Long Lines in Retail—Part II04.23.11
After my first post on Long Lines in Retail [link], my friend Ben wrote the following to me:
I'll add something along the long lines of your retail post since I did retail for 7 years. You generally get customers in waves and at specific times. For the airport, I'd say 7-9am, 12-2pm, 5-7pm, and 8-10pm. Then this work applies to specific days of the week too. Sunday-Tuesday and Thursday there are less customers. A jump in travelers Wednesday, Friday, and Saturday. I'm sure you can find metrics to support this somewhere, I'm going off memory:P
Please take into account that these restaurants are on a lease that is much higher square footage cost than say Palo Alto. Back to the restaurant, you usually see 3-4 people at all times in the restaurant. That means 2 people cooking and 2 people taking orders... if they're smart they will rotate workers in the restaurant to where the bottleneck is. As "Herbie" from "The Goal."
Anymore staff would cause more idleness during the slow phase thus lost dollars.
I have probably a slightly contrarian take to Ben's comments so I wanted to write about it. I'm not necessarily saying Ben is advocating this, but a lot of times, I see businesses that are a little too precious about optimization. When they see idle workers, all they think is money out the door. When they see customers getting value, they think, "How can we charge for this?" I'm a big advocate of sometimes just losing that money. If you have a profitable business model, don't try and finesse the edges, just keep driving the model. My Dad (who used to work as a waiter to pay for college) used to tell me that the restaurant business is really simple. The margins are high so all you need is customers. But if you don't have customers, you can't make it work.
I feel similarly here (and most of these are restaurants / quick service restaurants / etc.) You obviously have to do the math -- but I'd rather my restaurant be staffed to the gills even if the last staff member, or the last couple staff members, I'm only breaking even or potentially even losing a little money on. After all, they're making on the order of what, $10/hour? This will feed upon itself. Imagine you're one of these businesses where the line is out the door because people like the product so much but yet, customers know that they can get in and out quickly. How important is that for someone that works in the World Financial Center? If you're at Goldman, Merrill, etc. -- time is so important and to have a place that you can get served quickly -- well, that will pay many times over in long-term business. There's a burger place out here in L.A. (and other locations too) called "The Counter". They are packed every time I go there but they are very heavily staffed. If it wasn't, I would just stop going there -- too difficult to get a burger. I chatted with one of their servers and she said the only downtime is maybe 330-5pm. That's it. They have essentially trained their entire customer base to know that if you want to eat there, it will always be packed but they'll still get served quickly.
My guess is this has to make financial sense for restaurants (where margins are high) but probably also for retail where margins are less so.