Sunday, July 12, 2009
Food, Q&A

A full plate

Ron Wolf weighs in on the state of the Georgia Restaurant Industry


By Hope S. Philbrick

Beyond feeding those not in the mood to cook at home, Georgia’s restaurants are an important part of the state’s economy: The more than 15,000 restaurants employ 10 percent of the state’s population and are projected to register $14.2 billion in sales in 2009. For insight into how the nation’s current economy is impacting Georgia’s restaurateurs, The Sunday Paper called Ron Wolf, chief executive officer of the Georgia Restaurant Association.

 How are restaurateurs coping in this economy?

 That’s the word: coping. The reality is that in each of the segments—fast food, casual dining, fine dining—we’re feeling it. However, while a number of restaurants are seriously struggling, some are weathering it fairly well. There are no blanket assessments to be made because not everyone is hurting. Clearly, though, you take a look at the economy and know that discretionary spending is down and yes, we are feeling this.

What are some keys to success?

There’s more focus on service—to attract guests and keep them. There are so many truly innovative and not-so-innovative things being done. Promotions from traditional buy one/get one and discounts to creative three- or four-course prix fixe menus, which help with perception of value. There’s a resurgence of early-bird specials, which help build customers at front-end hours. There are smaller portions at smaller prices, which address the popular trend toward eating healthy. There’s non-traditional feet-on-the-street marketing and all the new technology like Facebook and Twitter, which helps reach out to customers and potential customers.

If there’s an upside to this downside, it’s that we’re all suffering. Restaurateurs are renegotiating leases, insurance and other forms of overhead, which is an excellent thing to do because $1,000 saved goes straight to the bottom line. Now is a good time to ask, “Do we have the right staff? Are we rewarding the right people?” There are a lot of things we can do to stay afloat and, to some degree, prosper.

The National Restaurant Association did a study not long ago and found that seven out of 10 Americans consider dining out an integral part of their life. We can’t do away with it; if there are fewer guest visits, we need to maximize those visits.

Is the ratio of restaurant openings to closings significantly different this year?

Closings are up 25 percent over last year. You’ll see a slowing down of openings.

Is job loss in the restaurant industry greater this year?

It is, but for a number of reasons. We’re always going to be a major employer. When you overlay the job loss in our industry against job loss in the overall economy, we’re faring much better. There are so many factors restaurants deal with: Wholesale food prices are the highest they’ve been in over three decades, there have been multiple minimum-wage increases, the cost of benefits has been going up, and the price of gas is rising. Our ability to raise prices is very marginal. We need to minimize overhead without adversely impacting the guest experience. Some of our restaurants are doing that remarkably well.

What’s your economic forecast for the restaurant industry?

Even if things start to improve in a number of sectors, there’s a delayed impact on our industry. We’ve got to get people back to work, need cash to flow again, build new trust in spending money. I’m not an economist and don’t have data, but as I look instinctively at the recovery, I don’t see any movement until the end of the year to 18 months. What we need more than anything is a dose of optimism. Customers need to see things that look better, and then they can come out of their shells. We need to move away from the doom and gloom. Things could be worse: We could be Detroit or California. I think Georgia is fine. It’s a tough time, but restaurant operators are an incredibly resilient, hardy lot. SP