Consumer taste and personal income drive demand. The profitability of individual companies depends on the ability to secure prime locations, drive store traffic, and deliver high-quality products. Large companies have advantages in purchasing, finance, and marketing. Small companies can compete effectively by offering specialized products, serving a local market, or providing superior customer service.
Cafes compete for consumer dollars with other specialty consumer stores such as convenience stores, gas stations, quick service and fast food restaurants, gourmet food shops, and donut shops. These stores are generally under 1,500 square feet and have a small food preparation and back of the house area. Cafes highlight the Espresso process, offer high-quality bakery items, and are leaders in quality coffee and roasting. Seating has expanded toward more diverse styles and table heights. Expanding your food and beverage offering can increase your hours of operation, profitability, and bring in more customers to your café. Maintaining quality is important when adding items and experience.
Experience keeps customers comfortable and coming back. The physical and virtual experience for cafes is becoming more unique and closer to that of a full dining experience. Community relationships are more and more important with consumers looking to purchase from retailers with an outreach into the community. A service model that considers a loyalty program, engaging your customers, social media, and other forms of continuous connection will have an impact.
The following are Tips to consider when planning a program for success:
1st Tip – consider food items that are desirable beyond the AM hours. Salads, soups, smoothies, and sandwiches can be integrated easily if implemented right. Be careful to create a menu and food preparation that keeps your infrastructure costs to a minimum. Often a table top induction burner, a high speed air impingement oven, and sandwich cart are all you need to make a variety of menu items and still keep your infrastructure costs to a minimum. Typically, the menu prices at Cafes on food items are lower than dine in restaurants; therefore, target under 15-20% food costs (percentage of menu price). Work with a menu consultant on competitive menu items, process, flow, and low preparation and labor time.
2nd Tip – consider other beverage items to expand your hours of operation. Coffee and tea consumption and purchases often end around 3:00 pm. creating more reasons to visit your café at different hours of the day will increase your profits. Consider adding beer or wine to your menu. When integrating beer or wine, consider the space layout to maximize sales, tasting events, food pairing, and pricing that is competitive in the market. Look into local codes regarding your space layout, barriers, and other regulations in the serving of beer or wine.
3rd Tip – consider integrating special dietary items such as gluten free, sugar-free, and non-dairy selections in your menu. Having a variety of options will attract a wider range of consumers into your café and you can market that you have a menu for many tastes and dietary needs.
4th Tip – consider updating your experience to align with your new menu refinements. The experience that would align with healthy menu items might integrate sustainable and green materials and fresh colors and tones. Typically retail and restaurant concepts need to be reviewed and updated every 5-7 years at the most or when menu items and overall content has changed dramatically – which also is an indicator to re-review your overall brand and messaging.
5th Tip – consider unique loyalty and community outreach programs. Giving back to local organizations can include donating your café venue for their events, thus providing exposure to your café, as well as, showing customers that you are part of their community and want to give back. Consistency and patience is the key. Results in this area can often take 6 months to 1 year at a minimum.
When considering these tips, create a sound plan of delivery including research, benchmarks for success, and hire industry experts to lead you through the process as needed for better results. Competition has increased and success means planning ahead of the curve.
Melanie Corey-Ferrini is the Founder of The Dynamik Group in Seattle, WA creating café and restaurant concepts throughout the world.