Amtrak Diner and Food Service Discussion

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jp1822
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by jp1822 » Fri Feb 05, 2016 7:29 pm

Arlington wrote:
AgentSkelly wrote:
And then it is still a serious question of whether, even if open those longer hours, the diner could ever charge high-enough "walk up" prices to pay for the additional food and labor. There's an unstated assumption that what's wrong with the diner are its fixed costs (and that food itself is profitable, if Amtrak could only sell more of it). We'd like to think so, wouldn't we?

If one choice choice is keeping both a Cafe and a Diner open and trying to generally sell more $ worth of food, surely another surer-bet is removing the diner entirely and trying to make the Cafe busier and higher-ticket. An upgraded, busier Cafe seems the surer bet because it starts with all the right elements of a "scalable" business model: lower labor costs (lower staff, less labor in each item), and standardized items.

Adding frills/fanciness/better stuff/higher-margins/more sales to the low-cost Cafe is probably a more doable plan than trying to strip down, speed up, or scale up the Diner. That's the lesson of the Innovator's Dilemma,
- the "weak" hydraulic digger "grows up" to destroy the steam shovel
- the tiny, bare bones japanese cars (think 1978 Civic or Corolla) grows up to be luxury cars (but GM & Germans can never quite "scale down")
- the simple McDonalds (hamburger or cheesburger) grows up to be a broad menu restuarant (but few restaurants ever successfully stripped down to compete with McDonalds)
Let's break this down for a moment - without any assumption of customers or labor. Let's look at the top line.

Food Sales LESS Cost of Food Sales equals a positive gross profit.

If Amtrak is not achieving that, then they need to go back and re-negotiate with the vendors supplying their food costs. It is common sense that anything priced on the café or dining car menu should be priced to achieve a profit (again, not considering labor or what the mix of items sold is). If food and beverage items are not - on a 1:1 basis - then Amtrak has a serious problem to contend with. What evidence is out there on a granular level that food prices listed on café and dining car menus are not greater than what their cost is? The layperson doesn't have that at their disposal and I am not sure if those working food cars even know.

What is known is that labor costs are largely a fixed cost for ANY train. Even a Cascade train is operating on a particular timetable schedule. The unknown is whether a passenger will come to the lounge/café for a last minute meal or drink before departing. So any inventory automation module should be welcomed and if it extends hours operation of selling food/beverages - so be it.

By the way the Cascade café car operates with a totally different menu than what you'd find on Midwest, Western, and Eastern café cars. Frankly - it's better food and worth it. The Cascade café in my mind is more of an upgraded operation in terms of its selection. The food served here should be a model for other café cars. The only other café car that I've been impressed with quality and type of food is the Downeaster service.

I agree that one way to go is upgraded, busier Café cars - for all Amtrak trains. The trains to Lynchburg, VA that operate on the NEC - seem to always be busy!

But one now needs to apply that same concept to the Diner operating on the long distance trains. Right now, the Diners are stripped to their bare minimum in my opinion. What can be added back (e.g. a "special") that would yield a greater gross profit margin? I remember one time they had crabcakes as a special on the Capitol Limited. They were VERY popular.

And yes, Amtrak is going to get the sleeper car passengers for most meal seatings. The accounting just needs to be done to ensure a proper division of the house so that the "sleeper" is allocated its proper revenue portion, and the Diner gets allocated the cost of a full breakfast, lunch and dinner. Again, the way Amtrak has been going at this lately is - "let's not offer the salad unless it is requested," "let's not offer descent desserts so as to get more money out of the sleeper allocation," "let's limit the number of drinks offered," "let's downsize the breakfast and/or lunch option." In this manner all that is being done is charging the same in $$$ for a sleeper and receiving less in the diner. Amtrak hasn't addressed the fact that they are still faced with fixed costs of the onboard dining car crew........What coach passenger is going to come to the diner for some of these downsized breakfasts'? A captive audience - Amtrak has to make it a goal to attract passenger to the diner if they want to reduce the dining car loss or have less of a loss. My opinion is that the diner will NEVER operate at a profit or break-even.

Gilbert B Norman
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by Gilbert B Norman » Fri Feb 05, 2016 7:54 pm

jp1822 wrote: Food Sales LESS Cost of Food Sales equals a positive gross profit.
Mr.JP, we are both CPA's in this life, so it is sales -less: cost of sales less: shrinkage.

Sometimes I wonder if the shutdown some hour before arrival "to do bookwork" is simply to put the fear of management into the not directly supervised workers.

jp1822
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by jp1822 » Fri Feb 05, 2016 8:44 pm

Agreed on the CPA front!!! I didn't want to complicate too much with "shrinkage." Let alone where and how forensic accounting could have a field day with this whole ordeal!

leviramsey
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by leviramsey » Fri Feb 05, 2016 10:23 pm

jp1822 wrote: And yes, Amtrak is going to get the sleeper car passengers for most meal seatings. The accounting just needs to be done to ensure a proper division of the house so that the "sleeper" is allocated its proper revenue portion, and the Diner gets allocated the cost of a full breakfast, lunch and dinner.
When you say "Diner gets allocated the cost of a full breakfast, lunch and dinner" are you including all diner costs? If you are, then on quite a few trains the implied proper revenue portion for the sleeper (as an upgrade over coach) is negative: the diner cost exceeds the sleeper premium. For those trains, the problem might better be understood as sleeper revenue (whether due to fares being too low or capacity being too low) being too low to support a diner.

For those trains where half-to-two-thirds of the sleeper premium is diner costs, would it make sense to only run sleepers and diners half the time (perhaps along with schedule adjustments which essentially turn the train into a pair of day corridor trains), but carrying double the sleepers? For trains where two-thirds to three-quarters of the sleeper premium is diner costs only running sleepers/diners a third of the time but with triple the sleepers, and so forth. How much of the sleeper business on LD trains is time-sensitive? How many sleeper passengers on Monday's train wouldn't be willing to change to Sunday's or Tuesday's?

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by David Benton » Fri Feb 05, 2016 10:55 pm

jp1822 wrote:Let alone where and how forensic accounting could have a field day with this whole ordeal!
Having passengers order via apps ( either on the own device, or onboard ones provided), would eliminate the need for stocktaking, forensic accounting and would give an accurate picture of what stock sells best , and hence should be stocked.
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by AgentSkelly » Sat Feb 06, 2016 4:11 am

I'm still pondering if a contractor could be setup to operate the diner; Delaware North comes to mind and as I recall, they are union too...
New Westminster to Amtrak 516, whats up with the extra 4 axles, over?

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by Amtrak7 » Sat Feb 06, 2016 8:47 am

Arlington wrote:
AgentSkelly wrote: If one choice choice is keeping both a Cafe and a Diner open and trying to generally sell more $ worth of food, surely another surer-bet is removing the diner entirely and trying to make the Cafe busier and higher-ticket. An upgraded, busier Cafe seems the surer bet because it starts with all the right elements of a "scalable" business model: lower labor costs (lower staff, less labor in each item), and standardized items.
I wonder if the Star cafe, with the increased business but also overnight space needed for the LSA, is profitable. Amtrak did mention in Trains magazine that the margin for the NEC/Star fresh items is lower, and perhaps more importantly, only has a shelf life long enough for the round trip to Miami, which means that a) I hope they're not too understocking them and b) they can't really be brought to all LD trains.

SouthernRailway
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by SouthernRailway » Sun Feb 07, 2016 2:53 pm

David Benton wrote:
jp1822 wrote:Let alone where and how forensic accounting could have a field day with this whole ordeal!
Having passengers order via apps ( either on the own device, or onboard ones provided), would eliminate the need for stocktaking, forensic accounting and would give an accurate picture of what stock sells best , and hence should be stocked.
That's a great suggestion. Perhaps there could be touchscreens in the food service cars and throughout the train, advertising the menus and allowing ordering. Plenty of fast-food places have those, such as Au Bon Pain, Panera and even McDonald's now.

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by mtuandrew » Sun Feb 07, 2016 3:07 pm

SouthernRailway wrote:That's a great suggestion. Perhaps there could be touchscreens in the food service cars and throughout the train, advertising the menus and allowing ordering. Plenty of fast-food places have those, such as Au Bon Pain, Panera and even McDonald's now.
Yep, as do Sheetz and Wawa (east coast convenience mart/delis, for those unaware.) It's a good idea, especially if Amtrak is serious about testing whether the rumors of stock abuse are true (as mentioned by jp1822.) Also a good idea if Amtrak decides to roll out at-seat ordering, payment, and delivery via cart.

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by Arborwayfan » Sun Feb 07, 2016 5:10 pm

This talk of electronic ordering has me thinking of another possible way to feed pax: have contracts with take-out restaurants along the way. Have no dining car, but have a couple dining employees whose job would be to order food a suitable distance from the relevant stations, pick up the food from the restaurant delivery person on the platform, and distribute it to pax at their seats or in a table-seating area of the lounge. A fairly small premium on the price of the food should cover the cost of the software and employees, and pax could have a much greater variety of possibly better food. I've heard of people doing this with the informal help or advice of crews on the Empire Builder. The main problems I can see are thinly populated areas with few stops or restaurants and trains that might be 2 or 3 hours late, leaving pax and restaurants with unacceptable unpredictability. Those two problems might mean this would not work on any of the western routes because some meals (WB breakfast on the CZ is basically all before Grand Junction even if they're on time, meaning that the lovely restaurant right in the station at Grand Jct would not be a good candidate for take out breakfast, for example). But on a corridor with multiple trains (so that someone would always be near some restaurant at the right time) and lots of towns and available restaurants, why not give pax easy access to a choice of local and chain restaurants that are already set up to sell takeout online and deliver it. I guess it could also be a bit dicey to get the food to the station on time; there would have to be a firm cut-off for ordering for each station, and the restaurants would have to figure out when to leave to deliver on time. But it might be worth a pilot program.

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BandA
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by BandA » Sun Feb 07, 2016 6:26 pm

Electronic ordering - using the redirect of the home screen of the wifi login page (if they use that technology, if/when wireless is provided) to present the ordering page on your wireless device!

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by mtuandrew » Sun Feb 07, 2016 7:14 pm

Arborwayfan: This seems like a good concept for Empire Service in particular - no Cafe car, frequent and reasonably on-time service, and a heavily populated area with lots of restaurants. Amtrak and/or NYS ought to be able to partner with a series of restaurants along the route for at-train delivery, or at-seat delivery if they can work out the appropriate logistics (allowing a delivery person to deliver to customers at their seats, then picking her or him up at the next station.)

BandA: excellent idea! It wouldn't even be dependent on an internet connection, just local trainwide wifi access. Customers could always order in person too.

SouthernRailway
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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by SouthernRailway » Sun Feb 07, 2016 8:09 pm

Didn't some passenger trains in the '60s get rid of on-board food service and just pick up food at stations? I recall Southern Railway doing that (I think) for some locals.

Trains magazine has an article about food service this month, and it mentions having fancy ovens for on-board re-heating of food that was prepared and catered (like airlines do). Wouldn't that suffice (using pre-prepared foods that are just re-heated, and offering a full menu but just not preparing food from scratch on board), rather than having to coordinate quick pickups of a lot of food at brief station stops?

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by SwingMan » Sun Feb 07, 2016 10:32 pm

If they can do it on the Acela, they can do it with a full kitchen.

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Re: Diner Economics (Split from Viewliner 8400 thread)

Post by Arborwayfan » Mon Feb 08, 2016 9:28 am

Southern Railway: I remember reading that the Monon replaced food service with a slightly longer stop at a suitable station with a sandwich cart on the platform. (Of course before dining cars meal stops were common, but somehow I don't think that would go over well these days.) The only new part of my suggestion was using electronic ordering.
It would still be complicated. And it's certainly possible to make good reheatable food, even without the help of the illusion of fresh-cooked that comes with food served on a plate rather than in a container-tray.

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