7 Hidden Reasons Why Restaurant Businesses Struggle with Sales (And How to Fix Them)

When it comes to owning or running a restaurant business, ensuring a steady stream of sales can be a challenging task. There are many factors that can impact a restaurant's ability to generate consistent revenue. From lack of visibility (no one knows about your restaurant), to lack of an amiable atmosphere (the air is too somber or dull), to rude waiters/waitresses (this one speaks for itself), the reasons are numerous. 

So first, I’ll start with identifying these reasons. This is very important for implementing the following effective solutions I’ll give right after. For you to have searched for this article, congratulations, you’ve done the first step: Knowing there’s a problem and seeking for a solution. Now, let's delve into the 7 secret reasons why restaurants businesses struggle and often face sales challenges as well as explore affordable and top solutions to boost their success.

Why Do Many Restaurants Fail and How Can I Avoid It?

1. Lack of Digital Presence

These days, it’s not enough to have a good cook, a good physical location, good staff or a good manager. Having a strong online presence has become more essential for any business, including restaurants. A common reason why some restaurants struggle with sales is their inadequate digital presence.

Potential customers often search online for dining options, reviews, and menus before making a decision. If your restaurant isn't easily discoverable online, not only could you be missing out on valuable opportunities, it might make people think you’re not legit or professional. In summary, no one knows you exist. Well, except for people living close by. Make your presence known online.

2. Poor Quality or Outdated Menu

The menu is the heart of any restaurant. Whether it’s a coffee shop, or an ice cream truck, have a menu. Even McDonalds has a menu. It might be short, but a menu is a menu. A menu that lacks variety, quality, or appeal can discourage customers and affect your restaurant sales negatively.

Moreover, if the menu is outdated and doesn't cater to current culinary trends or dietary preferences, it may fail to resonate with your target audience. So, if you’re wondering why restaurant businesses struggle with sales, or, to personalize it, why your restaurant is not making sales, try to review and reevaluate your menu. It’ll definitely help to provide some sort of insight on the next path to take. 

3. Inconsistent Quality of Food and Service

Consistency is key in the restaurant industry. If customers have a great experience during one visit but encounter issues like subpar food quality or poor service on another occasion, they are less likely to return. Inconsistent experiences can erode trust and affect repeat business. If you started well and have started losing sales, this might be a reason. 

Overconfidence is never a good thing, especially as a restaurant business owner. Don’t feel that just because you have customers regularly, they’ll stay even though you hike prices unnecessarily, or start using cheap products, or don’t generally take care of your restaurant’s image. Take note, your customers see something in your restaurant, that’s why they keep coming back. If that thing is gone or mishandled, why should they come back? If it’s you, will you keep patronizing a business that cares only for its profit and not its product?

4. Lack of Effective Marketing Strategies

Even the best restaurants can struggle with sales if they don't have robust marketing strategies in place. Simply relying on word-of-mouth or foot traffic may not be sufficient to sustain business growth, especially in competitive markets. Another way to put this is: have a genuine and smart business plan. In everything you do, it always pays to plan ahead, for both growth and potential difficulties that might arise. 

This plan should encompass various tactics such as digital marketing, social media engagement, partnerships with local businesses or influencers, and promotions to attract new customers and retain existing ones. By proactively planning and implementing effective marketing initiatives, your restaurant can not only increase visibility and generate buzz, but also ultimately drive sales growth among the toughest of competitions. Besides, let's face it, the competition is pretty tough out there, no matter the niche you’re in. So try to have a working strategy. 

5. Pricing and Value Perception

The perception of value plays a significant role in a customer's decision to dine at a restaurant. If the prices of your products are too high, especially compared to the perceived value of the food and experience, it can deter and discourage potential customers. It's very important to conduct thorough market research to understand pricing trends in your area and among your target audience. This insight will help you set competitive yet profitable pricing for your menu items. 

You cannot be charging $20 for a cup of juice when your competition is charging $10 for the same cup, especially when you’re new in the market. Consider factors such as the cost of ingredients, your competition, the already established market price, overhead expenses, and industry benchmarks in other areas when determining your pricing strategy. Don’t in your bid to make as much profit as possible, ruin your restaurant’s image. Chances are you won’t even make that profit that you’re targeting. 

6. Limited Online Ordering and Delivery Options

In recent years, there has been a tremendous shift towards online ordering and food delivery, especially after the global pandemic. Any restaurant that is currently without convenient online ordering or delivery options will definitely miss out on significant sales opportunities. Customers now expect the ease and speed of ordering food online. 

For we, the introverts, ordering food online has been a life-saver. No exaggerations. I cannot count how many times I’ve ordered drinks, snacks, cake, decorations and of course, food online. It’s almost a daily habit at this point. So if your restaurant is not online, or does not have an ordering feature, just try to imagine the amount of customers that your outreach is limited to. The people that use and need your products will definitely choose competitors who offer these services.

To attract more customers:

• Invest in an efficient online ordering system. 
• Partner with popular food delivery apps to expand your reach. 
• Make sure your website is user-friendly and mobile-optimized.
•  Highlight your delivery and pickup options on your homepage. 
• Use social media to promote these services and offer special deals for online orders.

By doing so, you can tap into a broader customer base and boost your sales. Additionally:

• Ensure that the delivery experience matches your in-house service quality. 
• Train your staff to handle online orders with care and precision. 
• Package your food securely to maintain quality during transit. 
• Provide clear instructions for customers to track their orders.

With these steps, you can enhance customer satisfaction and encourage them to return and keep patronizing your restaurant/business.

7. Failure to Adapt to Changing Consumer Preferences

Failure to adapt to changing consumer preferences can hurt your restaurant's success, can hinder, can stunt, can absolutely obstruct your restaurant’s growth and success. Consumer preferences and behaviors continually change, they’re humans not robots, and as a restaurant owner or manager, you must keep up to stay relevant. Ignoring new trends or not offering popular dietary options can lead to lower sales and fewer loyal customers. For example, many people now want plant-based or gluten-free options (Depending on the country you’re in of course). If your menu lacks these choices, you might lose out to competitors who do offer them.

To fix this, regularly research market trends and ask customers for feedback. HAVE.A.REVIEW.SYSTEM. I cannot stress this enough. Also, always update your menu to include new and diverse options that meet various dietary needs. Promote these new dishes on social media and other marketing channels to attract attention. By staying aware of what customers want and quickly adapting, you can keep them happy, encourage repeat visits, and stay ahead in the competitive food industry.

Conclusion

I’ll end this article with this: Everyone wants their business to grow, flourish and basically thrive, no matter the niche it's in, or how tough the competitors are. At least you’ve taken the first step today, which is identifying these 7 secret reasons why restaurant businesses struggle with sales. 

Next step is finding out how to fix them. By focusing on improving digital presence, menu quality, consistency, marketing strategies, pricing perception, online ordering options, and adaptability, your restaurant can create a compelling value proposition that attracts and retains loyal customers. Experts have talked more in detail about the solutions in this article: link.

Remember, success in the restaurant industry, or any other industry for that matter, requires continuous innovation, responsiveness to customer needs, and a commitment to delivering exceptional dining experiences. So what are you waiting for? Start implementing these solutions now, trust me, you can be the one to pave the way for sustainable growth and profitability in your business, despite the competitive market.

Good Luck!

All images are from istockphoto