stores Inc. as one of the last mass merchants that has not announced it is offering "door-buster" specials as soon as the clock strikes 12 on Nov. 25.
Wal-Mart wouldn't disclose its plans for this year, a spokesman said. But it has typically held off on selling its most hyped specials until 5 a.m. the morning after Thanksgiving, on what is known among retailers as "Black Friday."
U.S. retailers traditionally considered Thanksgiving a de-militarized zone of sorts in their annual skirmish for shoppers' holiday dollars. But that has eroded over the past decade as more chains have extended hours and advertised early specials before Thanksgiving.
Promotions weeks or even months in advance are now commonplace; for example, Wal-Mart held an early Black Friday style "Super Saturday" sale last weekend featuring free cupcakes and discounted toys and gadgets.
Some retail experts say that store chains are fighting a losing battle to prolong a shopping rite that looks increasingly antiquated compared with the daily deals and flash sales offered by online rivals such as Amazon.com Inc.
"Once one retailer goes early, the rest feel obligated to follow, and you have to wonder what gain there is for any of them," said Joel Bines, managing director of the global retail practice at consultancy AlixPartners.
Many Wal-Mart stores are open 24 hours, and others opened at midnight on Black Friday last year to sell toys. But the company has thus far postponed selling its discounted flat-screen televisions and other mega deals until just before dawn.
Toys "R" Us Inc. last year opened its doors on Thanksgiving night at 10 p.m., and reportedly will do so again this year. Walt Disney Co., which has opened some Disney Store locations at midnight on Black Friday for several years, said it is expanding early openings this year to 150 stores. Several retailers now open on Thanksgiving Day itself, including Gap Inc. and Sears Holdings Corp., and the moves by others to start the official Black Friday scramble at midnight mean that more deal seekers will now leave families and start lining up hours earlier on turkey day.
Best Buy, which hopes to reverse five consecutive quarters of sales declines at U.S. stores open at least 14 months, said its early Black Friday activities would actually begin late Thanksgiving night at 9 p.m. with what Mr. Dunn said will be a movie screening of "Harry Potter and the Deathly Hallows -- Part 2," which will be released on video Nov. 11.
Jane Anne Jarka, an inveterate Black Friday shopping ninja, said the shift to midnight openings is fine by her. The Garland, Texas, mother of two boys doesn't think it crowds into her holiday, she said, because she always gets dinner done early in order to map out her shopping route, and finds it difficult to sleep before hitting stores.
"I get so anxious," she said, "so this is better for me."
(Source: The Wall Street Journal, 11/07/11)
||Survey Predicts Top Fitness Trends for 2012
Zumba is in and Pilates is out, according to more than 2,600 fitness professionals who completed an American College of Sports Medicine survey of the top fitness trends for 2012. The survey results were released in the "Worldwide Survey of Fitness Trends for 2012" article published in the November/December issue of ACSM's Health & Fitness Journal.
Zumba (and other dance workouts) and outdoor activities both made their debuts in the top 20 this year. Zumba and other dance workouts ranked ninth, and outdoor activities ranked 14th.
"Zumba and other dance workouts first appeared on the list of potential trends in 2010, but this is the first year Zumba has made the top 20," said Walter R. Thompson, Ph.D., FACSM, the lead author of the survey. "While Zumba has experienced a rapid surge in popularity in the past year, future surveys will indicate if Zumba is truly a trend or simply a fad."
Educated and experienced fitness professionals claimed the top spot in 2012 for the fifth consecutive year. Outcome measurements and clinical integration/medical fitness both dropped out of the top 20 this year. Outcome measurements, a way to quantify progress in clubs and wellness programs, had a five-year run in the top 20 and ranked 13th in 2011. Clinical integration/medical fitness, perhaps tied to last year's national health care reform, only appeared in the top 20 in 2011 and claimed 18th place. Pilates, which first dropped out of the top 20 for 2011, remained off the list for 2012.
"The U.S. Department of Labor's Bureau of Labor Statistics is predicting that jobs for fitness workers will increase much faster than other occupations," said Thompson, an exercise physiologist at Georgia State University, a Fellow of ACSM and a spokesperson for the ACSM American Fitness IndexTM. "Educated and experienced fitness professionals -- such as those with professional certifications -- will have the best chances to get new jobs in an increasingly competitive field."
The survey, now in its sixth year, was completed by 2,620 health and fitness professionals worldwide (many certified by ACSM) and was designed to reveal trends in various fitness environments. Thirty-seven potential trends were given as choices, and the top 20 were ranked and published by ACSM.
The top ten fitness trends predicted for 2012 are:
Educated and experienced fitness professionals. Given the large number of organizations offering health and fitness certifications, it's important that consumers choose professionals certified through programs that are accredited by the National Commission for Certifying Agencies (NCCA), such as those offered by ACSM.
Strength training. Strength training remains a central emphasis for many health clubs. Incorporating strength training is an essential part of a complete physical activity program for all physical activity levels and genders.
Fitness programs for older adults. As the baby boom generation ages into retirement, some of these people have more discretionary money than their younger counterparts. Therefore, many health and fitness professionals are taking the time to create age-appropriate fitness programs to keep older adults healthy and active.
Exercise and weight loss. In addition to nutrition, exercise is a key component of a proper weight loss program. Health and fitness professionals who provide weight loss programs are increasingly incorporating regular exercise and caloric restriction for better weight control in their clients.
Children and obesity. With childhood obesity growing at an alarming rate, health and fitness professionals see the epidemic as an opportunity to create programs tailored to overweight and obese children. Solving the problem of childhood obesity will have an impact on the health care industry today and for years to come.
Personal training. More and more students are majoring in kinesiology, which indicates that students are preparing themselves for careers in allied health fields such as personal training. Education, training and proper credentialing for personal trainers have become increasingly important to the health and fitness facilities that employ them.
Core training. Distinct from strength training, core training specifically emphasizes conditioning of the middle-body muscles, including the pelvis, lower back, hips and abdomen -- all of which provide needed support for the spine.
Group personal training. In challenging economic times, many personal trainers are offering group training options. Training two or three people at once makes economic sense for both the trainer and the clients.
Zumba and other dance workouts. A workout that requires energy and enthusiasm, Zumba combines Latin rhythms with interval-type exercise and resistance training.
Functional fitness. This is a trend toward using strength training to improve balance and ease of daily living. Functional fitness and special fitness programs for older adults are closely related.
(Source: SportsOneSource Media, 10/31/11)
Daily Sales Tip: Impressing Your Manager
Most salespeople take pride in determining their own success. But even mavericks must report to someone. Here are six simple rules to help you make the most of your relationship with your boss:
1. Report frequently. Bosses like to know what's going on at all times. Always hand in your reports and other papework on time. And look for ways to communicate informally, too.
2. Be candid. No one likes surprises. If you discover a problem pending, don't try to sweep it under the rug. Discuss the situation -- before your boss starts looking for someone to blame.
3. Be resourceful. Never use your manager as a dumping ground for problems. Whenever you report a problem, always suggest at least one solution.
4. Be straightforward. Honesty never hurts. So if you notice a policy or plan that doesn't seem right, say so.
5. Be willing. You're not going to win every time. If your boss overrules you, do the best you can to make the policy or plan work, despite your reservations.
6. Succeed. Last, but far from least: Salespeople who meet their goals and beat their quotas are the most likely to attract their boss's positive attention.
Source: Sales author Gene Garofalo