CORE Business Analytics and IBISWorld Present: 

Food & Beverage in New York

Summary: decreases in revenue over the five years to 2020

Introduction

As bars and nightclubs both here in New York and across the US grapple with the challenges of COVID-19, one pre-COVID trend appears to have become even more prevalent: alcohol consumption at home rather than at bars and nightclubs has steadily gained in popularity.

The Bar and Nightclub Industry is highly sensitive to economic factors that affect the on-premise consumption of alcohol. Over the past five years, consumers became more selective about how they spent their disposable income. Consumer spending declined and discretionary leisure activities like visiting bars, nightclubs and drinking establishments were reduced or cut out. Some consumers opted to drink in their homes instead of visiting bars. Consumers who continued patronizing drinking establishments tended to visit them less, spent less when they did go out and often chose more affordable establishments.

US INDUSTRY STATE REPORT NY72241

The Industry at a Glance

Who are the bar and nightclub customers?

What are they buying?

Keys to Success for Operators

IBISWorld identifies 250 Key Success Factors for a business.  The most important for this industry are:

• Ability to quickly adopt new technology: Establishment operators should have appropriate levels of technology in areas such as stock control, which is a major cost area.

• Ability to control stock on hand: Operators must have control over stocks, particularly stock losses, and have sufficient stock in line with expected demand.

• Effective cost controls: Having effective cost controls and systems in place is essential because this is a relatively low profit margin industry.

• Must have license: Operators are required to have the appropriate licenses to operate and always meet the conditions of the licenses.

• Access to niche markets: It is important to have a very good understanding of the markets serviced by your location and customers’ changing needs.

The above are certainly valid considerations for bar operators, however, CBA believes COVID has created unique opportunities in the industry not mentioned by IBISWorld:

One of which would be the roll-out of convenient “to-go” service(s) featuring healthy, high quality, high margin, “to-go” specific menu items.

Another would be developing “house” recipes, sauces, and beverages for retail sales and home consumption.

CORE’s Keys to Success in Food & Beverage:

• Creativity reigns supreme.
  • Identifying your CORE clientele and closely aligning your menu items and service components with them will always be essential for success in the industry.  
  • But, a well executed food and beverage program that laces creativity throughout the customer experience will drive customer loyalty to new heights.  
  • Leaning on your employees to assist in generating these creative concepts not only provides you with a great source of information, but is also a great way to build team trust and cohesion.

• Openness to making adjustments is crucial.
  • Now empowered with creative ideas, it becomes critical to test and analyze where each idea is successful, and where it comes up short.
  • This is where having a goal in mind for each concept is integral. 
    1. Example: establishing a predetermined target sales increase for a particular item.
    2. Example: reducing ticket times by a certain percentage, etc.  
  •  If any task or process does not achieve the stated goal, operators must be open to adjusting as needed, even if that means trying a new concept. 

• Responsiveness to customer feedback.
  • Business analysis teaches us to consider how each element of business operations interact with one another to achieve the goal, with special consideration of the end customer perspective. 
  • Incorporating feedback mechanisms for your customers to utilize can provide valuable information about your operation.
  • Assess this feedback within the overall context of your business.  
    • Example: can you afford the suggestion?
    • Example: does the suggestion speak to a bigger issue? Etc.

• End goal optimization.
  • Having defined and well known goals will help create efficiencies and reduce operational waste.
  • Every subgoal must align with the operation’s mission.
  • One of the most important exercises a business owner can undertake is to
    “remove” themselves and assess the business from an “outsider’s” perspective.
  • By doing so owners and operators more readily identify points of weakness that require attention.  Being caught up in the day to day makes objectively reviewing operations more difficult. 

Thankfully, CORE Business Analytics, LLC exists to help you with all of the above stated concepts, as well as many others (don’t worry we didn’t spill all of our secrets 😉).  By objectively assessing your business needs, CBA will design and implement solutions specific to your unique business. 

If you are in the bar, nightclub, and/or restaurant industry, CORE Business Analytics can help greatly improve your operations. 

Contact CBA today!

We’ll catch you on the next CORE Thought!