Business Mistakes: How To Lose Customers In The Food Service Industry

In a volatile economy such as our current state, businesses must be wary of losing or alienating customers. Even regular, loyal customers will or can bend only so much. If your company is in the food service industry, you’re being hit hard as once loyal customers are no longer eating out, and when they do, they do less often and think twice about what they want to spend.

There are only two types or restaurants making it in this economy; cheap food and very expensive food. Think of it this way, Morton’s will continue to succeed as their patrons are usually very well off, and not as impacted by the economic conditions. Cheap restaurants are making it as more and more middle-class restaurant goers are now cutting their spending budget. So, it’s the middle of the road restaurants that are struggling to get by. It’s the McCormick’s of the world.

So, what are these middle of the road restaurants to do? Well, for the most part, they are faced with one of three choices: (a) they can lower the quality of the food and reduce the portion size while keeping costs the same, (b) they can reduce the quantity while keeping prices the same, or (c) they can increase the prices slightly while they keep the quality the same. Of course, there can be any combination of the aforementioned choices, but predominately these are the choices they’re faced with.

As food prices continue to soar and there seems to be no end in sight, profit margins are not what they used to be. Unlike traditional service based businesses, restaurants do have the luxury of increasing service quality to maintain the existing customer base. This is due in large part as eating out is thought of as an unnecessary expense. In fact, many can purchase better quality food at say, Whole Foods and pay less than eating out. However, not all is grim for restaurant owners.

Most people are willing to pay a little extra to maintain quality on both the food level as well as the service level, thus by maintaining excellent customer service and continuing to serve the food quality your customers have come to expect, you’ll most likely survive this market downturn. However, any decrease in one of the aforementioned items will result in decreased business.

To all restaurant owners, please keep the quality of the food and level of service consistent, or you’ll not only lose my business, but many others as well. Increase the prices or reduce the portion size, but never sacrifice quality for the sake of a dollar or two.

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