5 Pressing Challenges Restaurants are Facing
The restaurant industry is one of the most competitive industries with numerous challenges. One of the main challenges is maintaining the quality and freshness of food, which is essential for attracting and retaining customers. Moreover, at the same time, restaurants must always be able to create attractive marketing campaigns and improve their menu and services to meet customers' evolving expectations to gain and maintain a competitive edge in the industry.
Here are the five urgent challenges that restaurant businesses must address to build a robust and efficient operating system, minimize mistakes, impress customers, and generate better sales and profits, enabling them to continue their stable growth.
1. Challenges in inventory management
Inventory management and planning for day-to-day operations are significant challenges, especially for large chain restaurants. The key is to manage the inventory of fresh ingredients efficiently and carefully to avoid wastage and stockouts that can cause lost sales opportunities. Besides, restaurant businesses must control various costs to maintain profitability and maintain the quality of products and ingredients to meet the store's standards. Therefore, inventory and supply chain management are the lifelines of restaurant businesses that require efficient management with precise calculations and predictions
Relying solely on manual labor to manage inventory can result in various aspects of errors. For example, incomprehensive inventory tracking can cause insufficient or misplaced replenishment, leading to stockouts and missing orders that are not delivered as planned can cause continuous disruption in operations. Additionally, when a business expands and has to handle more customers and a broader menu, relying solely on manual labor makes it difficult to scale operations to meet growing demand. Therefore, using manual labor alone is not sustainable for long-term business development.
The challenge of inventory management is crucial for businesses to urgently solve to avoid the impact on overall operational efficiency that may result in reduced customer satisfaction and business income.
2. Challenges in food waste
Research from the University of Arizona revealed that 11.3% of restaurant food becomes wasted, resulting in enormous costs that businesses have to bear. The food waste cost from the entire industry combined is more than $162 billion per year, leading to a loss of profits of more than $2 billion.
Food waste occurs at various stages of restaurant operations. For instance, inaccurate calculation of inventory replenishment results in wasted fresh ingredients. Moreover, in the food preparation process, only some parts of fresh ingredients are used, while garnishes become waste after serving. We can manage food waste from each step in different ways - creating new dishes from unused parts of ingredients, adjusting the amount of food on the plate to fit customers' eating behavior, and utilizing technology to manage inventory more accurately.
3. Challenges in maintaining customer relationships
Restaurant businesses are very competitive businesses. Therefore, maintaining customer relationships poses significant challenges for restaurant businesses, particularly for large restaurant chains that must uphold consistent food and service quality across all branches. Moreover, they must cater to each customer's unique needs in terms of price, time, and location.
Given the abundant restaurant options, customers can change their minds anytime. Therefore, the restaurant business must strive to address these challenges. They must understand customer preferences and behaviors, create marketing campaigns to attract and retain targeted customers, establish a loyalty program that offers compelling benefits, and deliver consistent and attentive services. Furthermore, restaurant owners need to customize these efforts to suit individual customers while meeting the needs of various customer segments.
Achieving these objectives requires leveraging data analytics to gain insights into customer preferences, ensuring standardized quality, and delivering exceptional experiences. While manual labor may not suffice, intelligent technology such as AI has the potential to help restaurants achieve these goals. Therefore, AI solutions offer a viable solution to these challenges.
4. Challenges in demand forecasting
In the era when social media can generate new trends overnight, customer demands have become more unpredictable than ever. For example, some restaurants may unwittingly go viral on the internet, resulting in an immediate surge in customer numbers that they may not prepare to handle. Additionally, certain dishes may suddenly become popular, causing restaurants that do not offer them to become obsolete. As a result, the responsibility of conducting accurate demand forecasting falls on restaurants. They must maximize their forecasting accuracy to scale their operations and avoid losing sales.
5. Challenges of increased freight rates
Restaurants face significant challenges related to increased transportation and freight rates, particularly in the post-pandemic era and business recovery phase, and logistics schedules become tight. This situation has resulted in logistics agents raising their freight rates. Logistics also represents one of the highest restaurant expenses, making the pressing challenge that needs immediate attention.
Applying intelligent technologies to supply chain management can help optimize replenishment decisions and reduce unwanted costs, offering a feasible solution to logistics expense management.
AI Ordering: A Solution to Pressing Restaurant Challenges
The AI Ordering solution can increase inventory management efficiency by utilizing intelligent AI technology to assist in replenishment decisions at the appropriate time and in the correct amount. This solution reduces costs and increases sales sustainably. It, thereby, enhances competitiveness in a highly competitive industry.
Forecast the demands accurately by utilizing AI to analyze comprehensive data and conduct inventory tracking to replenish the appropriate amount of ingredients. This approach helps avoid stockouts and lost sales while preventing overstocking that leads to waste and increased costs.
Utilize AI to manage and improve inventory replenishment decisions to satisfy customer needs and maintain customer relationships.
Reduce personnel resource costs and minimize human errors by leveraging AI to perform tasks more accurately.
Learn more about solutions for restaurants and retail from Sertis: https://www.sertiscorp.com/retail