Viewpoint January 2008
Who Pulled the Pickles?!
by Bob Gershberg
Managing Partner, Dick Wray Executive Search
If as most profess the market leads the economy, we in the restaurant sector need to brace for a most challenging year. Bear Stearns downgraded the restaurant industry to “market underweight” while Banc America Securities cut its stock price targets for Darden, Brinker, Ruth’s Chris and Ruby Tuesday by more than 30%. Starbucks, PF Chang’s, Cheesecake and Wendy’s were teetering at 52 week lows. All of this on the first day of trading – January 2, 2008.
Spiraling commodity costs, $100 per barrel oil prices, a troubled housing market, stiff labor cost pressures combined with predictions of soft sales are sure to test our meddle as we set and tweak our course for the year. Laser focus on remaining true to our brands, great to our customers and driven to operations excellence are the likely keys to weathering the ’08 storm. Repressing the inclination to overreact to these massive pressures will require steadfast resolve.
Many of us recall sparring with like issues in the recessionary period of the late 80s/early 90s. It was during this time, as CEO of a fledgling bakery-café chain I sat in a busy downtown unit pondering a strategy to control prime costs. I watched as one customer after another finished their respective sandwiches leaving the pickle untouched on the plate. As I observed pickles being dumped in the trash with reckless abandon, I did a bit of quick math. A 1/6th slice of a large, high quality refrigerated kosher dill cost about 5 cents at the time. Eliminating the free pickle would save us $120,000 per year. Smitten by my own brilliance, I raced back to my office and authored a memo to all managers – No More Pickles! Within a few days as our pickle inventory had been exhausted, I heard a bit of rumbling from the field but I remained resolute. One week later as I walked into my office, I noted the stack of customer comment cards placed neatly on my desk. The top card read in bold print, “WHO’S THE MORON WHO PULLED THE PICKLES?” Needless to say that very day our pickle purveyor loaded up the delivery truck with pails of pickles and visited each of our locations.
Measured tweaking trumps over-reacting time and time again. 2008 promises to challenge us in every possible fashion. We will undoubtedly prove if nothing else, we are resilient folks.
All the best,
Bob Gershberg |Managing Partner|
bob.gershberg@dickwray.com
(888) 875-9993 ext 102
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