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Here at Saddleback, we sell our BBQ sauce locally and have had discussions with Meijer to get our products into their stores. Many local businesses have similar desires, but getting into such a retailer comes with challenges. Meijer is concerned with two critical factors in determining whether to take on a new product: velocity and productivity. 

Velocity in a retail setting is generally defined as the rate of sales that a brand or SKU achieves through a store, group of stores or market area over a defined period of time: 

V = Sales per Time Period / Unit-of-Distribution

Velocity is all about how fast your product sells, which is of major importance to a large retailer like Meijer.  A strong velocity shows a retailer that your existing base of stores is experiencing growth, and instills confidence that your product will sell similarly in their store. Here’s an example of how it works: 

Let’s say a particular retailer is interested in your weekly velocity, or number of units sold per week per store.  Assume further that you have sold 12,500 units over 6 months across 25 stores.  

1. Start by calculating units per year: 2 * (12,500 units) = 25,000 units per year
2. Next, get your weekly sales: 25,000 units / 52 weeks = 480.77 units per week
3. Finally, divide this number by the total number of stores: 480.77 / 25 =19.23
4. Velocity = 19.23 units per week per store

A high and increasing velocity is a sign of brand strength, and demonstrates to a retailer that you’re gaining new customers, obtaining repeat purchases, and that your product makes overall business sense.

Productivity:

Productivity in a retail setting is generally measured by multiplying the total sales of a particular product by that product’s price:

P = Total Sales * Retail Price

Productivity is all about the value of the product you're selling - customers want it and will pay a high price for it. From a retailer’s perspective, while they want your product to have a high velocity and sell quickly, they also want to maximize their margins and profits. Combine a high rate of productivity with a high velocity and you are a large retailer’s dream come true.  Building off the example above, here is how productivity can make or break your product: 

Let’s assume, as above, we have a product with a velocity of 19 units per week per store. At 25 stores, this is 475 total units per week on average. The weekly productivity of these total sales will depend on price: 

1. The product retail price is $1.99: P = 475 * $2.50 = $945.25
2. The product retail price is $24.99: P = 475 * $24.99 = $11,870.25
3. The product retail price is $99.99: P = 475 * $99.99 = $47,495.25

One sees quickly how pricing can significantly affect the productivity rate. That is why it is important to be thinking not only about selling quickly, but selling a high-quality product that is going to bring in meaningful dollars to the retailer. 

The bottom line is that both factors are of equal importance.  If you are a business trying to grow a product, your goal should be to get into as many retailers as you can, with an end goal of getting into a large-scale retailer.  Any major retailer is going to care deeply about velocity and productivity, so understand these factors well and prepare substantial data on them in advance of any meeting with a retailer.

Delegation is one of the most difficult aspects of running a small restaurant, and often managers run into the common problems of either abdicating too much responsibility or micromanaging the employee. A couple of tools managers can use to more effectively delegate are the “Ladder of Leadership” and “Task Relevant Maturity.”

The Ladder of Leadership is the idea that employees should communicate differently as their skills advance. An entry level employee might communicate with “tell me what to do”, while a more senior employee should communicate with “I have done the following.” This image represents the idea: 

Managers and employees alike should be thinking about where they rank on the leadership ladder, and should try to move up the rungs. For employees, try to challenge yourself to advance beyond simply following orders to a point where you can make well-educated recommendations about how to solve problems or how to complete tasks. For managers, be actively thinking about where employees are on the ladder when assigning tasks. You should not expect communication at a 5 from an employee operating at a 1-2 level. Managers should also be openly discussing this idea with employees, and working with them to develop their skills and move them up the ladder.

Hand in hand with this idea is Task Relevant Maturity, or how effectively someone can complete a specific task. Every person has different TRM for each task, and is not necessarily connected with seniority: very senior people within the company can have low TRM for a given task. This image represents the general idea:

Employees with low TRM need more structured, task oriented management at the 1 - 2 levels.  Managers should not expect these employees to efficiently complete tasks without strong guidance. Employees with a medium TRM are more individually oriented, but still require manager support and open communication consistent with the 3-6 levels. Employees with high TRM should be managed at the 7 level: they require only minimal involvement by the manager and have the capacity to set objectives and meet them.

To conclude with some high level overview, it is important to remember that the Ladder of Leadership works hand in hand with Task Relevant Maturity. For any given task, the manager and employee should discuss these concepts. Work together and learn at the assigning of the task what the employee’s TRM is and agree on where you both want to be on the Ladder, and communicate on the basis of that agreement. Finally, always encourage people to move up the ladder, even if this makes them uncomfortable. Advancing these skills is important for personal growth and development, and applicable to any workplace environment.

January 27, 2022 - Saddleback BBQ in Lansing Michigan sent a survey to ~100 Michigan Restaurant owners.  The results were startling.  72.73% of restaurant owners reported their sales in 2022 are lower than previous years.  Of those restaurant owners that chose to disclose how much their sales are down, 50% of them reported sales declines of 30-40% in 2022.  

“This is very concerning.  Our same store sales at Saddleback are down an average of 33% compared to previous years. We were worried that other Michigan restaurants may be facing similar challenges, which is why we wanted to send out the survey. While this survey is not scientific, it is still quite concerning what was reported by our friends in the Michigan Restaurant community.”  - Matt Gillett, Co-Owner of Saddleback BBQ in Lansing, Michigan. 

“The local community stepped up in a big way to help restaurants, but sadly, we aren’t out of the woods yet and we need support.  Every meal that you choose to have at a locally owned restaurant is supporting a family in your community.  We need your support.” - Stefan Nava, Owner of Danzon Kitchen in Grand Rapids, Michigan. 

“We opened right before the pandemic started and we are thankful that we are still here and surviving. We are grateful for the support we received from the community and we can't say how much we appreciate it. Our sales have been suffering so far in 2022. It sure does make us worry how local businesses can survive another year. Compared to January of 2021, our sales are down by about 35%. Surviving has been difficult with the extreme rise in costs from raw materials to everything else while also suffering decline in sales. We hope that us and other local businesses can survive this year and for many years to come because many families rely on the income from the local businesses.” Rae Suboh, Owner of Bread Bites in Okemos, Michigan.   

While the Saddleback BBQ survey data is admittedly a very small sample of the thousands of  Michigan Restaurants, it matches the survey data from The National Restaurant Association (NRA). New data from their 10th COVID-19 Operators Survey shows that restaurant recovery is paralyzed and nowhere near complete. 

According to the National Restaurant Association 10th COVID-19 Operators Survey:

• 88% of restaurants experienced a decline in customer demand for indoor on-premises dining because of the omicron variant.
• 76% of operators report that business conditions are worse now than three months ago.
• 74% say their restaurant is less profitable now than it was before the pandemic. 

Link to full anonymous survey data from Saddleback BBQ Survey: 

https://docs.google.com/spreadsheets/d/1A9X-HmrxnABH7NcF-dGNz86yEn3z7NZfDXYAMAae9pM/edit?usp=sharing

About Saddleback BBQ & About The Survey Data

Saddleback is a restaurant group in the Greater Lansing area with locations in Okemos and Lansing.  This survey was sent to 84 Michigan Restaurant owners.  11 of those restaurant owners responded and 4 of them voluntarily chose to disclose their sales decline numbers.  This is admittedly a very small sample of the Michigan Restaurant Industry, the sales declines tend to align with what is being reported by other restaurant news outlets and national food chains.