With a focus on supply chain management and product selection, Shuckin’ Shack helps Franchise Owners keep costs down
With its impressive menu full of East Coast seafood favorites, Shuckin’ Shack Oyster Bar offers a casual dining experience that can turn any humdrum day into a beach vacation. In today’s economic climate, as the price of goods continues to surge in the biggest inflation spike since 1982, it’s truly a feat that the seafood restaurant franchise is able to procure sustainably-sourced fresh seafood without charging customers sky-high prices. After all, if an independent restaurant owner were to try to source quality seafood on their own, they’d pretty much have to do everything except pull the fish out of the water, and even that may only save a handful of dollars per catch.
So, what’s Shuckin’ Shack’s secret for managing today’s current inflation spike without passing the rising costs along to customers? Read on to learn how this seafood restaurant franchise enables Franchise Owners to work with food distributors who can offer reasonable prices, thanks to a strong partnership with a laser-focused supply chain management company and simple product selection.
Shuckin’ Shack’s Secret Weapon: Supply Chain Management
With a dialed-in supply chain courtesy of its partnership with an industry-leading supply chain management company, Shuckin’ Shack is able to help its Franchise Owners stay ahead of the inflation curve and get fresh, sustainably-sourced seafood to locations across the country. Stevens Food Group, a leading food-service purchasing and distribution team currently manages over $250 million in annual purchases for a number of multi-unit franchise brands, including Shuckin’ Shack. Its extensive expertise in the food-service industry, along with its vast network of vendor and distributor relationships, allows them to deliver on its promises and make a positive impact on restaurateurs’ bottom line. As prices continue to rise across the board, this level of consistent service has tremendous value for Franchise Owners with little to no experience procuring food inventory or working directly with distributors.
When it comes to inflation, “It’s the same thing that your frontline consumer is dealing with in the grocery store or at the gas station, pretty much everywhere,” said Shuckin’ Shack CEO Jonathan Weathington in a recent interview.
“What the warehouses are doing at this point is they’re cutting SKUs [stock keeping units – the scannable bar codes printed on product labels] and consolidating numbers [by withholding single product units in order to sell as part of a large bulk order],” adding, “they’re saying ‘we’re no longer carrying products XYZ.’ Well, if XYZ was a center of the plate item for your brand, you’re scrambling to find a substitution with virtually no warning. The price of everything from paper napkins to fresh yellowfin is increasing faster than many of us in the restaurant business anticipated, affecting consumers and restaurant owners alike, each and every day.”
According to the experts, the consumer price index has risen 7% over the past year and is currently the highest it has been since 1982. The rising price of goods is expected to continue for at least the next several months or more, making inflation a topic of concern for consumers and business owners alike.
How Supply Chain Issues Affect Food Distribution
So what is causing restaurant owners to have to navigate these rough waters? It’s not like distributors are purposely shorting supply and fulfillment rates. There simply isn’t enough stock to go around, so some distributors are starting to pull items from their inventory. Weathington says, “This can be a disaster for a restaurant owner if the item that can’t be obtained is a key ingredient in a centerpiece menu item. Suddenly, you’re scrambling and making phone calls like a madman to replace what you didn’t even know you were about to lose!”
From the perspective of a food distributor, it’s less about bottlenecks in their operations and execution process, but more of a problem with supply not arriving at the fulfillment center in the first place! John Pizzola, Director of Procurement and New Business at Stevens Food Group, says that the crux of the issue is that there isn’t enough labor to keep up with demand at each stage. As a result, labor-intensive items – or items that require additional processing – are getting more expensive and costly by the day. He explains, “Not only does [the breakdown of the supply chain] start with the manufacturing and the ports, but it also filters down to the distribution as well- the pickers, the drivers, the warehouse employees- not only the labor shortages but the increase in wages that they’re having to pay these employees to come to work and stay at work.”
So, What’s a Restaurant Owner to Do?
Restaurateurs facing supply chain issues have two options: working with a supply chain company with an excellent reputation for service or trying to do everything alone. While attempting to source inventory independently may at first seem like a cost-saving measure, it’s the worst way to go about procuring sustainable seafood, and here’s why.
Mainly, you’ll have no choice whatsoever but to accept sky-high prices and markup your menu accordingly. You’ll need to find partners at every step from packaging to the actual fishing, and the cost of making your own supply chain of sorts is too high, way too high. So, as a solution, you work with a supply chain company that can handle a growing seafood franchise.
Otherwise, you’ll be joining the shrink-flation craze and have no choice but to offer smaller portion sizes of your most popular items. As Patrick Stevens, Executive Vice President of Stevens Food Group, notes, “Inflation is the sexy word, but shrink-flation is the lesser-known cousin that is just as dangerous.” Numbers-wise, it’s an easy business solution, but you’re shooting yourself in the foot because your guests will notice the change and perceive your brand as cheap. You can already see this in the grocery store, and food producers have masterfully kept their hands hidden until now. Many of us are already used to buying less food for the same price we’re used to paying.
But when you can rely upon a seafood distribution process, as the Franchise Owners at Shuckin’ Shack can, you are able to offer guests much more, with greater flexibility and variety. In addition to the delicious items on Shuckin’ Shack’s everyday menu, Franchise Owners in the system have the additional ability to adapt to their individual market with daily chalkboard specials featuring regional favorites. This helps meet consumers where they are, regardless of the location.
Staying ahead of the inflation curve won’t be easy for most restaurants. Yet, the Franchise Owners at Shuckin’ Shack will have a significant advantage in procurement and distribution because of the well-thought-out, insightful processes and partnerships the brand has had in place long before the pandemic.
Working with Stevens Food Group allows the brand to minimize price increases because the items were sourced at market price prior to 2020. From day one, Stevens has been transparent with the seafood restaurant franchise about the challenges they face and how they can best work together to weather the inflation storm.
Ultimately, the best way to fight inflation is to have a solid supply chain you can count on. While you may experience moderate price fluctuations due to unexpected conditions, using a purchasing manager or supply chain management company mitigates most of the pendulum swing pricing that ultimately confuses customers. Restaurant patrons these days expect a quality dining experience, and that’s precisely where Shuckin’ Shack fits into the equation.
Interested in learning more about owning a Shuckin’ Shack seafood restaurant franchise? Visit their franchise website for more details.