food costs to higher labor costs to an escalating energy price situation,” says Hudson Riehle, senior vice president of research and information services at the National Restaurant Association. Restaurants also operate in an extremely competitive environment where customers have many choices.
As stores try to stay competitive by not raising prices, higher costs are putting pressure on the usual 5% or 6% quick-service restaurant pretax profits. One way restaurants drive sales volume, which increases profit margins, is to improve staff to serve customers better.
Employee turnover at James’ restaurants is 60% a year and not the typical quick-service 130% to 150% rate. “What we try to do is recruit really great people, show them that they have a career opportunity with our company, train them, develop them, and retain them,” says James. “If there is any one key to our organization’s success, it’s the people we have on our team who are in the stores delivering excellence every day.”