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The economy and you, part II
Last week we asked you about the economy and its effects on your business. It seems that companies take one of three approaches, "adding services," "cutting costs," or "raising prices" so that is how I have broken down some of the quotes (we're sorry we can't print every comment).
Adding Service(s) or Lowering Prices/Production:
"Planning consumer events wherever possible.""We noticed people have adjusted their comfort level about $10. We used to be able to move $30 and under wines with ease but that level is now $20 and under. We recently had a Spanish Tempranillo for $8.99 and blew through 6 cases. People still want their wine but are looking for bargains and those great bottles of wine under $20 if not under $10."
"Some of the 40+ members of out hotel company are offering specials, rate reductions, and/or add ons, particularly for multi-night stays."
"We are hosting local Winemaker dinners. They happen once a month and seem to be the difference in breaking even and coming up short. We are also renting our venue out for private functions on our days or hours when we are dark, which also helps with some extra much needed cash flow. Also, we have started an 'Early Bird Special' 5:30 -7:00PM every night. We are trying to keep the three course meal at a 20% food cost and sell as many of them as we can. Every one wins: the customer gets a great three course meal for $25, and we are able to keep the doors open. How has it been working? Some days are GREAT. Other days it's like a ghost town."
"We introduced a $13 Thursday at the wine bar with a pound of mussels and a draft beer for $13. It's packed. We are watching our expenditures VERY closely. Every night we look at labor costs. Our management is on a performace based pay and they are working hard to make sure their numbers are met. Wine buying is limited, buying a few bottles instead of a case and letting inventory run down and adjusting the list so we don't have to sit on too much inventory. Sending people home before OT starts. Bringing in staff 15 minutes later every day (it adds up to 7k a year!)."
"The first step was to assure that pricing was competitive and service was better than the competition."
"Now is the time to ensure every guest has the best experience possible."
"Marketing to current custonmers to keep them. Offering discounts and deal for new customers as well."
"We are looking at adjusting our tasting room pricing and give incentives to buy in the way of rebates on tasting fees if they buy wine."
"We're keeping our costs as minimal as possible: car pooling, public transportation, no raise of fees and little incentives for returning clients."
"Continued and increased specials and reductions."
"More personal funds to keep operations going. Slightly delaying vintage release duirng unstable stock market."
"Producing lower cost wines so we can maintain or increase our margins."
"We've revamped our website and have stepped up our online marketing efforts. More owner capitalization, repeat customer discounts, email campaign to go with the direct mail."
"Staying in touch with every customer that walks through that door. Letting them know how much you appreciate them going out and eating at my place. Offering 2 for 1s and other discounts."
"We will be offering coupons to our regular customers. We are going to participate in different benefit events and hand out coupons for January (when we really feel the crunch)."
"Putting together events with other local businesses to promote us together."
"We'll be hiring another sales person in order to be more aggressive in reaching new retail outlets and to better service existing accounts."
"Expanding the menu to ensure all economic groups are considered. Ie, those that only want or can afford a side dish with a soda instead of an entire meal."
"Historically, economic difficulties actually show an increase in wine consumption. Unfortunately this increase is usually in the lower-end portion of the market and the premium and ultra-premium products suffer. That's why we asre trying to get into some lower-end wines - to capture some sales to offset our losses in teh higher end."
"Decrease production slightly."
Cutting Costs:
"Watching every penny spent - increasing outreach efforts, not advertising but networking and generating press."
"A lot of brainstorming & quick and dirty costs/benefits analysis."
"In the restaurant business you really only have two choices: cut labor or raise prices. Raising prices right now is out of the question if you cater to to families and locals as I do. As owners we work more in the store but that makes it hard to get out and promote more. I send out coupons to try to get some dollars in so I can meet expences but there is no profit in that.I have paid someone to go out monthly and remind all the hotels, B&Bs, wineries that we are here and please think of us. I give out free lunches or dinners to the top people in these places to keep us in mind when they refer others."
"Our company has laid off employees, which I have never seen in the 15 years I have been at this property. All marketing and travel has been cut and complimentaries are scrutinized more than ever. Very Big Brotherish."
"Reduce our labor costs, deliver our fresh baked goods ourselves rather than use and outside delivery service, expand outside our immediate trading area using the internet, remain optimistic!"
"Decreasing days and hours tasting room is open, looking at staff, watching inventory very closely, cutting back on ordering items until absolutely necessary."
"Reduce extraneous expenses i.e. local advertising, invest our advertising dollars towards the customers we already have, search out new clients."
"Cut all spending not completely necessary."
Raising Prices:
"We are increasing prices."
(There were more ofd these - however they all say pretty much the same thing!)
The way people feel about is all over the board, optimistic to fatalistic. Your short term outlook (less than one year) is pretty bleek, with not a single person admitting to being "very optimistic." However people seem to feel that a little time will cure all. Asked about long-term outlook (2+ years) 69.2% are "very optimistic about the economy." Here are a few of your thoughts:
"The situation is very bad and we are are small family owned winery, without vineyards, and going into the time of year that is normally our busiest followed by the time of year we are the slowest, the holiday season does not appear to offer us the hope and business we count on to carry us through the slow times.....does not seem like there is much hope and our dream and everything in terms of resources may be lost....... "
"August was quite slow, September was highly variable with several "best ever" sales days in the tasting room."
"We are really counting on this election to give people a new feeling of security and hope."
"I call it the Rhett Butler effect...I've always been energized by economic challenges. It's no fun financially but it does eventually turn around so I might as well use this time to work hard so I can coast somewhat later."
"Our semi annual meeting will take place early next month, at which time the member innkeepers will discuss how they are responding in order to survive during this time. It has been commented that the media is partially to blame for the current situation. The group's banding together, sharing creative solutions and group marketing are more important than ever."
"Market managers must take this matter into their own hands and find solutions themselves. Aim for selling very high ticket and very low ticket items. Those there are and will be a market for. It's all the bread and butter in the middle that will be a huge problem."
"I'm hoping for the best. This can't last forever."
Last but not least - my favorite creative idea: "Diverting traffic to come through our parking lot and wearing nothing but a sandwich board." (can you send photos?)
Let us know how you are doing and what is working (or not working) for you!
-Margie
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