Economic Forecast: Restaurants

After four years of what SoDel Concepts President Scott Kammerer calls "unparalleled growth," he expects to focus on "all aspects of quality and services in our [11] restaurants to make sure our standards remain high, and our customers are having the best experience possible."

As restaurateurs look ahead at 2020, there is general agreement that beyond focusing on the customer experience, the industry will grapple with these challenges: 

• Retaining and attracting employees in the face of potential legislative action to raise the state minimum wage and competition among restaurants for the best people.
• A millennial-driven increase in the use of delivery services rather than visiting actual restaurants.
• Struggles for new restaurants (and ones that want to expand) with inefficient permitting processes.

The perennial challenge of retaining and attracting good employees is not going away any time soon," said Carrie Leishman, president and CEO of the Delaware Restaurant Association. "I think we'll see more out-of-the-box thinking in terms of employee benefits and quality of life."

But Leishman says she believes that government mandates such as increased minimum wage are the "wrong way to approach employee retention. There's a battle for good employees and we're seeing more creative ways that restaurants are engaging their current workforce "“ higher wages, better benefits, and a positive company culture "“ but looking at new places to find employees."

Delaware is a state where you often hear the hospitality industry talk about the difficulty finding people. Robbie Jester of High 5 Hospitality told DBT that he "deplores" the idea that it's tough. 

"You get caught in the busy trap," he said prior to a food competition with inmates at the James T. Vaughn Correctional Center, one of the places where he is spending much of his time looking in places others might not be looking. "People with a justice-involved background have dedication, gratitude, and a sense of humility," Jester said. "The regimentation of prison plays a large part, as does an ability to have a solid conversation."

Two Stones Pub Owner Michael Stiglitz says "the lack of qualified employees as we grow" is what keeps him awake at night.

"If you can't do the job with a phone in your hand, no one wants to," he said. "It's very frustrating as the new youth move into "˜silent' socializing and less face-to-face interaction. This alone lessens the need for "lunch spots" and "happy hour" get-togethers."

Stiglitz said success for Two Stones includes online ordering and increased web visibility/awareness and marketing, with a major focus on training and employee retention. The biggest barrier: Forced inflating of wages and the availability of less skilled employees.

Grain Craft Bar + Kitchen is focused on increasing 2020 revenue from its existing footprint of three restaurants (with a new location in Lewes coming in 2020) through online ordering, off-site catering, and adding new day parts as part of its effort to leverage its existing infrastructure and team, said co-owner Lee Mikles.

Mikles added that "opening Grain on the Rocks will be a critical focus for us," and his sleepless nights are focused on leadership staffing. "We are trying to grow leaders to support our growth to Lewes and internal growth. We need to have a team that knows the Grain brand at this new location. "

Leishman also believes Delaware will see new restaurants opening outside downtown Wilmington and Rehoboth Beach.

"We're seeing restaurants as catalysts for economic development in non-traditional areas like Milford and Middletown," she said, mentioning Crooked Hammock and Two Stones in Middletown. "Successful restaurant groups will seize on opportunities in these non-traditional towns." 

By Peter Osborne

DBT Editor