G'day Reader

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I'm sure you're well aware inflation isn't going down.

That means the Central banks will keep interest rates up, maybe higher!

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Impact of high inflation & interest rates.

Our Businesses

• higher costs of goods - food & beverages
• can food costs get any higher? Yes!
• energy costs will keep hiking too - gov't isn't stopping them
• scary rent reviews where market reviews based on higher CPI

Our Customers

• most segments will see further reduced discretionary spend
• customers will be searching for the best deals - switching venues
• there will be a move to more home 'dinner parties' in some segments
• customers will just say 'no' to certain previous routine spending

Our Employees

• our staff face higher costs of food, bills & rent
• as businesses slow down, staff hours get cut back too
• some staff won't be able to afford to eat properly
• some staff may face financial stress & misery

Our Suppliers

• our suppliers are facing cost increases too
• not just in what they're supplying us with
• but also all their other business expenses
• and their customers are going bust owing them

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Who IS NOT coming to save you?

The Government

• If you're a small business they're not interested
• Tax Office more aggressive & closing businesses
• Politicians have their hands in their pockets
• Hospo & tourism gov't Depts have no idea

Industry Associations

• Your industry associations are out of their depth
• They need to be offering free advice to members
• How to reposition, exit, liquidate
• But they're mainly shaking hands with politicians

Business Banking Managers

• They're looking at your loan security
• They're looking at your loan Guarantee
• They're looking at your assets & risk factor
• They're worried about their own jobs!

Landlords

• Many are still chasing covid rent aged debt
• Some are aggressive on market rent reviews
• Most seeing their interest payments rise too
• They'll be checking their leases - so should you!

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What Can You Do?

Don't rush, don't panic and consider carefully what you change.

Be very wary to just keep putting your prices up.

What you can do depends on:

• your specific situation and how you're performing
• the customer segments you serve
• their perception of your 'value for money'
• why your customers visit you? Occasions.
• how often your customers visit.
• how much do they spend when they visit?
• what your competitors have changed recently
• how well do your promotional campaigns work
• how good a customer database you have
• how good you are using social media
• how committed your team is
• how resilient you are
• how calm you are

For most businesses:

• value for money (price -v- quality) is critical
• dish redesign preferable to constant price hikes
• being consistently good at delivering your experience
• nourishing staff so they nourish customers
• don't stop training, be better than your competitors
• focus on key trading periods, not maximum hours
• create bundled offers and maybe limited-time daily deals
• focus on existing customers - inc ave spend & frequency of visit
• redesign your customer experience to 'streamline'
• focus on popular comfort food & favourite dishes
• consider new 'products' for you - events, brunch etc
• focus on your well-being and that of your team's
• happy leaders and staff are contagious

There's more, but these might get you going.

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Other Tips

Bring your key people together to create a plan

Be very careful how much and how quickly you change things

Have start dates for changes and communicate and train any changes

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If you want to review the changes you're thinking of making with me, I'm happy to have a quick chat with you to help you shape your recession-proofing plan. Reply to this email with "CHAT" and I'll get back to you.

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Remember, together we're stronger.

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David

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David Carruthers​
​Founder, Future of Hospitality
Strategist | Speaker | Coach

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