The Restaurant Report

Raju Malhotra, Chief Product and Technology Officer at PAR Technology, discusses Gen Z brand loyalty and the importance of user experience (UX) and digital gamification. Gen Z values easy-to-use and visually appealing websites and apps. If a brand's digital experience is lacking, Gen Z consumers are likely to switch brands. Brands can build loyalty with Gen Z by incorporating UX and digital gamification elements like quizzes, contests, and rewards programs.

The restaurant industry has been at the forefront of innovation in today's fast-paced world. From digital menus to contactless payments, the industry has continually adapted to meet the changing demands of consumers. However, there is a challenge that the industry is currently facing, one that is directly impacting consumer sentiment: the struggle to keep pace with evolving expectations, particularly in areas like drive-thru service accuracy and staff engagement.Consumer Expectations vs. Reality:Consumer sentiment is a crucial aspect of any business, and the restaurant industry is no exception. Consumers now expect convenience, speed, and accuracy in their dining experiences, whether they're dining in or opting for the drive-thru. However, recent trends indicate that the industry is grappling with meeting these expectations, which has led to a decline in consumer sentiment.Drive-Thru Woes:Drive-thru service has long been a staple of the fast-food industry. It's all about convenience and efficiency. However, in recent times, drive-thru accuracy has become a significant pain point for consumers. Orders are often incorrect, leading to frustration and dissatisfaction. This is where technology and data analytics can play a pivotal role.By analyzing historical data on drive-thru orders, restaurants can identify patterns and areas where errors are most likely to occur. With the help of AI and robotics, some chains are even experimenting with automated order-taking systems to minimize human error. Predictive algorithms can ensure that orders are accurate, ultimately improving consumer sentiment.Staff Engagement:Another critical aspect of the restaurant experience is staff engagement. Friendly, attentive staff can elevate the dining experience, but a lack of engagement can have the opposite effect. Technology and AI-powered tools can aid in staff training and engagement.By collecting data on staff interactions and customer feedback, restaurants can identify areas lacking staff engagement. Predictive analysis can help select suitable candidates during the hiring process, ensuring they have the necessary skills and personality traits to provide excellent customer service.Taco Bell Sets the Speed Record: Taco Bell emerged as the frontrunner in sheer speed, boasting an impressive total average time of just 278 seconds at their drive-thrus. This remarkable feat demonstrates their commitment to delivering a quick and efficient dining experience for their customers.Consumer Sentiment is taking a bit of a dip for Taco Bell, contributing to a lower sentiment score from last year at 75.28, falling a dramatic 5 points to 70.22. Three critical areas noted in the Restaurant Power Index Ratings were accuracy and food quality, with speed coming in third in the lowest sentiment category.Source Restaurant Power IndexChick-fil-A's Unique Approach: Chick-fil-A, on the other hand, took a somewhat unconventional approach to measuring speed. While their average total time stood at 436 seconds, they managed to outpace the competition when considering the number of cars in the drive-thru. This adjustment lowered Chick-fil-A's speed to 127.89 seconds, faster than even Taco Bell's adjusted average of 290 seconds. Chick-fil-A's ability to maintain a brisk pace, even during peak hours, is a testament to its operational excellence.Chick-fil-a has put in one of the highest Consumer Sentiment scores ramping up from a 78.96 in October 2022 to a blistering 84.09 in 2023 - this brand continues to out perform almost every QSR in the market with consumer sentiment which is showing heavily in the overall average unit sales. Source Restaurant Power IndexSource: the Restaurant Social IndexIndustry-Wide Improvements: What's also noteworthy is the overall improvement seen in the QSR industry from 2022 to 2023. The average time spent at drive-thrus across all brands decreased from 373 seconds to 343 seconds. This positive trend was primarily driven by fewer cars in the drive-thru lanes. QSR brands are actively working to enhance the speed of service, acknowledging the importance of swift and efficient customer experiences.As the restaurant industry continues to adapt to changing consumer expectations, these findings underscore the significance of the drive-thru as a pivotal touchpoint. Whether it's Taco Bell's rapid service or Chick-fil-A's unique approach, these QSR giants are setting the bar high and driving the industry toward a faster, more efficient future. The race for the quickest drive-thru is far from over, and customers are the ultimate beneficiaries of this healthy competition.

Consumer spending is the driving force of the US economy, accounting for about 70% of GDP. So when consumers start to cut back on spending, it's a big red flag for the economy.That's why economists worry about a potential fall consumer spending drop. There are several factors that could contribute to this, including:High inflation: Inflation has been at a 40-year high in recent months, and it's eating into consumers' disposable incomes. This makes it harder for people to afford to buy the things they need and want.Rising interest rates: The Federal Reserve is raising interest rates to combat inflation. This is making it more expensive to borrow money, which could lead to a slowdown in consumer spending.Student loan payments: Student loan payments are scheduled to resume in October after being paused for nearly two years. This could put a strain on household budgets and lead to a decrease in consumer spending.Economic uncertainty: The global economy is facing several challenges, including the war in Ukraine and supply chain disruptions. This uncertainty could lead consumers to be more cautious about their spending.Current credit pressureCredit pressure is the difficulty that borrowers have in repaying their debts. It can be caused by several factors, including rising interest rates, job losses, and unexpected expenses. This could have the most significant impact on restaurant spending.Recent Savor.FM Data Trends42% of 18-34 Plan to reduce restaurant spending this Holiday season38% of Families are looking to reduce their restaurant visits this seasonCredit pressure is currently on the rise in the US. This is partly due to the factors mentioned above, such as high inflation and rising interest rates. It is also driven by the fact that consumers have accumulated more debt than ever.Inflation pressureInflation pressure is the upward pressure on prices caused by an increase in the demand for goods and services. Supply chain disruptions and other factors can also cause it.Inflation pressure is currently at a 40-year high in the US. This makes it more expensive for consumers to buy the things they need and want. It is also putting a strain on businesses, making it more difficult for them to operate.What to doIf you are concerned about a potential consumer spending drop in the fall, there are a few things you can do to prepare:Create budget-friendly menu products.Focus on ways to assist the consumer in saving money in your marketing.Enhance loyalty programs so there is more value when they do spend.

In this podcast, we visit with the Lettuce Entertain You Leadership team to discus success and the formula for the future.FeaturingEthan Samson, Executive Partner - Vice President & Deputy General CounselAmarit Dulyapaibul, Managing PartnerKevin Brown, CEOLettuce Entertain You Enterprises (LEYE) is a family-owned restaurant group founded in 1971 by R.J. Melman. The company has become one of the largest restaurant groups in the United States, with more than 120 restaurants and 60 brands nationwide. LEYE is known for its innovative and diverse portfolio of restaurants, which ranges from casual to fine dining.In recent years, LEYE has experienced massive growth in the fine dining category. The company has launched new refined dining concepts, including RPM Italian, RPM Steak, and Sushi-san. LEYE has also expanded its existing fine dining brands, such as Gibsons Steakhouse and Mon Ami Gabi.Several factors have contributed to LEYE's success in the fine dining category. First, the company has a strong track record of developing innovative and successful restaurant concepts. LEYE's refined dining concepts are known for their modern cuisine, stylish décor, and vibrant atmosphere.Second, LEYE carefully selects the locations for its restaurants. The company's fine dining restaurants are typically located in high-traffic areas with a high concentration of affluent consumers. For example, RPM Italian is located in the Forum Shops at Caesars Palace in Las Vegas, while Gibsons Steakhouse is located in the Gold Coast neighborhood of Chicago.Third, LEYE invests heavily in branding. The company's fine dining brands are well-known and respected by consumers. LEYE also uses its branding to create a sense of exclusivity and luxury around its restaurants. For example, RPM Italian has a private dining room that can be reserved for special occasions.LEYE has created a successful fine dining empire by leveraging its concepts, location, and branding. The company's fine dining restaurants offer consumers a unique and upscale dining experience. LEYE can also attract affluent consumers by locating its restaurants in high-traffic areas and investing in its branding.Here are some specific examples of how LEYE has leveraged concepts, location, and branding to create the next empire in food service:Concepts: LEYE's refined dining concepts are designed to appeal to a wide range of consumers. For example, RPM Italian offers a modern take on classic Italian cuisine, while Sushi-san offers a traditional omakase experience. LEYE also has several refined dining concepts focused on specific cuisines, such as seafood (RPM Seafood) and steak (RPM Steak).Location: LEYE carefully selects the locations for its restaurants. The company's fine dining restaurants are typically located in high-traffic areas with a high concentration of affluent consumers. For example, RPM Italian is located in the Forum Shops at Caesars Palace in Las Vegas, while Gibsons Steakhouse is located in the Gold Coast neighborhood of Chicago.Branding: LEYE invests heavily in branding. The company's fine dining brands are well-known and respected by consumers. LEYE also uses its branding to create a sense of exclusivity and luxury around its restaurants. For example, RPM Italian has a private dining room that can be reserved for special occasions.LEYE's success in the fine dining category is a testament to the company's ability to develop and execute a winning strategy. By leveraging its concepts, location, and branding, LEYE has created a restaurant group well-positioned for continued growth in the years to come.

Stefanie Miller, President at Kellogg Company, discusses the evolving food away from home industry. Key topics include the rise of snacking and healthier food selections. This includes improved snack options at convenience stores, snack offerings in military dining, and snack-focused choices in college cafeterias. The podcast also explores the impact of changing consumer tastes, dietary guidelines, and regulations on menus.

In this episode, we dive into research and trends from TJ Wommack, Partner at AlixPartners. We discuss the composition of management teams is undergoing a significant transformation. This shift is changing the face of leadership and influencing business strategies, particularly in the restaurant industry. This article delves into the demographic shifts in management teams and their profound impact on promoting diversity and inclusion. We will also present data that reveals a notable trend: 36% of restaurant operations are led by individuals under the age of 40, while almost 70% of emerging brands are helmed by younger leadership.The Changing Face of Restaurant LeadershipTraditionally, the restaurant industry has been characterized by older, more established leaders. However, the past few years have seen a dynamic shift in the age demographics of restaurant management. A substantial number of younger professionals are taking the reins, bringing fresh perspectives and innovative ideas to the table.Age Distribution of Restaurant Management TeamsPercentage of Management TeamsUnder 40 | 36%40-55 | 44%Over 55 | 20%This data, nearly 36% of restaurant management teams are now led by individuals under the age of 40, signifying a significant generational shift in leadership.The Rise of Emerging Brands and Younger LeadershipOne striking trend in the restaurant industry is the surge of emerging brands that are capturing market share at an astonishing pace. These brands are often characterized by their innovative approaches to foodservice, ambiance, and customer engagement. What's particularly interesting is the composition of their leadership teams.Age of Leadership in Emerging Restaurant BrandsPercentage of Leadership TeamsUnder 40 | 68%40-55 | 29%Over 55 | 3%This data reveals that a staggering 68% of emerging restaurant brands are led by individuals under 40. This age group's dominance in emerging brands suggests that younger leaders are at the forefront of driving innovation and change in the restaurant industry.The Impact on Diversity and InclusionThe influx of younger leaders in the restaurant sector has several implications, one of the most prominent being a renewed focus on diversity and inclusion. Younger generations tend to have a stronger commitment to creating diverse and inclusive workplaces, reflecting a broader societal shift towards inclusivity.Younger leaders are more likely to:Embrace Diversity: They understand the value of diverse perspectives and are more inclined to hire a diverse workforce.Implement Inclusive Practices: They tend to create a more inclusive culture within their organizations, fostering an environment where every voice is heard.Adapt to Changing Consumer Preferences: Younger leaders are more attuned to the evolving preferences of a diverse customer base, leading to better business strategies.Predictions for the FutureBased on historical analysis and the current trends observed in the restaurant industry, we can make some predictions about the future:Increased Diversity: As younger leaders continue to rise, we can expect an increase in diversity at all levels of the restaurant industry.Innovative Business Models: Emerging brands led by younger individuals will likely continue to disrupt the market with innovative business models and unique dining experiences.Greater Emphasis on Inclusion: Inclusion will become a focal point for businesses, not just in the restaurant industry but across sectors, as younger leaders prioritize inclusivity in their organizations.ConclusionThe demographic shifts in restaurant management teams, with a significant proportion of younger leaders at the helm, are reshaping the industry. This transformation is driving a more diverse and inclusive restaurant landscape, fostering innovation, and better aligning businesses with changing consumer expectations. As we move forward, it's clear that the restaurant industry will continue to be a vibrant and dynamic sector led by a new generation of leaders committed to positive change.

First up, we'll be exploring the incredible journey of Big Chicken, a fast casual giant that's redefining the way we think about chicken. Stay tuned as we sit down with their visionary CEO, Josh Halpern, to uncover the secret recipe behind their remarkable growth and exciting future plans.Also, in the episode, we'll take you on a savory journey with Dog Haus, the pioneers of gourmet hot dogs and sausages. Join us as we chat with their innovative team about how they've met and exceeded the ever-evolving demands of the next-gen food consumers.The meteoric growth of the Big Chicken brand has been nothing short of extraordinary in the ever-evolving landscape of fast-food chains. Recently, their journey reached a significant milestone with the appointment of Josh Halpern as CEO. This strategic move has injected fresh leadership and vision into the company, propelling it to new heights. Under Halpern's guidance, Big Chicken has embarked on a mission to satisfy taste buds and cater to the next generation of consumers' ever-changing food demands.In a parallel culinary universe, the Dog Haus brand has been making its own waves. Their innovative approach to gourmet hot dogs and sausages has struck a chord with the discerning palates of modern consumers. Dog Haus has brilliantly tapped into the rising demand for elevated, customizable, and socially conscious food options. By understanding the evolving preferences of the next-gen consumer, they've expanded their menu to include plant-based alternatives and unique flavor combinations that resonate with a health-conscious and environmentally-aware audience. As the food industry continues to evolve, Big Chicken and Dog Haus are inspiring examples of how adaptability, innovation, and a commitment to delivering on next-gen food expectations can fuel remarkable growth and success.

The fast-casual restaurant industry is booming, and two brands that are leading the charge are Velvet Taco and Starbird. Both brands have seen rapid growth in recent years, thanks to their unique offerings and savvy leadership.Velvet TacoVelvet Taco was founded in Dallas in 2011 by Randy DeWitt and his son, Travis. The concept is a fast-casual taco restaurant with a twist: the tacos are made with high-quality ingredients and feature creative flavor combinations. The menu features over 20 different tacos and a variety of other dishes, such as salads, bowls, and sides.Velvet Taco has quickly become a popular destination for millennials, thanks to its hip atmosphere and social media-friendly food. The brand has also been praised for its commitment to sustainability, using recycled materials and sustainable packaging whenever possible.Clay Dover has taken the lead as the CEO and ushered in a variety of new menua approaches as well as bringing in an expanded view on service models by adding Drive-Thru in the fresh mex segment. In 2021, Velvet Taco was acquired by Leonard Green & Partners, a private equity firm that has invested in other successful brands, such as The Container Store and Zaxby's. The acquisition is expected to help Velvet Taco accelerate its growth plans.StarbirdStarbird is a fast-casual chicken restaurant founded in 2016 by Aaron Novashen. The concept is a modern take on the classic fried chicken joint, focusing on high-quality ingredients and creative flavors. The menu features fried chicken sandwiches, tenders, baskets, and various sides, such as mac and cheese and coleslaw.Starbird has also quickly become a popular destination for millennials, thanks to its affordable prices and convenient locations. The brand has also been praised for its commitment to using antibiotic-free chicken and cage-free eggs.In 2021, Starbird secured a $12 million investment that spurred recent growth to open more restaurants, as well as launching franchising. The funding round was led by private-equity firm KarpReilly. The investment also was added to the recent investment of a 4 Million cash infusion led by industry veteran Greg Dollarhyde.What Makes These Brands So Successful?There are a few things that make Velvet Taco and Starbird so successful. First, both brands offer unique and crave-able food that appeals to millennials. Second, both brands have a strong focus on sustainability and menu creativity. Third, both brands have savvy leadership that is committed to growth.The Future of Fast-CasualThe fast-casual restaurant industry is expected to grow in the coming years. Brands like Velvet Taco and Starbird are leading the way by offering unique and craveable food and a commitment to sustainability and social responsibility. These brands are well-positioned to succeed in the years to come.Here are some other factors that have contributed to the success of Velvet Taco and Starbird:Their focus is on innovation. Both brands are constantly innovating their menus and offerings, which keeps customers returning for more.Their strong marketing and branding. Both brands have done a great job of marketing themselves to millennials, using social media and other channels to reach their target audience.Their commitment to customer service. Both brands are known for their excellent customer service, which makes customers want to return.Overall, Velvet Taco and Starbird are two fast-casual brands on the rise. They are both well-positioned to succeed in the coming years thanks to their unique offerings, savvy leadership, and commitment to innovation.

The podcast discusses the rising popularity of restaurant takeout compared to third-party delivery services. It explores the challenges and benefits of off-premises channels, such as pickup, delivery, and catering options. The impact of the pandemic on the restaurant industry and the shift towards online ordering are also explored. Additionally, the podcast discusses the potential impact of a recession on the industry and strategies for adapting to changing consumer habits. The importance of creativity in the restaurant industry is highlighted as well.

White Castle is partnering with SoundHound to roll out voice AI at select drive-thrus. The technology will be added to over 100 White Castle drive-thrus by the end of 2024. Many of these drive-thru lanes will operate 24/7.White Castle initially tested drive-thru AI in 2020 through a partnership with Mastercard. SoundHound provided voice recognition for the trial, while Rekor Systems offered vehicle recognition. This trial served as an “incubation phase” for the companies, and SoundHound now works directly with White Castle.The voice AI technology will allow customers to place their orders through a voice interface. This will free employees to focus on other tasks, such as food preparation and customer service. The technology is also expected to improve the accuracy of orders and reduce wait times.Additional Information:White Castle initially tested drive-thru AI in 2020 through a partnership with Mastercard.The voice AI technology is expected to be added to over 100 White Castle drive-thrus by the end of 2024.Many of these drive-thru lanes will operate 24/7.Computer vision has the potential to significantly improve restaurant drive-thru operations by providing real-time data and alerts to staff.Here are three examples of how computer vision could be used to improve restaurant drive-thru operations:License plate recognitionVehicle detectionOrder Accuracy