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Why do restaurant sales go down and how to avoid it?

Why do restaurant sales go down and how to avoid it?

If you constantly wonder why sales are falling in your restaurant but you still do not have a concrete answer, in this article we will share the main causes that cause a decrease in sales according to the experience of several businesses in the industry, as well as the strategies you can implement to counteract each one. Keep reading!

1. Arrival of new competitors

The arrival of new competitors, be it large brands with a high financial capacity or small food businesses in the vicinity, can put pressure on prices, costs and the necessary investment rate that a restaurant needs to compete, in addition to directly impacting on consumer preferences. 

Despite the importance of this factor in the restaurant industry, 60 percent of restaurant operators does not take into account what your competition does, in accordance with a study on restaurants from Playa del Carmen, one of the most important tourist destinations in Mexico.

Therefore, one of the first steps that must be taken to counteract this situation is analyze in more depth the market niche to which your restaurant belongs, which will allow you to take adequate measures to improve your products, service, delivery times and image, with which you can achieve an improvement in the perception of value of customers and, with this, increase your competitive advantage.

2. Lack of comprehensive administrative strategies

While providing quality products, services and improving customer relationships are the most used management strategies in restaurants, other important management strategies are often lost sight of such as the variation of the dishes in the menu, the development of new products and updating of services and supplier database. 

However, to know precisely where you need to improve, it is advisable to have a work that offers you key data, such as your products with the largest and least movement or the average consumption of your customers, from which you can make strategic administrative decisions to boost your sales in the short, medium and long term.

It may interest you: What makes a restaurant profitable? Interview with AMS Consultoría

3. Prices of dishes too high

Reasons why restaurant sales are down

While a customer may be willing to pay a high price to try something new or interesting, you will not necessarily pay it a second or third time If the product, service or experience was not as satisfactory as you expected, or if for that amount you could buy something better in another restaurant.

Therefore, it is important that you have a precise system to help you assign your prices considering all the factors that are at stake, such as the costs of your supplies, your fixed and variable expenses and the average ticket that your guests can pay. 

It may interest you: How to do recipe costing in a restaurant?

4. Decrease in the influx of diners

Although dining room service has been one of the most important in restaurant sales, nowadays situations such as the Covid-19 pandemic have shown how essential it is to diversify services and not depend only on the diner reaching up to your business.

Therefore, the adoption and improvement of modalities such as home delivery, drive thru and self-service, along with the adoption of new sales channels and platforms for interaction with diners, represent some of the most important alternatives to maintain a balance point of sales, avoid losses and even increase profits.

It may interest you: 6 online platforms to sell food at home

5. Low motivation of your work team

How to keep restaurant sales from going down

The levels of demand that work in a restaurant imposes can be extremely exhausting and stressful for employees, which is why they tend to easily fall into stages of demotivation that, instead of encouraging teamwork and generating income for them and for the business, it forces them to provide poor customer service and thereby decrease your sales.

Here are some of the strategies that you can implement to motivate your servers and collaborators are:

  • Bonuses and rewards for meeting goals, help with extra tasks, and so on.
  • Salary increase as sales increase.
  • Commissions or special benefits for positive customer comments.
  • Opportunities for training and professional growth.

6. Absence of loyalty programs

The large number of offers in the restaurant industry market makes it difficult for the consumer to always want to go to the same place, so it is not only enough to offer a good product and service, but it is essential to generate an effective loyalty strategy to convert to a visitor into a frequent customer.

To achieve this, you can implement a loyalty program through which you offer exclusive benefits to customers who have visited you more than five times, for example:

  • A frequent customer VIP card with points redeemable for products.
  • Benefits of alliances that your restaurant has with other businesses.
  • Courtesies on special days (birthdays, Christmas, etc.).

It may interest you: How to increase sales in a restaurant using technology

Decide to increase sales in your restaurant!

As you can see, the reasons why sales in a restaurant decrease can come from different areas, so they require strategies not only for investment, but also for possible structural changes in administration, staff training and even the acquisition of new technology. 

If you want to know how to implement these strategies and use the best tools to increase sales in your business, we invite you to subscribe to our newsletter to continue receiving valuable information week by week. We hope this article has provided you with the information you were looking for!


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