The holiday season is traditionally a boon for retail stores, with owners expecting increased traffic and higher revenues tied to shopping events like Black Friday, Cyber Monday and regular holiday gift shopping. However, most restaurants don’t take the same advantage of winter holidays.
In fact, the fourth quarter represents the biggest loss in potential revenue for restaurants that choose to close for holidays. We looked at data from our restaurant customers and discovered that last year, more than $2 million was left at the table because restaurants closed for the holidays. On Christmas and New Year’s, more CAKE-enabled restaurants were closed than open.
So, is it worth it for your restaurant to stay open on the holidays? The answer is maybe – it depends.
Our data showed that holidays, on average, increase revenue by 17% if a restaurant stays open. CAKE-enabled restaurants that stayed open for Christmas and New Year’s saw, on average, between 40% and 50% increases in daily revenue on both holidays.
However, the story wasn’t the same for every holiday. Our data showed that Thanksgiving, Martin Luther King, Jr. Day and Columbus Day all actually hurt restaurant revenues. Those restaurants that stayed open saw a dip in revenue ranging from a one to 14 percent loss compared to daily averages.
In order to decide whether or to stay open on a holiday, you should ask yourself some questions about the landscape:
- Do other restaurants in your area stay open? How many? What does the competition look like? If you are the only restaurant open, you could reap major rewards.
- Are you serving holiday specials? Have you done any marketing for them? Ensuring guests know you are open and that you are offering holiday specials could entice them to dine.
- Is your restaurant conveniently located for holiday shoppers or church-goers? If your location is far out of the way, it may not make sense to stay open.
- Does your community have a large population of people who don’t celebrate Christmas? If so, you could see more business by staying open on Christmas for these community members who aren’t celebrating and are faced with other closed businesses and nothing to do.
- Do local schools and businesses close for the holidays you are considering? If so, you could capture the day-off crowd that doesn’t feel like cooking.
No matter what you decide, remember that hard work on holidays should be rewarded on Mondays. Our team speaks with restaurant clients every day to find solutions for staffing, uncover customer insights and discuss data-based decisions. From looking at our data and having these conversations with operators, we know that Mondays are consistently the weakest days for restaurants to bring in revenue. Because of this, we recommend that staff are given time off on the Monday following a holiday if your restaurant decides to stay open, both to save on overhead costs during a slow day and to reward hard-working staff. What’s more, if finding staff to work on holidays proves challenging, consider offering holiday bonuses to keep your staff happy and give them a share of the increased holiday revenue your business enjoys.