Schmo’s Subs, a national competitor of yours, began to sell their subs for five dollars in 2008. Industry Analysts contend that the five-dollar promotion is among the most successful promotions in restaurant history. When looking at the price of your competitor’s products, your products are significantly below that price. Specifically the Reuben and Pastrami sandwich cost a dollar or less. By aligning the price on those two items alone you would increase your monthly revenue in January of 2011 across all stores by $144,929.55 ($24,759.55 Reuben, $120,180 pastrami), which translates to nearly 40% your total monthly revenue.
One of my observations is that multiple items, including French Cheese, small coffee, and egg sandwiches have multiple prices in the same day at the same restaurant. This raises the question of whether there are any business risks. Two possible risks that may the cause of this discrepancy are input error by the employees and database errors where the value is not correctly populated into the system.
There are a handful of items on the menu that have very low sales. Some, like Sausage, are the base for other items, like the Sausage Egg Sandwich. As such, there is little risk for the item to expire and become waste. However, others are not base ingredients for other products like the Big Beef Bun and the English Muffin. The low sales means that the business runs the risk of reputational harm for a product that does not meet the standard of quality that the other items possess. Furthermore, it is likely that much of the excess product goes to waste. Removing the item will prevent both of those outcomes from happening.
Seattle has a reputation for being a rainy city. Records for January’s precipitation in 2010 and 2011 show that it nearly rained or snowed every day of the month. This dreary weather is an opportunity for the restaurant to expand its menu. According to Eric Danetx, the global chief revenue officer at AccuWeather, “Weather creates buying intent. The effect of weather on mood is undeniable, so it typically affects what people want to eat and drink. Offer foods with an emotional appeal; in colder months, we see customers seeking out comfort foods such as ramen, soups, or stews.” Adding soups to the menu could be a way to attract new customers to the restaurant.
Seattle has a reputation for being a rainy city. Records for January’s precipitation in 2010 and 2011 show that it nearly rained or snowed every day of the month. This dreary weather is an opportunity for the restaurant to expand its menu. According to Eric Danetx, the global chief revenue officer at AccuWeather, “Weather creates buying intent. The effect of weather on mood is undeniable, so it typically affects what people want to eat and drink. Offer foods with an emotional appeal; in colder months, we see customers seeking out comfort foods such as ramen, soups, or stews.” Adding soups to the menu could be a way to attract new customers to the restaurant.
The restaurants have strong average sales throughout the day. However, late nights between 11 PM and 5 AM, do not follow this trend. If the restaurants were to close at 11 PM the restaurant would save $55.32 per employee working. If there are three employees, this amounts to a shift loss of between $150 and $157 dollars. Over a month, this averages to over $4,600.
A new Joe Smith’s Sandwich Shop hasn't opened in the Seattle Metro in the past fifteen years. Future expansion plans in the area should target suburban neighborhoods where a sizable percentage of the population are minorities. The two restaurants with the highest spend per household are in suburban neighborhoods where over 50% of the households belong to minorities’. Another observation are that those neighborhoods tend to have lower overall populations compared to the other smaller cities where non-minorities make up the majority of the households. This may be an opportunity as other businesses may avoid investing in the area due to the smaller base population. Joe Smith’s Sandwich Shop highest performing store in terms of average household spend and total revenue earned was the least populated neighborhood of all four locations. Using a demographic map, such as the 2010 Census Racial Dot Map created by the Weldon Cooper Center for Public Service or the 2020 Census Racial Dot Map created by CNN are good tools to evaluate whether the prospective neighborhood contains the restaurant’s primary clientele.