Bring It On
As summer is getting into full swing here in Charleston, the Charleston Hospitality Group and Hospitality Industry at large is riding the wave of post pandemic tourism and facing the challenges inherent with that.
Sam Mustafa, CEO of Charleston Hospitality Group shares his perspective.
As more people become more comfortable with gathering, traveling and resuming pre-pandemic activities, our restaurants at Charleston Hospitality Group have faced head-on the challenges that come with getting back to “normal”.
From food supply chain issues (inflation and availability) to worker shortages, summer 2021 has been interesting to say the least. Make no mistake, the Hospitality Industry is in for a sea change with how it operates and Charleston Hospitality Group has been making the necessary adjustments to keep up with the increased demands from our consumers.
The Bullwhip Effect Or the Backlash Effect? Take Your Pick.
The restaurant industry is seeing what is called the bullwhip effect, where restaurants that pulled back their operations during COVID seek to increase supply, and profits as guests return for dine-in options. It has not been as easy as it seems. Now that our country is open, food suppliers and logistics companies are scrambling to keep up. In addition, national labor shortages are affecting the supply industry which has driven up our operational expenses, along with fuel and delivery costs.
If that didn’t pose a great challenge, these labor shortages can also be found locally in Charleston’s food and beverage workers. Many people still have not returned to work due to government funding, lingering fears that the pandemic has brought, and workers who have left the industry indefinitely. Where one domino falls, the other falls with it.
As a result, we have seen an increase in the cost of food, skyrocketing as high as 150-200%. For example, chicken wings, if they are available, are almost 4 times the cost they were in the winter. Due to this change, we have had to increase our menu pricing and remove happy hour promotions. An example of this can be seen at two of our restaurants, Queology and Honkytonk Saloon, where we offered discounted chicken wings during Happy Hour and Thursday nights. You can imagine that the regular Happy Hour and Thursday night crowd at these restaurants were not too happy with this change.
What our consumer community is reluctant to see is that as less product is transferred to the wholesaler, less product makes it to the retailer and less product makes it to the end user, the restaurant buyer (us). When it does make its way down the pipeline to us, it is often at a significantly higher price. As a result, we have had to increase our menu pricing for certain items and our guests have had to take the hit. Unfortunately, this has left us with some disgruntled customers.
So no, it is not as simple as raising prices on the consumer since there is a finite amount of free capital.
So What Is A Business To Do?
We Stay Positive. We Get Creative. We Do Whatever It Takes.
Over the past year, Charleston Hospitality Group has utilized the pandemic as a time to give back to the community and innovate our offerings in our restaurant brands. Through our charitable initiatives and our Full Belly, Full Hearts campaign, our restaurant group has been able to serve over 10,000 meals to those who were left jobless in March 2020. In addition, we have also partnered with local hospitals, such as MUSC Hollings Cancer Center and donated to their research and strides made for cancer.
Necessity is the mother of invention. Where we have to adapt is where we also have to get creative. We see this opportunity with our menus and offerings across all of our restaurant brands. We anticipate, and trends are showing that our industry’s restaurants will see a move from fixed menus to daily menus. This transition allows chefs and managers to come up with flexible and delicious options, while also being mindful of the consumer’s pocketbook.
We will also anticipate menu changes to reflect products and restaurant innovations. This includes trying new products made locally by smaller businesses that are easier to obtain and implementing new restaurant innovations to keep our offerings prepared in a unique way. This provides us with a solution to keep all our products fresh and up-to-date with the latest food trends.
While food is a staple in restaurants, what in addition is keeping our guests coming back every weekend? A perfect example of us transitioning to keep up with the changing demands of our guests is our restaurant, JohnKing Grill and Dueling Piano Bar. This restaurant has garnered new business by becoming a staple of downtown Charleston Nightlife with its dueling piano show every Wed – Sat night, offering an intangible memory that is unique to Charleston. Our rebrand of JohnKing Grill to JohnKing Grill and Piano Bar has allowed us to differentiate ourselves from other downtown restaurants by being the only Dueling Piano Bar in Charleston. In addition, we have also incorporated a brunch menu in the morning that offers fixed menu, affordable options while also being delectable.
Sam Mustafa is the the CEO of Charleston Hospitality Group and Toast! All Day Franchise. Named one of the nation’s 100 most influential CEOs by Nation’s Restaurant News and frequent speaker on Joe Pardavila’s Podcast on ForbesBooks Radio. Sam is one of the leading voices in the Restaurant Industry.