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'Tis the season for increased restaurants sales — if you can control food, labor costs

Although it may sound a bit Scrooge-like, 'tis the season for increased restaurants sales, but mismanaging increased food and labor costs can leave companies feeling like they were left off the nice list.

December 14, 2018 by Cherryh Cansler — Editor, FastCasual.com

Although it may sound a bit Scrooge-like, 'tis the season for increased restaurants sales. In fact, a recent poll found that the fourth quarter is the most profitable time of the year for one-third of the 300 U.S. small businesses it surveyed. That's the good news; the bad news is that the same study also revealed that 42 percent of small businesses reported that costs increased as high as 25 percent in the same time period.  

"The data shows that small business owners have a great opportunity in the last three months of the year to increase profits, but it requires careful cash-flow planning," said Scott Rosenberg, CFO of Kabbage, a global financial services company that conducted the survey. "As a former retail industry executive, I've seen first-hand how seasonality can turn a good year into a great year and how critical it is to be financially prepared to manage climbing costs to reach higher profits." 

Cinnabon President Kristen Hartman said the holidays are a critical time of the year when it comes to maintaining the bottom line at the Atlanta-based company.

"With many of our locations mall-based, we see a rise in sales due to the increase in shopping traffic," she said in an interview with FastCasual. "Our core business will always be our bakeries, but as our consumer needs and demands have changed, we've added off-premises layers to ensure we are available when and where our guests want us to be."

Don't underestimate the value of a holiday catering offering
One of those layers includes a catering platform, which makes it easy for hosts to serve Cinnabon baked goods and beverages in party-size portions. 

"Our offerings in both size and variety are versatile as they serve many dayparts and occasions, from breakfast events to snack breaks or dessert spreads," Hartman said. "EZCater has been a terrific partner for us as a leader in the catering space."

Anthony Pigliacampo, co-founder of Denver-based Modern Market Eatery, also sees an increase in off-site sales during the holiday season. 

"With holiday parties and team lunches, the number of companies we see providing catered meals for their employees increases," he said in an interview with FastCasual. "We also see a significant increase in delivery orders as well due to the winter weather in the markets we serve."

To get as much traction from catering as possible, Modern Market launched a hot-held Homestyle Buffet catering offering in late October in all of its nearly 30 locations. 

"Our central customer service representatives contacted our clients by phone to inform them of the new offering," Pigliacampo said. "The timing of the release of this item, our outreach, and our email and social marketing efforts have made this our most successful catering promotion of 2018."

As the Kabbage study pointed out, however, an increase in business leads to increased labor and food costs, so balancing those numbers is imperative for any brand hoping to finish the year in the black. Hartman said the sales they bring in as well as the support and buying power Cinnabon receives from its parent company — Focus Brands — help offset labor and foods costs, which makes the busy holiday season worthwhile

"Through the work of Focus Brands and our supply chain team, we are able to provide economic solutions to our cost of goods year-round," Hartman said. "In terms of labor, we increase staffing for the holiday season to meet our increase in traffic."

Don't settle for standard marketing messages
Another way to increase holiday sales without spending a lot is implementing more effective marketing strategies, said Dan Goldstein, president and owner of Page 1 Solutions, a full-service digital marketing agency.

"Mail a special holiday offer to your customer database, which you should be collecting throughout the year," he said in an interview with FastCasual. "Target groups — office holiday parties, events and family holiday get-togethers — with special discounts. For example, one free meal for every five diners at your table. A great way to promote this would be a direct email campaign to all of the local businesses in your area."

The goal should be to create special offers to compete with Groupon without having to pay the Groupon fees.

Some of those techniques, including a focus on e-commerce gifting, have worked for Cinnabon.

"Cinnabon fans can now gift beautifully packaged cinnamon rolls with overnight shipping across the U.S.," Hartman said. "Our guests enjoy sharing their love of Cinnabon with friends and family and our gifting platform makes it easy to do that, even if the loved one is across the country."

The chain also provides bounce-back coupons for guests who purchase during the holiday season as a thank you for their loyalty. 

"We also offer specialty in-bakery packaging that showcases our products in a gifting style complete with holiday theming and our local bakery teams get out in the community for holiday events," Hartman said. "Knowing how tightly woven Cinnabon is to the holidays, our team adds a little magic to our offerings during this time."

While there is no single right way to market around the holidays, Goldstein said restaurants should consider the following:

1. Launching a paid social media campaign (Facebook and Instagram for most audiences) targeting potential customers. "Make sure you have a good database or you narrow down the reach of your campaign so that it only targets people in the right demographic groups and is limited geographically to your potential customers," he said.
2. Adding a geofence display ad campaign targeting people who are within a very narrowly defined area, f example, people leaving a movie theater at certain times
3. Creating an enticing offer. 

"From social media to special offers, there are many ways for a business to market their services and products around the holidays," Goldstein said. "However, boilerplate messages and standard ads don't help your business stand out. Superior marketing strategies for the holiday season combine festive messaging with content and collateral that capitalizes on consumer trends, questions, concerns and goals for the end of the year, all while conveying a consistent and engaging brand identity for the business."

Cover photo: iStock
 

About Cherryh Cansler

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Cherryh Cansler is VP of Events for Networld Media Group and publisher of FastCasual.com. She has been covering the restaurant industry since 2012. Her byline has appeared in Forbes, The Kansas City Star and American Fitness magazine, among many others.

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