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FROM THE FIELD
January 2008
New Year's: Good Time For Rethinking
Okay, it's a New Year. The holiday din has subsided. The tree, the lights and the boisterous guests are gone. Time to reflect a little, maybe even make some resolutions. What have we done well, and what do we need to do better?
First, let's all resolve to think more and better than we ever have before. How will we, and our corporate captains up on the bridge, adjust for a market that's always in flux? We've got money issues, energy and water issues, all kinds of things to review.
As we go to press, it's evident that American consumer markets are under a lot of pressure. Will consumers keep spending? Well, does that notion actually include payment? Many of the old economic assumptions are due for reexamination if not reworking.
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"Now we have to scramble—because we didn't want to scramble before."
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So where will the money be in the year and years ahead? There's no question the North American market is mature in a way that was not true 25 or 50 years ago. What does that mean? First, supply is meeting or exceeding demand in many industries. And small surprise: We've spent the last century concentrating on getting worker productivity up, taking labor cost out. So, somewhat ironically, we now can cover needs with fewer workers, even while more people enter the labor supply. Which way does that tend to push wages? What does that mean for your restaurant's market segment and price points?
Then there are the demographic details. In 2000, the U.S. population was 281.4 million. By '20, it will be 330.1 million, an increase of 48.7 million, or 17%. A nice growth. But all of that increase will be in people under age 18 or over 50. The key working-age groups in between will actually shrink about 9%, to 96.8 million. What does that portend for labor and wages? Which will shrink faster, the need for labor or the supply of it? That's a key question.
Then throw job outsourcing into your blender with everything else. And consider, as our demographer friend Hazel Reinhardt did a few years back, that another model is due for rebuilding: Immigrants, who traditionally bootstrapped themselves in unionized manufacturing, now for the most part have to do it in non-union service industries. If the price of your shirt drops faster than your wages do, maybe you're still to the good.
But set your blender for puree, and all those ingredients create an economy where all the population growth is among the lower economic categories.
Which means you're going to have to be really efficient with everything you do in your restaurants. You'll need to be ever more watchful on everything you can control, from energy consumption to water usage and beyond. You've been reading for years here about the energy issues, and in recent months you've been reading about water shortages and the rise of chronic drought. The Colorado River is down. The Great Lakes are down. Lake Lanier outside Atlanta is down. The Everglades are down. Visionaries that we are, we've kept sucking up everything until the declines were obvious and undeniable. Now we have to scramble. Because we didn't want to scramble before.
There's plenty to be done. Let's resolve to get on it.
Brian Ward
Chief Editor
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