Assassination by Misinformation - Restaurants Endure Public Scrutiny and Innuendos
Westfair Communications - Fairfield County Business Journal
By Linda Kavanagh
Online Version Here
The conversation during a recent social event in Stamford went a little something like this:
Seems to be a lot of rumors flying around about the restaurants closing in Westport. Why is that?
It’s because nobody has the whole story and everyone likes to think they are in the know.
But I hardly ever hear of other industries having so much gossip and conjecture surrounding them.
That’s because nowadays everyone’s a restaurant critic…and not just about the food, but the entire industry.
Sometimes this is how articles are born; a simple dialogue or debate as to the merits of a particular subject. In this case, the utter ridiculousness and blatant scrutiny a restaurant has to endure, whether they are on top of the world, just opening its doors, or even closing them.
“They seemed to be doing well and I’m just very sorry to hear they’re closing,” read a quote in a local newspaper about a long-time restaurant in Westport closing. Prior to that, speculation of this fan fave closing was swirling around town. It was a shame, as the restaurant should have been enjoying their retirement stage, and the public and media attention should have been focused on celebrating their success. Instead, it fell prey to a cynical and anti-climactic ending. Do people comprehend that a restaurant can close by design? Whether it’s due to a well-deserved retirement, a great offer to purchase, or a change in career path, restaurants can, and do close for a myriad of positive reasons. But, I guess that’s no fun to talk about, is it?
“What people seem to forget is that a restaurant is a business, like any other, “reinforces Mark Moeller, a restaurant consultant and the owner of the Recipe of Success, “But unlike other industries, consumers in this day and age feel a certain closeness or personal connection to a restaurant. Or they feel a strong sense of awareness through the numerous media outlets and public platforms that now seem to write about restaurants and the players involved, creating an inflated or false sense of knowledge.”
Rumors about the restaurant industry aren’t anything new. In fact, we restaurant folks have learned to tolerate and laugh them off. I was recently told by a (reputable) food blogger a story about how a hugely successful restaurant owner in South Norwalk “couldn’t make it because the concept wasn’t a good fit for the area”. When I asked where she had acquired her information, she could only reply that “everyone knows about it”. But alas, she couldn’t have been more mistaken. This owner not only sold the restaurant for a profit, the deal included the rights to the concept and their active consulting role in maintaining the restaurant’s standards, menu integrity, and even the cocktail recipes! How on earth do these rumors get started? Is it from a resentful employee? Perhaps. Or does it stem from a consumer’s desire to have information – juicy, negative, gossip-spreading misinformation?
Misconceptions and gossip about the restaurant industry are just as prevalent on a larger scale as they are on a local level. We’ve all heard the myth that “90% of all restaurants fail in the first year”, as was so unintelligently spewed from the mouth of Chef Rocco DiSpirito on his botched reality restaurant show.
“There have been numerous studies done that say this is simply not true,” says David Sederholt, COO of New York’s Strategic Funding Source and a former chef/restaurant owner, “Not only has this statistic never been proven or backed up by any reputable industry source, if this had been true, it is unlikely that the restaurant industry would have been growing at double digit rates prior to the current recession. “
H.G. Parsa, associate professor of hospitality management at Ohio State University debunked this myth upon conducting a longitudinal study of restaurants in Columbus, Ohio, which showed only a 57 percent to 61 percent failure rate over a three-year period of time. In addition, there is no significant difference in the failure rate of restaurant start-ups and small business start-ups in general. According to the National Restaurant Association 30% of new restaurants fail in the first year, and of those that survive, another 30% close in the next two years. To that end, the Small Business Administration’s Office of Advocacy, as reported by Inc. Magazine, found that the two-year failure rate for all small businesses is 31%, and after five years the rate increases to 49%. You do the math.
“In fact, CNN Money reported the small biz loan failure rate hitting 12% this year, whereas SFS has funded thousands of restaurants and our default rate is a mere 6.25% over 10 years, “said Sederholt.
Let’s not confuse these failure numbers with Trulia economist Jed Kolko’s research showing Fairfield County as having more restaurants per capita (27.6 restaurants per 10,000 households ) than anywhere else in the United States except for San Francisco (compared with 39.3). Locally, this is a supply and demand issue, and while it can certainly impact failure numbers, it can also produce a robust and competitive market.
Yes, the industry is a narrow-profit, high-risk operation with frequent staff turnover – there’s no denying that. It’s prone to public scrutiny more than any other consumer product or service industry, and given the fact that its reputation is based upon perception and not the facts, no wonder we, as an industry, get torn apart limb by limb.
A restaurateur, a chef, and the service staff aim to please their customer. In a perfect world, the restaurant succeeds the majority of the time. But in today’s age of radical online persecution, whether it’s in the form of an emotional release on YELP, a jabbing tweet, or even a personal blog rant, a restaurant can no longer fall short – ever.
“Unfortunately a lot people believe everything they read,” says Kate Schlientz of Intoxikate, a seasoned food writer and the radio show host of Fork This aired on Greenwich, CT’s WGCH Radio, “and any negative review can sting a bit as some of these review outlets have a substantial reach. But ultimately, true food enthusiasts get out there and try places for themselves and are not influenced by these review forums.”
“Everyone has a bad day, “says Moeller of both the restaurant and the customer, “but typically, instead of the customer notifying the restaurant of any negative issues with their food, service, or the overall experience, they tend to react in a way that brings others into the mix before the restaurant even has a chance to address or rectify.”
Perception plays a major role in the public’s, and even the media’s view of a restaurant. Whether that is their expert opinion on the state of one restaurant’s business, or their qualified background in ascertaining a restaurant’s potential for success, we’re just a bunch of know-it-alls when it comes to our local dining scene. In the case of 2 restaurants in Westport located side by side, one of which seats 32 people and the other with over 150 seats; if you put 25 people into the small restaurant, it’s a packed house. Whereas, 25 people at the place next door barely fills up the bar. The larger restaurant is instantly tagged as “failing”. This scenario happens more often than not and in Fairfield County alone, the majority of smaller size restaurants, based on cost of goods and services, as well as fixed costs, are at a clear advantage at their baseline.
“The frontline is your bottom line, “explains Paul Fetscher, President of Great American Brokerage Inc., a New York and Connecticut based firm specializing in Restaurant Real Estate, “Restaurants create illusions. A larger restaurant must adapt their space to feel just as inviting (or busy) with 20 people as it would with 75 people, and their best bang for their space is to book larger parties. Smaller restaurants, while having it easier from a visual perspective of always looking busy, often have the challenge of turning the tables enough to reach profitability and can’t book these large parties, which is often why their price points tend to be higher – it’s cause and effect for both size restaurants.”
While a consumer can’t typically be held accountable for spreading rumors or putting a restaurant on edge, a media outlet can, and should be. Thrilled with the removal of the number and star ratings from most of Connecticut media’s restaurant reviews, I love how the reader is now forced to actually read about the restaurant and not predicate their willingness to try a restaurant based upon a rating. With that said, there is a responsibility the writer has to its readers, and there is a respect that needs to be shown to the restaurant. But without getting into the age-old debate over “journalistic integrity” and “unannounced visits”, let’s remember people – it’s just food! We’re not solving the world’s problems and we’re certainly not doing good by our readers if we try to sway them in one direction or the other. Best just to TELL it and not SELL it - one way or the other.
Let’s celebrate the talent behind the scenes, the originality of the chef, the menu that is not ours to craft, and the atmosphere that’s been designed. The writer may not appreciate a loud restaurant, but the reader might. The reader may be looking for a fusion style restaurant, but the writer is a food purist, or worse yet, a vegetarian! Who’s to say what’s “traditional” or “authentic”? For example: Pepe’s Pizza is coal-fired and not wood-fired – does that mean they don’t serve “authentic” Neapolitan pizza? Who’s to say? Certainly not the writer or even the consumer. All that’s important is Pepe’s crazy popular pizza!
“Really what it comes down to is context and personal taste, “explains Schlientz, wearing her food writer’s hat now, “Food is so subjective. You don’t know who the writer is or where they’re coming from when they give you their opinion. Why lower your expectations of a place because of what a writer wrote, or worse, why get your hopes up only to be disappointed and clearly not have the same tastes as that particular reviewer?”
Adding insult to injury is the nasty four letter word restaurants cringe over upon hearing – YELP. Straight from the horse’s mouth, this writer got the scoop on how this power listing site manages a restaurant’s reviews. Did you know that at the end of a restaurant’s review page there’s a line in gray writing that says “Other reviews that are not currently recommended”? These are reviews that YELP chooses not to show due to a set of criteria (and software secret sauce) in order to “maintain credibility”. Huh? Unfortunately, not only are many of these reviews legit – they are positive and restaurant owners aren’t able to benefit from them. The negative ones are more credible than the positive ones we were told. Really?
Yes, it’s 100% true that disgruntled employees (more than competing restaurant owners) try to sabotage restaurant reviews. And yes, restaurants try to buffer negative reviews with positive ones. We all understand why there needs to be some policing, but, straight from Yelp, did you know that first time Yelpers are immediately flagged? Shorter comments on Yelp reviews are also the first to be flagged, whereas the long-winded, wannabe food critics with emotional issues that go on and on but say nothing constructive, are viewed by Yelp as “legit Yelpers”. OMG. Often these poor souls are yelping their every meal. So sad. Yelp actually recommends that the restaurants restrain from encouraging the public to review them because depending on the type and the amount of reviews coming in at any given time, these are subject to be hidden from the reader. Conversely, TripAdvisor sends their restaurants a decal for their window encouraging people to “Share Your Experience on TripAdvisor”. Go figure.
The best resource for restaurant information is YOU, the consumer. You decide where you enjoy eating and where you are going to spend your money. Don’t let anyone else do that for you. Show your approval by patronizing a restaurant and demonstrate your disapproval by not showing up. Your actions will speak louder than your words…and this way you don’t have to worry about getting the facts right.