In an already difficult economic climate for restaurants, rising labor costs will quickly become an added source of pressure in 2021. In the days leading up to his inauguration, President Biden announced that he planned to increase the federal minimum hourly wage to $15 as part of his COVID-19 relief plan. While the fate of the stimulus bill and the federal minimum wage mandate remains to be seen, 20 states and 32 cities and counties already passed minimum wage increases, which took effect on January 1. Of these increases, 27 raised the minimum hourly wage to $15 per hour. Meanwhile, 23 more areas have further minimum wage increases slated to take effect later this year.
Not only will these changes affect the bottom line of brands paying minimum wage, but those that pay more than minimum wage will also have to raise wages to stay competitive.
“Restaurants already operate on very low margins and deal with pressure from fluctuating commodity prices and unexpected costs, such as PPE and sanitization due to COVID,” says Lenny Evansek, senior vice president of national retail business development at Loomis. “Each additional cost eats into those margins further, and restaurants have a hard time passing those costs on to customers in the form of menu price increases.”
Additionally, with growing focus on sanitation and safety, restaurants—many of which are already operating with skeleton crews amid the pandemic—cannot afford to cut labor to make ends meet.
Yet while these challenges abound, restaurants are finding ways to decrease costs, particularly through automation. For example, Evansek says that while schedule building and recruiting have traditionally been manual, labor-intensive tasks, some brands have adopted technology which can fully or partially automate these tasks to give managers more time to focus on operations. Though automation has touched nearly every aspect of the restaurant industry, many restaurants have not yet automated one of the most time intensive, low-value activities: cash management.
Counting down drawers, building deposits, and going to the bank are necessary daily activities in running a restaurant. However, these activities can add up to significant payroll hours. Loomis’s SafePoint ecosystem, which includes smart safes, armored car pickup service, change order services, and an online information portal, can help restaurants automate cash handling, reducing payroll costs and refocusing labor inside the restaurant.
“Loomis SafePoint eliminates the need to have restaurants count down drawers multiple times and do the end-of-day deposit, which often takes two people to create and verify,” Evansek says. “SafePoint also gets rid of the additional cost of needing a manager to leave the restaurant to stand in line and make deposits at the bank. On average, SafePoint can save a typical quick-service restaurant 45 minutes to two hours a day depending on how much cash they take in, how often they need change funds, and how far they have to drive to the bank.”
Not only do Loomis’s SafePoint smart safes reduce the time it takes to process cash, but the company’s PlatformSync software gives store operators, multi-unit franchisees, and corporate offices data about their current cash position that can be uploaded into a treasury workstation or ERP system. PlatformSync enables leaders to make better forecasting and scheduling decisions, as well as mitigate risk and improve overall store performance, and is available to restaurants using the SafePoint ecosystem at no additional cost.
“In the coming months, the industry will see more automation, because it’s the only viable way to stretch labor as costs increase,” Evansek says. “We have different ways to help restaurants automate cash handling and the most experienced implementation specialists in the industry. Meanwhile, we’re also learning more automation techniques and strategies every day, which we have the unique ability to share with leading quick-service brands. Though this is a challenging time for operators and for the industry, Loomis can help.”
To learn more about automating your cash operations, visit the Loomis website.
By Peggy Carouthers