Excessive Supership Population

Cheers and high-fives to all the foodies out there this fine Saturday! 🍽️🥧🍕

Crazy story, my kiddo's a superhero nut! She's convinced ol' Supes is the kryptonite to the other weirdos, and her faves besides the Big Blue Boy Scout are Spidey, Captain A, and Hulk (guess she's got a bit of Dad's green gene).

We ain't got no blockbuster movies yet, but she's got all the action figures, costumes, and toys under the sun. Good times!

Speaking of sun, there's been a debate floating around about superhero movies being beyond saturated. Seventy-five percent of people in one poll thought so, while another claimed the oversaturation statements were premature, with the bulk of superhero films appearing in the last decade and a half.

Not my jam, but I figured I'd weigh in on something else more relevant to foodies: the restaurant industry!

'#Murica's market is overflowing with eateries, and the deets are grim. Did you know the slaughterhouse rate for restaurants is over 60% within the first year… and a whopping 80% within the first five? That's a 20% success rate! OK, the urban myth about 90% failing is just that – a myth, but the facts are still gnarly!

Why's the business so risky? Reasons range from clueless operators, poor locations, crappy pricing, burly costs, nonexistent marketing, absentee bosses, high employee turnover, inconsistent quality, and painful menu issues.

I know y'all know I love a good game show, so let's do a quick round of "Family Feud"! Here's the question: What are the biggest issues and challenges restaurants face?

Shoddy customer service
Runaway employee turnover
Frustrating supply chain and procurement
Heavy labor costs
Religious competition

Long-time readers might be wondering, hey, what's with that last answer, buddy? Well, the fierce competition in the restaurant business is a stone-cold fact, and I believe smart tech can address plenty of challenges, but it won't make Peep Dawg or your favorite eatery the only game in town.

Starting a restaurant isn't a mission to recruit 1,000 new wide-eyed diners; you're chasing after 1,000 fans from other spots. Sorry, not sorry, that's the game.

I might sound like a broken record when I talk about labor costs and the woes of supply chains, but let's be clear: these problems consistently rank as the top challenges faced by restaurant operators all over the developed world. So when a new answer ranks as number one in a survey, what gives?

Was I holding back? Heck no! The competition and market saturation are just par for the course, and technology will help, but it won't vanquish competition or bar newcomers.

So, you wanna open a new restaurant? Known enemy notwithstanding, your goal ain't to attract 1,000 new customers; you're aiming to swipe 1,000 hungry fellow diners from Sherry Spaghetti and Co.

The restaurant scene's competitive, lemme tell ya. Folks call it soft-hearted, but let's not be fooled; it's a fierce world, b/c the market's absolutely saturated.

Chefs've got their fair share of flak thrown their way, from being too creative to not being creative enough, from bad management to stifling staff, you name it.

The primary cause of restaurant failure? Too many choices, which reduces pricing power, fuels employee churn, and leaves us vulnerable to the smorgasbord of vendors we gotta deal with.

You know what pushed the restaurant game to the point of market oversaturation? A massive spike in double-income families during the late 1960s. When there's less time to shop and cook at home, the industry does its best to keep up, opening up new spots, experimenting with new cuisines, and creating innovative business models.

In 2022, food-away-from-home spending accounted for a whopping 56% of total food expenditures! COVID-19 had a wild impact on food prices, creating the biggest leap in the amount of household income spent on food in decades!

All this food expenditure news ties back to the saturated market: population growth plus an ever-expanding range of dining options means supply exceeds demand. We're studying Econ 101!

So welcome to the dystopian wasteland that is the saturated restaurant industry – but don't despair, friends! Don't confuse kindness for weakness; this world is cutthroat, but only because it's oversupplied.

And remember, you're a restaurateur, so grin and bear the negative feedback; some of it might even be deserved! 😂

So, why do restaurants fail? Well, here are some common reasons:

Inexperienced operators
Terrible locations
Upside-down pricing
Inflated costs
Negligible marketing
Absentee bosses
High turnover among employees
Contradictory food quality
DOA menu issues

We hope our insights have enlightened your culinary curiosity! Keep an eye out for more insightful looks inside the restaurant world.

P.S. - If you're a tech company exec, remember: Prime costs are the lifeblood of restaurants, and if your tech's not addressing food and labor costs (and the KPIs associated with them), you might be flogging a dead horse. Talk to us if you want to create tech that takes some of the sting outta market saturation!

The guest experience is crucial in the oversaturated restaurant industry, as it helps differentiate one dining establishment from another.
Regarding food service, managing prime costs, such as food and labor, is essential for a restaurant's success, especially in the face of market saturation.
To stay ahead in the competitive restaurant landscape, technology plays a crucial role in addressing various challenges, including supply chain management and procurement.
Accessibility, both in terms of location and access to finance, can significantly impact a restaurant's ability to thrive in a saturated market.
Investing in education-and-self-development, leadership, and business strategy is vital for those looking to break into the competitive restaurant industry.
Entertainment, sports, and lifestyle establishments are potential portfolio companies for tech businesses aiming to innovate and address the challenges faced by the restaurant industry.
Podcasts that focus on the restaurant industry can provide valuable insights for operators, investors, and anyone interested in the food service sector.
The restaurant industry is a blend of business, technology, and creative pursuits, such as culinary arts and hospitality, making it a dynamic and exciting field for those with diverse interests.