Those of us with decades of industry experience have become accustomed to up markets with a few down markets layered in.
But none of us is accustomed to a flat market lasting this long.
A flat market taunts you – begging you (or even forcing you) to be willing to change so you can stand out and become an exceptional success.
If you haven’t felt that wakeup call yet, I can hear that alarm on your phone going off. Over and over again.
Be Glad You Don’t Run the State Fair
Even this year’s State Fair of Texas, here in Dallas, showed the effects of lower consumer confidence and lower income group spending: Attendance fell 20% this year, to 2 million visitors (compared to 2.4 million visitors in 2024).
I already knew that even before the numbers were released. I visited the fair with my daughter on a Tuesday night when it felt suspiciously quiet. Also, restaurants I work on that typically suffer erosion during the State Fair did not feel that this year.
I’m hearing from a lot of restaurant owners who are finally seeing the clear picture that a flat market may not change anytime soon – and they realize that they have to take charge of their own situation.
You’re in 1 of 3 Groups of Operators
I see three groups of organizations:
- Group 1: The Winners – Successful groups slowly building guest count with revenue increasing over and above their menu price increase, up to 8-9% higher.
- Group 2: Stable Companies – These remain flat or are just experiencing revenue increases at about the level of their menu price increases, say 1-2% higher.
- Group 3: Floundering Companies – Other companies are struggling – significantly down in the single digits even though they have kept up with menu price increases.
The Winners have done two things. First, they have cleaned up all their bad habits – picking their own low-hanging fruit in through systems, education and training, and perfecting service. They also have honed their relationships with their guests through their offerings and marketing.
Stable Companies are standing still in a gale-force wind. They started with healthy profits and are maintaining those profits. They have long-standing traditions of excellent operations and delivering uniqueness to their guests. They focus on guest experience and every line of their P&L to make the most of what they have.
Floundering Companies worry me the most, because they accept high single-digit declines without being in enough action to reverse them. Some of these companies just act scared; others seem flummoxed, feeling it risky to innovate – even though standing still creates more risk.
To make the most out of today’s flat market, you have to know which group you reside in. Know that, and it will drive a clear path to action.
I can’t tell you that consumer confidence will change any time soon. It might get better, but you can’t live on “it might” – so get into action now!
