Restaurant Industry Business Challenges in the USA

Introduction

            There are so many players in the restaurant industry in the United States of America. These restaurants are approximately 800,000 (Hoovers 2010). The US restaurant industry is characterized by various kinds of establishments (Malin 28). Furthermore, the restaurants are categorized basing on the type of food they offer and the clients’ needs that they serve to satisfy. Some of the categories include American restaurants, family restaurants, ethnic food restaurants, Pakistan restaurants, French restaurants, French restaurants, Italian restaurants, food delivery restaurants, Japanese restaurants just to mention but a few. Soups, pasta, salads, fried salmon, field mushroom risotto, bacon, lamb rack, sweets like farmhouse cheese and cookies, beer, wine, among others are the kinds of foods served in these restaurants. Bar Louie, Primebar, One North, Red Star Pub, Bluepoint, and other restaurants in the U.S. The Grillroom, Townhouse and Midtown Kitchen (Restaurants America 2009).

            Restaurants have numerous characteristics in the United States, varying from building materials to food service and place. With power lunches, corporate meeting points and late night drinks, they give customers (Restaurants America 2009). A case in point is Grillroom, which is a wine bar and urban chophouse. For lunch and dinner with families and friends, some deliver an inviting, intimate and warm environment generated by wood panels and flagstone walls, captivating artwork, oversized curved leather booths and an accessible kitchen system (Restaurants America 2009). Red Star Tavern is a good example.

In the restaurant industry, most entry-level positions in this field need little to no prior experience and simple tasks may also be mastered during a limited period of time (Ingram and Joel 68-102). Managers of restaurants and several branch leaders, such as a head cook, typically require either structured experience, or years of know-how in the hospitality business, or both. Both jobs in this organisation need staff to maintain a customer-service policy. Almost all workers of the restaurant industry in the United States undergo any on-the-job preparation offered under the direction of a seasoned employee or boss to get used to the outstanding aspects of the property or the surrounding environment for new employees.

The restaurant industry in the United States is expected to see an improvement in the number of restaurants. Many of these new restaurants are being built in the suburbs, where there is a rising demographic and a base for business organisations is being formed (Dobbin 90-102). Below are fast details regarding the restaurant industry in the U.S;

• The restaurant industry employment in the United States is projected to reach about 13 million by the year 2012.

• The United States’ restaurant industry operates over 1 million units and post sales of approximately US$ 577 billion.
• Sales in the restaurant industry sum up to US$ 1.6 billion on a typical day in the United States.
• Eight of ten salaried employees at the table-service restaurants began working as hourly employees
• About one third of all the adults in the America have somehow worked in the restaurant industry at some time in their lives.
• Restaurants employ more minority managers than any other industry in the United States.
• Over two thirds of supervisors in preparation of food and service occupations are women with 16 per cent and 13 per cent being of Africa-American and Hispanic origin respectively.
• There is an improvement in the amount of women owned and African-American owned restaurants in the past decade in the United States.
• 78 per cent of American adults believe that going out to eat at a restaurant with family and friends gives them a chance to socialize and a better way of maximizing their leisure time.

Source: NRA (National Restaurant Association) 2010.

Purpose of the Study

The aim of the analysis is to discover business challenges that the restaurant industry in the United States is undergoing which include but not limited to challenges in competition, technological innovation, marketing and customer demand, financial position, human resource management, legal and/ or political challenges and ethical setbacks. The study will further examine the industry’s response to these challenges by exploring strategies and solutions adapted by the players in the industry and their effectiveness. The study will go on to give conclusions and recommendations on the issue.

            Some restaurants in America are encompassed in hotels. A hotel could have a bar, rooms for accommodation, conference halls and a restaurant. Examples of hotels that have restaurants are SLS Hotel at Beverly Hills, Cavallo Point, The Lodge at the Golden Gate in San Francisco and One Bal Harbour Resort & Spa in Miami, Florida. It is significant to notice at this juncture that this study is focused on only the restaurant industry and not the hotels.

Business Challenges in the American Restaurant Industry

• Competition

            Of recent, there has been an explosion of new restaurants. In the US alone, the restaurant industry includes an estimated 800,000 restaurants with the major players in this industry include national giants such as Wendy’s and regional players like Darden Restaurants and Sonic (Hoovers 2010). Increased competition in the restaurant industry in the US has spurred many establishments some of which operate online reservation systems through the internet or uphold websites that allow clients to make online reservations. The restaurant industry in the United States is expected to see an improvement in the number of restaurants. Most of these modern restaurants are being opened up in the suburbs, where there is an increasing community based and a foundation of business organizations is being developed (Dobbin 90-102). This has been a major problem for the group existing players who have to go back to the drawing board to lay newer strategies to keep pace with the changing competitive conditions.

            Fast casual restaurants are an emergent source of competition in the restaurant business (David 2002). Fast casual restaurants such as Panera and Cosi merge the expediency of sit-down restaurants with the quality of casual dining. These fast casual restaurants are offering a new alternative to sit down restaurants and as a result, they threaten to gain competitive advantage over these restaurants. Small restaurants are also facing competition from giants such as Darden Restaurants. Furthermore, restaurants compete with companies that offer meals including grocery stores and also home cooking.

Another major source of challenge is the emerging markets. It is important to note that tourists form one of the largest consumer segments of restaurant services in the United States (Hoovers 2010). The World Tourism Organisation reports that global tourism trips have grown from 550 million in 1995 to 770 million in 2005, estimated by departures, and this rate is projected to continue to grow to 1,561 million by 2020 (Bruce 2006). China alone is projected to generate 100 million outbound tourists by 2020 up from the current 15 million. As the number of global travels increases, the beneficiaries of international tourism will significantly change as there is a mounting interest of new destinations such as China (Stephen 15-35). Hence, the number of customers enhanced by tourism is bound to experience nosedive. This is a great challenge to the US restaurant industry as the country is becoming less a preferred destination by international tourists who are exploring newer destinations.

• Technology

            Technological improvement has been felt in the restaurant industry and most of this has been brought up by the increased competition. The introduction of twitter which is a social networking and a micro-blogging service has been used by many marketers to advertise their businesses and the services they offer for example the restaurant industry (Malin 25-45). In order to be a successful in the restaurant industry, it is important to know how the customers feel about the services provided. The customers are to post comments through twitter which will enable the marketer to know the strengths and weaknesses of the establishment. The marketers are also able to connect with their customers through the internet for them to feel that their opinions are important. This is vital in coping with the changing conditions in competition and economic status. This also gives one an opportunity to introduce new products in the market and get feedback on its usefulness and analyze the customers’ ideas and thoughts.

            In 2006, an estimated US$ 24 billion worth of reservations in the United States alone were booked through internet sites and this represents 27 per cent of the country’s total restaurant industry revenues up from US$ 15.5 billion in 2004 (Bruce 2006). Bruce states that online research influenced an estimated 25 to 30 per cent of all reservations in the US in 2006.  It is clear that the hotel industry continues to experience a revolution in distribution particularly due to technological advancement.

            However, many hotel managers do not take advantage of the systems that maximize revenue opportunities despite there being a growing awareness of technologically advanced systems such as the value of modem and integrated systems (David 2002). Those who have adapted these systems fail to support and secure them to the extent appropriate of the value of their data (Bruce 2006). A significant factor barring wider adaption of these systems is the challenge of improving the systems’ ease of use as they continue to grow magnificently in functionality. This is a challenge that comes as a result of low responsiveness to technological changes that the business sector in the United States is experiencing. It is to address that restaurant business owners address this challenge because technology is become an integral part of doing business in the United States.

• Marketing and Customer Demand

The US restaurant industry includes an estimated 800,000 restaurants with combined yearly revenue of approximately US$375 billion (Hoovers 2010).  The major players in this industry include Darden Restaurants, McDonald just to mention but a few. Restaurants compete with companies that offer meals including grocery stores and also home cooking. These and other factors make the competition landscape very wide and as such marketing comes in handy.

Marketing in itself is a challenge. This is due to the cost of marketing that is rising at a very fast rate (David 2002). It is also attributed to the stiff competition that the players in the industry have at their disposal. The marketing strategies that the restaurants employ are a determinant factor to the demand of the products. Poor marketing leads to low perception and hence low demand and vice versa. Furthermore, demographics, consumer tastes and preferences and personal income influence customer demand.

David (2002) states that from 1990 to 2000, consumer expenditures for farm foods in the America rose to US$ 211 billion. Higher marketing expenditure was the chief cause of rising consumer spending on food over the past decade. During the same period, marketing costs rose by 57 per cent and accounted for most of the 47 per cent rise in consumer food spending. The farm value of food purchases rose by 16 per cent during this period. The rise in marketing costs simply leads to increased production costs and because the restaurants are profit-making organizations, they are compelled to use revise their menus upwards and this only compels the consumers to spend more on food thus limiting them due to high prices of food.

Marketing bill in the restaurant industry in the United States is escalating and this increasingly becoming a challenge. It entails labor costs used by manufacturers, wholesalers, retailers and eating places which cost up to US$ 253 in the year 2000 accounting for approximately 40 per cent of the total consumer food expenditures (David 2002). The total number of workers in food marketing was about 14.3 million in the year 2000 which was approximately 17 per cent more than in 1990. Packaging is the second constituent of the marketing bill. From the year 1990, packaging costs went up by 47 per cent and this accounted for 8 per cent of food expenditures which was approximately US$ 53 billion (Malin 25-45). Furthermore, the energy bill for food marketing costs accounted for 3.5 per cent of retail food expenditures, a total of US$ 23 billion in the year 2000. Further costs in advertising totaled US$ 26 billion, accounting for 4 per cent of food expenditures in the year 2000. There was 52 per cent rise since 1990 with the food service sector having the largest increases in advertising costs (Malin 25-45). The escalating cost of marketing accounts for the increasing prices of food and this is increasingly proving to be a barrier towards ventures in the restaurant industry in the United States.

Moreover, spending in the United States is negatively impacting on the restaurant industry in the country. This has compromised customer demand hence posing a great challenge to the industry. The country accounts for the largest share of restaurant food spending globally. Since the first half of 2007, several factors have put consumer spending in this market under intense pressure (Bruce 2006). This has been attributed to plummeting housing market which has a negative impact on wealth amongst consumers hence limiting their spending. Inflation has also escalated to unacceptable levels hence out spacing wage gains thus discouraging spending (David 2002). It is also important to note that since the first half of 2008, unemployment levels in the US have been deteriorating with the economy shedding off 485,000 private jobs and reducing working hours and this has compromised purchasing power of American consumers (Malin 25-45). This coupled with the escalating food prices is becoming increasingly difficult for consumers and limiting their spending on food which is great challenge to the restaurant industry in the United States.

• Financial Challenges

Scripps Interactive Newspaper Group (2010) terms the restaurant industry in the America “an uphill battle” due to the financial challenges facing the industry. Aritclebase (2009) describes the current financial conditions facing the industry as extremely difficult. One major indication is the decline in sales during the US recession, a time when people spent less. David (2002) states that the cost of food marketing is escalating faster than the farm value of agricultural products used in restaurants in America. It is predicted that food expenditures will increase over the next twenty years due to increased food prices. Much of these increase are a result of increases in marketing costs because the demand for primary agricultural commodities has been relatively constant given the current demand for value added products (David 2002).

David (2002) states that food retailers are responding to market trends and consumer demand by offering a broader variety of convenient at-home food products which include food that require minimal preparation including ready to eat, ready to heat and ready to cook products. These products require more processing and more labor inputs and this only further escalates the cost of production which only increases the price of food hence compromising the restaurant business in the United States.

Bruce (2006) pointed out an increase in all construction costs for furnishing, fixtures and equipment. Associated General Contractors of America observed that construction costs were primarily driven by materials costs that dramatically spiked in 2004. The years 2005 and 2006 experienced a 6 per cent and 8.8 per cent respective annual increase in the cost of construction materials (Malin 25-45). The United States’ restaurant business is not an exception in feeling the negative impact as this further makes worse the financial status of the industry and it limits new businesses and maintenance of current businesses (Ingram and Joel 68-102). The present belief by investors is that barriers to entry for new restaurants are now unacceptably high. Traditional barriers such as availability of site and competing land uses have been augmented by issues of availability and cost of construction materials. Furthermore, viability of many projects in the restaurant industry in the United States is undermined by high development costs.

The restaurant industry is increasingly proving difficult to run as it is becoming challenging to sustain growth and improved returns on investment (Bruce 2006). This is because of increasing operational costs that out space the growth of revenues and the need for reinvestment in the industry due to the rising costs of capital that adversely affect returns; escalating labor and benefits costs that are being driven by changes in demographics, government regulations and labor agreements; and high energy costs.

The cost of labor is the prime factor that is escalating costs in the restaurant industry in the United States. Wage and salary service in restaurant business is expected to increase by 5 percent between 2008 and 2018, in comparison with 11 percent growth expected for all industries combined (Dobbin 90-102). Looking at utilities, they grew at a rate of 13.6 per cent over the prior year to 2005 (Ingram and Joel 68-102).  The energy costs are increasing as a result of high oil prices (Bruce2006). The increasing interest rates and higher equity return necessities are anticipated to result to increased costs of capital. This leads to a considerable decrease in profits and return on investment in the restaurant industry.

• Human Resource Challenges

Effective human resource management is one of the most important considerations in creating and maintaining competitive advantage in the restaurant industry (Tracey and Nathan 17-27). Considerations in human resource management dominate the list of management issues in the restaurant market (Cathy 38-45). The restaurant industry experiences high employee turnover due to the nature of work, lack development or career opportunities in this industry, low level of pay among other factors. Another reason for this is that job opportunities in the hotel industry require low entry requirements and hence high replacement needs. High turnover of staff and rapid change in employees in a company will impact the dedication of employees and cause high costs in recruiting, recruitment, administration and morale.

In America, most restaurants are open for twenty-four hours, but workers also work on shifts or schedules. Many workers welcome the option to operate part-time, nights or weekends, or other time ranges that are in keeping with their work availability and the needs of the hotel. Restaurant managers and several division supervisors can perform routinely allocated time scales, but they often regularly work longer hours than expected, especially during peak times or when, for example, Christmas is close to several events. In the case of an accident or to fill a position, they can even be called on to operate on short notice. The long working hours simply lowers the morale of employees which limits their productivity thus compromising the output of the business in the restaurant industry in United States.

Employees in the restaurant industry in America are poorly motivated. Members of staff do not put an effort into working or even seeing their job as a pathway to a brighter future. This is due to the fact that they receive low pay and the jobs in this industry are dead-end jobs (Betsy 261-291). The low rates of unemployment in America have given human resource managers in the country persistent headache. This explains the high rate of employee turnover in the hotel industry in America.

• Legal /Regulatory/ Political Challenges

            There are overwhelming legal issues that are involved in running an establishment in the restaurant industry. There are very many federal laws that negatively affect the restaurant business in America. These laws include but not limited to regulations by the World Health Organizations, Labor Laws, Occupational Safety and Health Administration (OSHA), taxation laws, public liability laws, franchise regulations among others. The most notable law has intense negative impact on the restaurant industry is the Western Hemisphere Travel Initiative.

The Western Hemisphere Travel Initiative (WHTI) was as a result of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA) and require all travelers to present a passport or other document that denotes identity and citizenship when entering the United States (David 2002). The goal of this initiative was to strengthen American border security while facilitating entry for American citizens and legitimate visitors by providing standardized documentation that enables the Department of Homeland Security to quickly identify a traveler. However, this initiative has a clear impact on between the United States and its neighbors and particularly the restaurant sector. This is because tourists are the best customers to many restaurants in America and putting more limitations for them to enter the United States means weakening customer base of the country’s restaurant industry.

Bruce (2006) takes up a study for the Hotel Association of Canada that was carried out in Canada. The survey found that at least one trip to Canada was expected by 36 percent of Canadians, with 24 percent saying they will spend at least one night and dine in restaurants. When questioned about the imposition of a cross-border travel passport as an entrance condition in the US, 27 per cent said they were likely to cancel the journey. What this suggests is that as a consequence of the Western Hemisphere Travel Plan, one fifth of the 117 million nights spent by Canadians entering the United States in 2005 will also not travel. This will be counterproductive to the reality that Canada has traditionally been the main source of tourists to the United States from a single nation because of its proximity and ease of entry (Ingram and Joel 68-102).

• Ethical Challenges

            Ethical codes are applied by most businesses as a means of articulating ethical policies. Remember that an organization has a set of policies for the smooth flow of its operations (Betsy 261-291). Hence, ethical codes may not be a solution to unethical behavior but they come in handy as a means of managing culture in a company and upholding ethical values of the employees. Ethical codes comes are significant in ensuring smooth employee relations. In this regard, businesses in the restaurant industry need to have set policies that clearly stipulate ethical codes to guide the day to day activities of the business.

            Human resource managers in restaurants in America make admit that they face certain ethical issues in their work and these include lack of work ethic, use of drugs and theft by employees (Betsy 261-291). These are major issues that establishments in the restaurant industry in America need to address. This is because of the fact that they compromise good working conditions in the business and further deteriorate employee relations yet these relations are very important as they promote productivity and business output. Specific cases of unethical issues experienced by restaurant managers in the restaurant industry include drug abuse, theft, lack of respect amongst employees, conflicts among various races and gender and dishonesty (Cathy 38-45). Low wages and dead-end jobs leads to poor motivation of employees and these have compelled many employees to take to unethical behaviors.

            The issue of drug abuse by employees is a concern for many human resource managers. The restaurant industry in America is full of drug impaired employees and this puts their performance at a compromise (Betsy 261-291). This is rampant in establishments which do not use drug testing when hiring new employees. As a result, employees who are engaged in drug abuse do not perform to their maximum and this has reduced productivity of most establishments in the restaurant industry in the United States.

            Theft is another major issue that has compromised most establishments in the restaurant industry in America. Human resource managers noted theft as an ethical issue and believe that petty thefts are the most troublesome. Some employees take home items such as spoons, soap and towels while others use airborne express envelopes for personal use (Cathy 38-45). Thes items seem to be of little or no value to the establishments in the restaurant industry. The point is that they are of great value to the business and if stolen, it means loss of tools of trade which puts production at a great compromise.

            Employees in the restaurant industry in America do not respect each other as individuals. They treat each other with a lot of disrespect. This includes quarreling, name calling and stereotyping. In some restaurants, the rifts amongst employees are so big and common such that they require intervention by human resource managers (Betsy 261-291). This issue is detrimental to the restaurant industry as it shrinks the significance of core values and puts the productivity of businesses at a risk.

Industry Responses, Strategies and Solutions

            Distribution channels in the restaurant industry have encountered a revolution by technological advances, notably by the internet (Bruce 2006). As distribution via the internet is increasing with many reservations taking place online, it is agreed that the online presence has helped to level the playing ground in the restaurant industry. In essence, independent restaurants are competing in the cyberspace with major brands in the same industry. Therefore, the issue is not whether one can compete but whether any restaurant can keep pace with the dramatic changes and innovations that are flooding the rapidly technologically advancing world.

The restaurant industry is one of the highly competitive and thus it is necessary to have the right knowledge about customer values and demands this is because it differentiates competitor’s strategies helping the industry gain sustainable competitive advantage. To achieve this objective, restaurant owners are moving from the implementation of traditional marketing strategies to applying newer strategies. Marketing using traditional strategies is based on acquisition (Stephen 15-35). This is where they set up a good balance between acquisition and retention which aims at segmenting the market thus encouraging future success. The best and newer method being used in such include relationship marketing since it focuses more on customer retention and the creation of a win- win situation that is long term in nature and is having positive impact on the restaurant industry in the United States.

Players in the restaurant industry in the United States try to beat up competition by developing a competitive edge and not concentrating on changing hotel prices (Bruce 2006). The first method being used in achieving this includes market segmentation and realignment. This enables management to determine the kind of group to target in order to deal with competition. The other strategy is delivery of superior services such as more nutritional food to the clients as this retains them and also enables them to advertise the hotel outside the premises (David 2002). This also creates a good experience to clients who pass on the information on the good practices of restaurants and this builds the image of businesses in the restaurant industry.

In response to the shifts in consumer demand, different establishments in the food system are competing to identify and provide more processed and high value-added food products. Hence, the restaurant industry has benefited from Americans’ desire for convenience. In this regard, the retail food industry is responding by offering consumers with a variety of processed, ready to cook, ready to eat and ready to heat foods (David 2002). The trend of eating out is a strong indicator of the the current market trends. Snacks and meals prepared by the food sector establishments commonly known as away-from-home offer consumers a more desirable combination of convenience and variety. David (2002) states that, in 2002, expenditures on away-from-home food accounted for 47 per cent of the total American food expenditures and the National Restaurant Association projected that the away-from-home food expenditures would exceed at-home food expenditures in subsequent years. This is attributed to the quick response to changing consumer demand by establishments in the restaurant industry.

Customer convenience is critical and it is for this reason that most restaurants are located in high traffic areas (Hoovers 2010). Companies cautiously evaluate potential restaurant sites and put into consideration population density, the nature of traffic flow and working patterns. As a result, restaurants may be free standing or located inside another building whereas companies may place restaurants with limited or no seating, in tight spaces such as airports or train stations. All this is geared towards consumer convenience as a way satisfying demand.

Marketing strategies are employed by business owners to increase consumer demand (Ingram and Joel 68-102). In the restaurant industry, production is one of the major strategies employed. This simply entails production of food in a clean environment and also in a way that ensures quality and food safety (Hoovers 2010). This means that a number of chefs are employed so as to meet demand. They include executive chef, souse chef, line chef, pastry chef and prep cooks. They have to ensure high quality food so as to build their name and brand which enhances their image.

Use of the menu option is another marketing strategy aimed at increasing demand. This simply means creating a menu that balances popularity and profitability. The menu also involves variety by providing options for the invalid, children, vegetarians and others.  The menu is also placed in the restaurants’ website so as to reach the wider customers, both current and prospective. David (2002) states that food retailers are responding to market trends and consumer demand by offering a broader variety of convenient at-home food products. These products include food that require minimal preparation including ready to eat, ready to heat and ready to cook products.

To overcome financial challenges, players in this industry are creating menu options that balance popularity and profitability. In essence restaurants put into consideration availability of ingredients, cooking equipment, physical space and cost when developing menus. Some restaurants change their menu options seasonally and notably, the high-end restaurants create new menus daily (Hoovers 2010).

At present, many restaurants are engaging in training programs which aims at fully integrating the employees into the business and also to promote development of skills and capabilities (Cathy 38-45). These trainings are aimed at sharpening the skills of the employees and keep them up to date the rapidly changing world. Many training programs aim at teaching the employees to provide quality services to customers and to protect the employees themselves at the same time.

            Restaurant managers and owners are aware of the significance of personal service and attention to customers, so they look for persons with positive character traits and good communication skills when filling many customer service positions (Malin 25-45). Most restaurant managers stress on customer service skills while providing specialized training in other skill areas, such as computer technology and software. Occupational and apprenticeship courses in food preparation, catering, and restaurant management, offered through restaurant organizations and trade unions, provide training opportunities. Programs range in length and take a few months to several years.

In America, there are very many advocacy groups in the restaurant industry whose main role is to ensure that the interests of players in this industry are considered and for this they influence the policy making process in America (Stephen 15-35). Examples of these advocacy groups include National Restaurant Association, American Resort Development Association and the International Council on Hotel, Restaurant and Institutional Education. These advocacy groups influence the law making process in American regarding rules and regulations that directly and indirectly affect the restaurant industry.

In response to the ethical challenges, restaurant managers are laying out ethical codes in their individual establishments (Betsy 261-291). These are set core values that are helping many businesses uphold ethical standards in their day to day activities. Some establishments have up to date test kits to test new employees during recruitment. This is being adapted by an increasing number of restaurants in America and it is geared towards detecting drug impaired job applicants (Betsy 261-291). The screening process also helps to detect applicants who do not meet other requirements.

Conclusions and Recommendations

A close look at the findings clearly indicate that the restaurant industry in America is facing quite a number of challenges ranging from competition to technology, marketing, consumer demand, financial challenges and political constraints. These challenges cannot be overlooked as they have negatively impacted on the restaurant industry in America. The negative impacts ranging from reduced productivity to nose low returns on investment. It is notably clear that the restaurant industry continues to experience a revolution in distribution particularly due to technological advancement yet companies in this sector are less and less equipped to keep pace with the dramatic changes in technology (Cathy 38-45). However, the players in this vital industry are doing much to cope up with these challenges. Notably, they are embracing technology in distribution, training and developing workers and responding quickly to customer demands. However, much needs to be done to gain more and improve this crucial industry.

Basing on the Findings, the Following Recommendations Were Made

            For the restaurants to continue attracting more customers in future, it is necessary for managements to concentrate much on improving strategies meant for developing customers’ value. Some of these strategies include what customers value most especially use of a more personalized method of operation.

Establishments in the restaurant industry should make better use of advancing technology. In this regard, restaurants should put more efforts in formulating marketing strategies for instance advertising through the internet to reach more clients of a particular target group. This will also enable the company give all the information regarding the services offered by the restaurants.

            The restaurants’ managements should carry out frequent evaluations about their service provision through asking for the customers’ opinions on what is to be improved and what is to be maintained.  This will help restaurants take a position in the market according to the quality of services they offer and this will also help them to gain competitive advantage when they improve their services.

The restaurants’ managements ought to focus more on improving the relationship with potential customers in order to retain them and to attract more. The human resource management should also employ individuals with marketing experience as this makes the company grow stronger as well as maximizing more opportunities that the restaurant needs.

            Restaurants in the United States also need to develop internal programs that aim at creating attractive careers paths so that potential candidates see employment in the industry as a professional development opportunity with real potential for development. This could be done through training programs that not only help improve employee’s performance and customer satisfaction but also motivate the employees. It also reduces raises employees’ job satisfaction, reduces employee turnover rate and maintains employee loyalty.

Restaurant business owners should also devise better ways of recruiting and selecting potential employees. Recruitment for entry level jobs is easier when the recruiter can outline a career path and point to managers who have worked their way up from line positions. Internal recruitment is better because it instills morale in the employees but external recruitment should not be under looked. In essence, the restaurant management should adapt more comprehensive selection kits to screen candidates.

Restaurant management should also come up with reward system as a means of recognizing and appreciating hardworking employees. Furthermore, reconfiguring work processes and thereafter sharing the benefits of increased productivity can have positive impact on employee performance. They should keep in mind the fact that a motivated employee is a more productive.

Restaurant management in the United States should adapt cost reduction strategies so as to counter financial challenges. This can be done by increasing the use of pre-fabricated components in new construction and evaluating materials’ specifications carefully to ensure the most appropriate and cost-effective materials are being used.

Restaurant managers need to put in place strategies that address multi-generational needs, wants and desires of diverse guests with regard to sex, age, race and religion. They should offer products and services that cater for the special needs of aging consumers as well as young customers who come from different races, religion and background.

Works Cited;

• Aritclebase. Financial Challenges Facing Franchise Businesses. 11 August 2010. < https://www.articlesbase.com/franchise-articles/financial-challenges-facing-franchise-businesses-1618205.html>
• Betsy, S. Hotel Ethical Codes: A Content Analysis: International Journal of Hospitality Management, 16.3, (1997): 261-291.
• Bruce, B. The Public Record: Experts Identify Top 10 Issues Facing Hospitality Industry.
• 11 August 2010. 1 Oct 2006. < https://www.allbusiness.com/public-administration/4059212-1.html>
• Cathy, A E. What Keeps You Up at Night? Key Issues of Concern for Lodging
• Managers, Hotel and Motel Management 42.2 (2001): 38-45
• David, E. Frozen Food Digest: Changing Consumer Demands Create Opportunities for US
• Food System. 11 August 2010. I Sept 2002. < https://www.allbusiness.com/marketing-advertising/315870-1.html >
• Dobbin, Frank. Forging Industrial Policy. New York: Cambridge University Press, 1994: 90-102.
• Hoovers. Industrial Overview: Restaurants. 11 Aug. 2010. 6 Sept 2009. < https://www.hoovers.com/restaurants/–ID__27–/free-ind-fr-profile-basic.xhtml>
• Ingram, P and Joel A. Chain Affiliation and the Failure of Manhattan Hotels: Administrative Science Quarterly, 1997: 68–102.
• Malin, H. Acquiring and Retaining Customers Through Traditional and Relationship Marketing: A Case Study On the Quality of Hotel Burke & Wills, 2008: 25-45.
• National Restaurant Association, Restaurant Industry Forecast, 2010.
• Restaurants America, Restaurants, 12 August 2010. 2009 <https://www.restaurants-america.com/restaurants.cfm>
• Scripps Interactive Newspaper Group. O’Charleys Confronts Financial Challenges. 11 August 2010. < https://www.knoxnews.com/news/2010/jul/05/ocharleys-confronts financial-challenges/>
• Stephen, S. Fighting Hotel Competition, Hotel Condo Sales and Indoor Water Parks, 2006: 15-35.
• Tracey, J B.  The Strategic and Operational Roles of Human Resources: An Emerging Model, Cornell Hotel and Restaurant Administration Quarterly, 43.4 (2002): 17-27.