Sunday, March 28, 2010

A Long Rant (Worth Reading If You Think You Want to Own a Restaurant)

Despite "random factors operating in our favor" for the past five months, I am daily smacked upside the head by the peculiar challenges of operating a small independent restaurant just a few miles in the wrong direction from the Big City.

The Hot Flash Cafe has been "fired" as a customer by a bread company, a wine distributor, and, most recently, the guys that came out once a month to clean our grease trap. Each time, it's been the culmination of a months-long struggle to obtain some kind of reasonable level of customer service from the company in question. And each time, in the end, it was made abundantly clear to us that our measly little off-the-beaten-track account was not worth the bother/expense/effort to maintain it. So we were invited to go scratch.

The ongoing saga of my relationship with our grocery purveyors has basically ended in a standoff. We deal with the "Big Two:" Sysco and FSA (Food Services of America.) I inherited an account with FSA when we bought the cafe in 2006. Much of the menu had been built around products exclusive to FSA, and since this particular aspect of our new enterprise was not broken (yet), I did not attempt to fix it. I was given to understand, at the time, that part of FSA's mission was to be "small, local business-friendly." And indeed, they seemed to be—at first.

As time went on, that friendliness disintegrated. They began to outright refuse to split cases of some products, and jacked up the price of "onlies" on the ones they would split. For example, if I wanted black olives, I was going to have to purchase a case of them (that would be SIX #10 cans, probably at least a two month's supply at my rate of consumption.) Not only is it not "cost effective" for ME to purchase that much product in advance, but in my little café, storage space is at a premium. I have nowhere to KEEP 6 huge cans of olives for two months. On the items that they would condescend to continue splitting cases, I would now have to pay almost double the price per can. Can you say, "No way in hell?"

After about eighteen months of this chipping away of adequate service, I was assigned a new sales rep that I disliked on sight, and who turned out to actually be a slimy, dishonest jerk. So I started shopping for other options, and turned to Sysco.

The least of my expectations of Sysco was that, being a much larger company than FSA, they would have the buying power to blow FSA's pricing out of the water. I reasoned that if I had to suffer with a slightly lower level of individual customer attention, I could live with that. I was actually rubbing my hands together at the prospect of some really rosy food-cost numbers coming out of my disenchantment with FSA.

I learned quickly that my assumptions were utterly erroneous. When the Sysco rep called on me, I handed him my FSA invoices and said, "Show me your pricing on these or comparable items." He flatly refused to indulge me, saying, "You know, I've spent hours doing this for prospective accounts only to have them decide not to purchase from me. So I really just don't do that anymore." SAY WHAT? I don't know why I didn't run screaming from the relationship then and there.

When I finally did cajole the guy into showing me his pricing on at least a small list of items I used every day, it became obvious that Sysco would be no bargain. They undersold FSA on some things, way over-priced them on others. And then there was the challenge of trying to find comparables in the Sysco inventory of all those things upon which my menu was based. Some of my most popular items—like certain salad dressings—were exclusive to my old purveyor and could not be had from Sysco at any price.

Some of the items I had been purchasing from FSA had been "confined" by Sysco (which means that some large account had stipulated that an item be sold to them exclusively), so while Sysco carried the item, it was unavailable to me. There was a concept I had never come across before. It's not enough that my location severely limits my choices of who I can purchase from. Now I find that, while the companies that do deliver out here are the largest in the region, there is a long list of items they carry that I CANNOT BUY.

One begins to wonder why the deck is so obviously stacked against small operators like myself; and where the folks who live in small towns—without large enough population bases to attract the large chains with whom the purveyors prefer to do business—are supposed to eat.

But—back to my own personal saga of huge purveyor vs huge purveyor. As it turned out, dealing with Sysco was simply "same crap, different day" as compared to FSA. But because I was righteously put out with FSA, I bit the bullet and jumped to Sysco. I struggled for over a year to match some of the items I had purchased from the other guys. Some things I never did find, so I had to change my menu to reflect the items that were available to me now. The Sysco rep turned out to be no bargain, either. I'm constantly having to drag information out of him that he is either unprepared or unwilling to provide. And yet he can't understand why I won't do more business with him.

After a year of constant hassling with Sysco, I finally realized I was never going to get the kind of service I expected/desired from them, so I called back FSA. I had my new sales rep (turns out my indictment of the old sales rep was instrumental in his eventual dismissal) prep a price list for me, and I contented myself with the fact that at least I would be able to go back to receiving some of the "exclusive" grocery items I never could replace with Sysco products.

About the same time, the economy tanked. Both Sysco and FSA, losing accounts by the fistfuls, sent the sales reps out into the field charged to aggressively acquire any and all business left out there. Suddenly, it seemed as if both the Big Two not only remembered who I was, but they were actively interested in acquiring my account. Sales reps and supervisors and managers and the company dog all went out of their way to contact me personally and assure me they would do anything to get our business.

I took them at their word…for about five minutes. Until it became obvious that "anything" did not include discontinuing their policies of refusing to split cases or applying usury up-charges for condescending to do so. Nor would they loosen up the large chains' hold on the best selection of items. And they would continue to scoff at becoming competitive (price-wise) with the "cash and carry" chains where I do most of my purchasing. (And yet they would act confused as to why I would choose to go and purchase an item, rather than have it delivered for three or four times the cost…?!)

So, yeah…I've had it with them. I have tried to be an empathetic consumer. After all, I run a business, too, and I appreciate it when my customers don't ask me to jump through hoops that lose me money. So my own personal policy has been to make every attempt to meet my purveyors halfway. Unfortunately, this resulted in me doing all the giving in and them doing all the taking advantage. Not a reciprocal arrangement at all…after all, who was I—this dinky little small-town café—to expect them to take a hit to their profit margin just to make it easier for me to do business with them?

Ultimately, I've decided to structure my purchasing to fit MY needs. If it's all about business models and profit margins and every man for himself, then I can play that game, too. I've distilled the list of products I can afford to purchase from the delivery companies to about a third of the total items we use. I order from BOTH Sysco and FSA, so I can have access to the products I always preferred from FSA, and to some of the newer products I began purchasing when I switched to Sysco. Now, I take advantage of having a CHOICE between two grocery houses; I can order any given item from whichever place offers me the best quality or price, and not be forced to settle for an "acceptable substitute."

Nobody is happy with this arrangement, least of all the grocery companies. It galls them that I can, and will, order the minimum it takes to get them to make a delivery. And I generally order only the items with the lowest margin. So they aren't making a whole lot of money on me. And because of the (inequitable) way their compensation is structured, my sales reps probably aren't making any money at all on my account. Too bad. It seems to me that what they're getting (nothing) is adequate compensation for the effort they are putting into making me a satisfied customer (none.)

Ah, yes, it has been quite an education—this owning a restaurant in a small town. Sometimes I'm glad that I really had no idea what I was doing when I went into it. Because it has turned out to be nothing even approaching anything I could have imagined.

And yet…we survive.

1 comment:

cw2smom said...

Ugggghh! Reading this makes me crazy for you! I certainly don't understand why those companies have to be so unaccomodating! I am sooooo glad I am not a small business owner. Bless your heart, you are working HARD my dear friend! Lisa/CW2sMom (Stopping by my blog and yours for a few minutes for the first time since November!) If I don't update today...all is well. XO!!!