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Spoiler alert: I’m a total data geek. I LOVE to analyze and dig into data, learning what drives people and how it all ties together. So it’s no surprise that I was on the edge of my seat when Wally Doolin and Joel Naroff kicked off the 20th Global Best Practices Conference by sharing data and expert analysis on where the restaurant industry has been and where its going.
Overall, the outlook is positive! And not in that, “Just hang in there and eventually things will look up,” kind of way. They were genuinely optimistic about 2015. It was so refreshing to hear after years of recessionary struggle. Consumer sentiment is the best it’s been since before the recession; disposable income is on the rise. However, it’s never been more complex to run a business in the history of time than it is right now.
Do I have your attention? Wally acknowledged that the digital age continues to shape the face of commerce. We have access to more data than we’ve ever had before. When it comes to running a business, it’s easy to become inundated and overwhelmed with the sheer volume of information we see. The only way to make it useful is to scale it down into insights that bring value and knowledge to your business. If your solution providers are giving you data instead of knowledge, now is the time to rethink that arrangement.
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Joel Naroff, the most entertaining economist I’ve ever seen, had an interesting forecast full of encouragement – encouraging us to get prepared for labor shortages and encouraging us to pay attention to what will keep employees happy before they leave. Business people make the worst mistakes when they don’t understand that change is coming or is already here – when we think that the strong or the weak times are permanent.
We went through an extremely long period of sluggish growth. It has conditioned us to change our perspectives. Now it’s finally getting stronger. That means jobs are growing as well. In fact, 3 million jobs are expected to be created in 2015! As we close in on full employment, there are huge implications for the labor market. People are looking for jobs they WANT to do. This is a real change in the overall psychology of our country and the labor metrics reflect it. Consumers feel more confident because they feel like they can find another job. They are coming out of their shells after spending 5-6 years in the “turtle” position.
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It’s really created a “Good News, Bad News” situation for our industry. The good news is that consumers are finally spending again. The dollar is stronger, which means that food costs should be cheaper this year. This same confidence and shift in psychology means that labor shortages will increase. Businesses have been operating with the thought or condition that says, “I can get what I want for what I’m willing to pay.” This will no longer be the case. Typically, as this growth happens, we can raise wages slowly, but because of the recession, we haven’t raised wages in so long, that the reservoir will break. Your wage increases may go up faster than you think and the best thing you can do is be prepared for them.
Being the optimist that he is, Joel certainly didn’t leave us on that cautionary note. He added some good news about millennials. As wages go up, that’s going to be the generation that will receive the increase in earnings. And millennials think that eating out is a necessity, not a luxury. More income ultimately leads to more spending. There’s a lot of work ahead of us, but with these indicators on our radar, we are equipped to handle it.