Tag: restaurant marketing

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Marketing Restaurants Trends

5 Restaurant Tips to Reduce the Effects of Inflation

Restaurants that have survived the pandemic are now threatened by recent inflation. People are quickly feeling the price increases among everyday items affect their decisions. 

Now restaurant owners are faced with the effect inflation has on the industry. Inflation can cause an increase in costs in all aspects of the restaurant industry. That includes rent, food, labor, utilities, and insurance. 

According to the Bureau of Labor Statistics, wholesale food costs were 17% higher in March than last year. Along with a rise in hourly earnings for employees than the prior year. 

Establishments deal with rising costs of goods while seeing fewer customers walk through the door. Some people are eating out less and finding it more affordable to cook at home. Cutting back is the first thing people begin to do when prices rise. Diners are more hesitant to dine out because their everyday expenses rapidly increase. With interest rates rising, people find it more challenging to borrow money or lines of credit as well. 

Here are 5 tips to help you fight inflation, save money and keep customers in the door. 

1. Find Ingredient substitutions 

Restaurant owners can agree that food costs are one of the biggest challenges, especially when it comes to inflation. Taking a closer look at your inventory costs can be beneficial by revisiting your cost analysis. Is there any ingredient that you use a lot of that’s seriously cutting into your budget? Or maybe a hot-selling dish brings significant revenue but includes pricey ingredients which impact your profit. 

By exploring ways you can swap ingredients for something less pricey, you will begin to see savings. 

2. Audit your menu 

To do a proper menu audit, take all the factors into account in your menu and the profits you make on each dish. Sort the menu items out from the most highly profitable to the least. When you’re finished, evaluate what you can cut off your menu and save for something more critical, or put the money elsewhere into another dish. 

To do this properly, you’ll have to take a good look at your menu and know the profit you make on each dish. Segment your items into four groups and make adjustments based on their performance. Take into account which dishes really work and which one’s dont. 

3. Consider Price Changes

Increasing your prices may actually prove to be more beneficial to your establishment. Consider adding ingredients to make the cost more valuable, or try including a premium side to bundle and spend more. 

4. Reduce food waste 

If you’re not on top of monitoring your inventory, you may risk a big part of your budget by not accounting for food costs. Don’t just count inventory; dig into your numbers and understand where exactly you are losing money due to waste and over portion sizes. If you notice that guests are finishing their plates, you may need to look into smaller portion sizes. Optimize your recipes and use the most out of all your ingredients. 

5. Try to Reduce Food Costs 

Profitable restaurants usually incur 27%-36% of their revenue on direct food costs. In the current inflationary environment, keeping a close track of our direct food costs is more important than before. Accurate and consistent ordering from reliable vendors should also help. Do not hesitate to ask for price break volumes and freeze food if it makes sense. We occasionally see local merchants and wholesale clubs like Restaurant Depot, Costco and Sam’s Club offering limited-time deals on quality food products. A lot of small independent restaurants we have talked to do not hesitate to buy through such retailers, especially the products which they have tried before.

ABOUT CHOWEASY

ChowEasy is a free app that helps restaurants attract new, quality customers from their local area. Restaurants attract passionate foodies with easy-to-setup promos. No upfront costs or commitments!

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Restaurants Uncategorized

Restaurant Soft Opening: Do It the Right Way

When opening the doors to your new restaurant, it’s important to explore all the ways you can build new customers and get them excited about your place. You want to get and get fresh faces in the door to explore your menu. 

That’s why hosting a soft opening could be an excellent option for your restaurant. Having a limited invite list will allow a smaller event to try menu items and drinks to see how the first experience will go, kind of like a showcase test run. 

While still facing COVID-19, restaurants around the country are preparing to reopen and applying a soft opening approach to control capacity and health safety concerns. This way, your customers feel more comfortable dining inside. 

A grand opening occurs on the actual day your restaurant opens to the public. Still, the soft opening will be the beta test before the official start. This is beneficial for you and your staff to ensure they have everything they need to be successful. Allowing guests to tell their friends and social media followers about their look inside your new restaurant before opening will get people excited for when you open.

Here are the steps to have a soft opening and do it the right way. 

Decide on the Menu 

The soft opening might be more obtainable if you consider offering select menu items to try. There’s less preparation to worry about when bringing items to the tables on a busy opening. There are a few factors to consider when creating your menu. Spotlighting dishes from the menu showcases the dishes you think are perfectly ready for review. Releasing a beta-style menu is a great way to improve some kinks you may want to work on. Displaying only a few items on the menu also lets your customers know more and return later to see updated additions to the full menu. You can host more than one soft opening event to feature different menu items you want to test. 

If you don’t, go the select menu route, and your grand opening is sooner than later. Having the full menu option gives you the ability to get feedback on all of your dishes before opening your doors completely.

Serving your entire menu at a soft opening will give you excellent feedback, there are some disadvantages. You need to be fully prepared to host a full menu soft opening, meaning all aspects of your restaurant’s menu must be ready.

Create the invitation 

The invitations you create for your soft opening should invite the guests to come and test how your restaurant runs. Depending on how extensive an invite list is, you can keep it casual or do something upscale. Choose something memorable and creative that will grab your guests’ attention. However you send the invite, make sure to include the date, time, address, menu pricing, RSVP date, and dress code if there is one. 

Be sure to also consider timing and capacity. Seeing how many people you can handle is different depending on the capacity and staff. Get used to a natural flow, and break up your guests into other time spots. 

Build the guest list 

Inviting guests can have a substantial impact on your restaurant’s success. Inviting familiar faces and family and friends makes them much more forgiving for anything that may go wrong during your soft opening. Those people can give you constructive criticism and offer insight during your test run. Just remind your friends and family to be honest. 

You can also build your guest list by contacting local business owners. Introducing yourself to local businesses can be a great way to introduce yourself to the community and build long-lasting relationships. Introducing your restaurant locally is a solid first impression for other business owners in the area. Building professional relationships with other community businesses is vital to your restaurant’s success. 

Adding community leaders and influencers to the guest list could benefit your soft opening. Prominent local leaders and community influencers will give you lots of pull within the community and generate a positive word-of-mouth promotion for your restaurant. Positive reviews will be critical early on to build your restaurant’s reputation. Be prepared to impress these leaders and influencers so they can give you those positive reviews. 

Feedback is essential 

By gathering feedback from your soft opening guests, you can make the improvements that are needed for your opening to the public. Gather your feedback in writing and ask guests to fill out a questionnaire at the end of their dining experience. Drop a feedback card with your guests check that way. You know everyone got the chance to fill one out. 

By fulfilling these steps, your soft opening is guaranteed to succeed. 

  • Prepare a menu you think will fit perfectly with your soft opening wants and needs. 
  • Evaluate how your seating arrangements and flow worked
  • See how your staff handled their knowledge of the menu and how they work together. 
  • Get the word out by having the local community there. 
  • Implement feedback and tweak anything that may need improvements. 

There are so many benefits to doing a soft opening, and it can give you the confidence boost your restaurant needs. Trust us; you’re going to want to take these steps and do it the right way. By doing so, you will have an advantage that will set you up for success first thing. You can attract new customers for your grand opening by downloading the ChowEasy App. Use it as another tool for your soft opening and grand opening launch to connect with local customers and restaurants. 

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Marketing Restaurants Trends

5 Of The Best Apps for Restaurant Owners

As technology is growing every day, sometimes it feels like you can’t keep up with the latest app trends for your business. It seems like there’s always a new app trending, and you find yourself always asking the question, “Is there an app for that?”  Business App development has been booming so there are a lot of options out there available for restaurant owners and diners.

This can make it hard to narrow which App fits best for your needs.

So, which apps are really the best for restaurant owners? Here are the apps that we believe you can best benefit from and utilize to influence and grow your business.

Here are 5 of the best apps to generate more business and make your life as a restaurant owner a little easier.

1. ChowEasy

Want to attract the perfect customer? ChowEasy is an easy and efficient way to grow business by offering a marketing tool that provides promotions for diners looking for your type of restaurant cuisine. Unlike other sites, ChowEasy allows you to directly set up promos on your terms and conditions. This marketing tool allows your business to grow by offering promotions that define your brand. Allowing diners to bid for the food and type of restaurant can match diners with bids that fit them and what they are looking for. Diners save money, and restaurants attract and retain new customers. It’s a win-win for both parties.

2.  Hootsuite

It’s crucial in today’s age to have an active social media presence. Platforms like Facebook and Instagram can gain you exposure and customers that may not know about your restaurant. So being there is a must for any restaurant but keeping up can be a difficult and daunting task.

Apps like Hootsuite allow you to manage posting and engagement, along with being fully involved in your community. Managing all your social media accounts on one easy-to-use platform, and allows you to schedule posts months in advance. Available for Apple and Android products, you can create the online presence you want for your restaurant with help from the App’s tools.

3. Partender

Selling alcohol generates revenue for restaurants because the markup is high and it’s easy to upsell it to your customers. The average revenue that comes with selling alcohol is anywhere from 20 to 25 percent of a restaurant’s income, sometimes even higher.

This App is a life save for restaurant owners serving alcohol and all you need is an iPhone. Partender helps owners manage and track liquor inventory in their bar by measuring their liquor and sales data. Creating this type of data lets you know what is being sold and calculate how much your bartenders are pouring correctly. It’s really an easy, must-have that is worth the monthly investment.

4.  Yelp

Social proof can make or break a restaurant. Managing that is an important part of marketing your restaurant.

Many diners wouldn’t even consider a restaurant until they have checked the reviews on Yelp. That’s because sites like Yelp are powerful and more influential than any other for the restaurant business. Yelp allows you to build customer loyalty and gain new customers with loyal customer reviews. This FREE tool has 132 million monthly visitors; that’s why managing a Yelp account is essential for your restaurant to grow.

5.  Feedly

Stay in the know! There’s so much going on every second, and there’s information being shared that can sometimes feel overwhelming. Don’t be left out on all the latest and greatest industry trends. Now you can stay up to date with Feedly.

Feedly is a power news aggregator, compiling information from sources all over the internet. Choose publications, blogs, and set up keyword alerts for content related to your restaurant. This App is full of helpful information, super user-friendly, and easy to read because of its minimal layout design.

What apps will your restaurant use?

Maybe you’re already using some of these.

When you stumble onto a new app, research it, find its value and determine if you can implement its use in your day-to-day restaurant business. When implementing any new tool for your restaurant, determine your end goal then find the best app to help you accomplish that goal.

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Marketing

How Restaurant Influencers Can Boost Your Business

Working with influencers can be so beneficial to your restaurant’s marketing strategy. Thanks to the massive impact of social media, restaurants can increase awareness and grow their business through a large audience, driving more traffic to their doors. There’s no doubt that the influencing market is booming right now. The industry grew from a $1.7 billion market in 2016 to $9.7 billion in 2020. For every dollar a business spends on influencers, they earn $5.20. 

That being said, it may be frightening to look at all the options and how you can utilize influencers to spread your restaurant’s messaging. Here are some common questions about food influencers, answered.

What are Food Influencers, and what do they do? 

Food influencers have a wide range of social media followers that can help you boost your restaurant’s customer base. Influencers are often celebrities and bloggers who have gained popularity through photos, videos, and personal engagements. They can promote any of your products by sharing it with their followers and what they like about your brand. More specifically, food influencers are constantly increasing and trending throughout social media websites. The idea of food culture is a scene in the media, and people love looking and browsing through food options and food tags. 

What are the benefits of working with a foodie influencer?

The benefits of working with food influencers are overwhelming. Over 70% of consumers say they are more likely to purchase a product based on a social media referral. Referrals are more effective when they come from another person rather than the actual company. That’s why the results of working with influencers have become a valuable tool for customers’ dining decisions. 

The benefits of endorsements through influencers outweigh the drawbacks. The influencers have worked to build a trusting relationship with their followers. Brands want to make sure they are exposing the content that best fits them. 

Is it worth it? Why should I consider an influencer?

Influencers make powerful partners because of their existing relationship with the audience. Influencers have advantages that are hard for brands to replicate, such as their large community of followers, personal connections, consumer trust, and social network expertise. Social influencers effectively start, share, and spread online conversations, which is incredibly valuable to brands.

Food and beverage brands often have more success with influencers than other business types. The reason for that is because food is the most popular subject that trends on social media like Instagram and TikTok. Not every consumer participates in certain activities like fashion or fitness, but everyone in the world eats food. Eating is often culturally connected to occasions like celebrating and sharing, and that’s why everyone from different parts of the world can come together on relating to food. Not only is food relatable, but visually appealing. Visual content like food and cooking is appealing to viewers and generates 94% more engagement online than text alone. Food and recipe influences are a source of marketing that is growing rapidly every day. 

How do I find the best influencer type for my restaurant? 

You want to choose the best type of influencer for your restaurant, and they are things to consider. Ask yourself the following questions;

  • Do they meet your restaurant’s ethics and values?
  • Is their engagement at Influencer Level?
  • What is your influencer budget? 

Established Food & Drink Influencers

To be considered an established influencer, there should be 10,000 + followers. Established influencers work really well within the restaurant industry.

Micro-Influencers in the Food & Drink Industry

Micro-influencers range from 1000 to 10,000 followers. Don’t let the name fool you, micro influences can have a high engagement rate with followers. The bonus of working with micro-influencers is they tend not to be as price-oriented as experienced ones because they are still trying to grow their brand. 

How much do influencers charge?  

It’s pretty simple when it comes to understanding the cost of influencer marketing. Basically, the more followers those influencers have, the higher their cost to post about your restaurant. Prices rise somewhat proportionately until they reach a point of being a celebrity influencer (with over 500k followers). 

Prices rise relatively proportional until reaching the point of celebrity influencers (with over 500k followers). In terms of formats, you’ll pay a large sum for a video – around 50% more than you would for a post. Stories are the cheapest, presumably due to their brief nature. 

Influencer Rates* Worldwide, by Influencer Tier, March 2019

Type of content / Influencer TierNano (500-5k followers)Micro (5k-30k followers)Power (30k-500k)Celebrity (500k+ followers)
Post$100$172$507$2,085
Video$114$219$775$3,138
Story$43$73$210$721

By choosing the right influencer style for your restaurant you can benefit from all that influencers have to offer. This style of marketing can create a huge impact on your business if you use it the right way. What are you waiting for? Find an experienced influencer that can help you get those customers straight to your door. 

What else should Restaurants do?  

In today’s fast-paced environment, it is important to try multiple marketing avenues for different customer segments. There are some customers who get swayed by the availability of promotions. Some customers pick a restaurant based on location and reviews. Above all, it is important for Restaurants to focus on the ‘Basics’ which are good tasting, fresh food offered in a clean and comfortable ambiance with the attentive service that all Diners expect. 


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Marketing Restaurants Technology Trends

How To Use TikTok To Promote Your Restaurant

We have seen the latest social media trend TikTok everywhere, and it’s another social media marketing tool to use to promote your restaurant. This new app is a GAME CHANGER for restaurant owners, and there are so many incredible ways to let your followers know what’s going on. 

Here are some things we know about TikTok:

  • It has 100 million monthly active users in the U.S., with an 800% increase in users since 2018. 
  • It has 50 million daily users in the U.S. 
  • It has been downloaded over 2 billion times globally. 

Now, it’s time for your restaurant to tap into the new social media platform. Restaurants and other places of business have been using TikTok to grow their advertising and marketing through this outlet, specifically after the pandemic when TikTok grew rapidly. 

There are many cool features in TikTok that allow you to edit videos and share them with a wide range of people. Creators have access to effects, filters, and songs. 

Video is a great marketing tool for your brand and business, and this outlet allows even more content for you to share. TikTok provides user-friendly tools to create short videos. Every user could be a potential ambassador for your brand and spread messages and campaigns about your restaurant. 

Share Recipes and Ingredients 

Sharing recipes and making cooking videos is a great way to launch your restaurant’s TikTok page. It’s easy to make a video together to create a step-by-step way to make a recipe of your choice; these videos get TONS of likes, comments, and shares. 

Users on TikTok love food trends and it’s always something that’s trending on social networks. People love this type of content and hashtags like #food and #foodies will help give your video more views. There are currently over 116.2B views for #FOOD. 

#AtlantaFood is also a trendy hashtag considering all the great food options Atlanta is famous for. Check out Atlanta-based cook on TikTok justlex.x showcase her soul food video content that has some serious drool-worthy food clips. 

Tips and Tricks 

Try chef tips, like demonstrating and teaching fundamental skills like slicing and cutting techniques, or any other technique that can be useful when cooking. 

Here’s @cookingwithshereen on TikTok showing you how to cut grapefruit with her quick chef tips.  

Introduce Menu Items 

Your restaurant menu is continually updating and changing, and TikTok is an excellent way to showcase new or unique items. 

Chefs are Trending 

Showcasing your chef is the way to go. There are endless chef accounts; a good example is @maxthemeatguy, specializing in meats and creating video content to show off his skills. 

Collaborate with Influencers

Teaming up with social media influencers is the new way of promoting your restaurant and business social media profile. 

Reaching out to a younger audience is also a good reason to collaborate with TikTok influencers. Chipotle was the first major restaurant to launch on TikTok in 2019 and has had much success with gaining influencers to collaborate with. 

Dunkin Donuts followed the trend last October and has been promoting its new drink with influencer D’Amelio, who has more than 90 million followers on TikTok. The partnership promoted its new cold brew, which after marketing on TikTok, sales rose 20% the first day. 

Go Behind the Scenes 

Take your TikTok audience backstage and behind the scenes of restaurant operations. Giving people a look inside your team and kitchen makes it more personable and a mini-view of your restaurant’s inside. Making your customers feel they are included in something is crucial to create that relationship between owner and diners. 

Host a Live Event

It’s important to know that your TikTok account must have at least 1,000 followers to host a live event. Once you’re able to host live events, you’ll realize that it’s a great tool when marketing your brand. Having a class or a mini-lesson series is a fun way to create more content on your account, LIVE. 

Now that you have their attention they will search for the desired cuisine via ChowEasy. Make sure they can find you! Learn more about what ChowEasy can do to successfully market your restaurant.

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Dine In Diners Marketing Organic & Local Restaurants Technology Trends Uncategorized

7 Ways To Attract Millennials To Your Restaurant

Attract Millennials to your restaurant with social media, healthy options, and social responsibility
Social media, health trends, and social responsibility are among a few things that millennials value in a restaurant

According to Forbes, “millennials have over $200 billion in buying power and will make up 75% of the workforce by 2025.” This means that millennials are an important target for restaurants and learning how to reach them will be crucial. So how do you attract millennials to your restaurant? With endless dining options available at the fingertips, you need to stand out but also align with their values. Keep reading to learn 7 things you can do to keep them coming back!

Use High Quality Ingredients

Appeal to the health conscious generation by using high quality ingredients

Studies have shown that Millennials are willing to fork over more money for high quality food. Since healthy eating is a trend more than ever before, be sure to use wholesome ingredients for everything. These include organic vegetables and meats that are free of hormones/anti-biotics. It would also help to emphasize phrases like “sourced locally” and “non-GMO” in the menu.

Boost Social Media Presence

Stay engaged and present in your millennial guests’ lives through social media

Since Millenials and Gen Z are tuned into the world of social media, grab their attention there. Your internet presence speaks volumes to these generations. Promote your restaurant and menu in engaging ways like posting a question or a raffle for a free giveaway. Also leave trails in your restaurant that lead to your social media. A couple ideas include inserting hashtags or your social media handle in menus or cups. Finally, update your directory listings and ask guests for 5-star reviews on Yelp and TripAdvisor.

Prep Food For The Gram

Posting food photos on social media is still a trend and shows no signs of dying

You’ve seen it. Pictures of food being posted by the millions. Food pictures are hot content for Instagram and Facebook feeds so why not use this in your favor? First, you’ll want to make sure the presentation of your dishes are worthy of a photo. Then, take a handful of snapshots yourself and experiment with various lighting edits and filters. Don’t be afraid to spend significant time on these. The photo you select needs to be captivating enough to stop people from scrolling. And you have lots of competition.

Build a Brand and Tell a Story

Fatt Matt’s reinforces their brand through merch items and even their very own BBQ sauce

Your restaurant is a brand and should have a compelling story. Make sure your social media, theme colors, and logo all reinforce the story of your brand. Millennials love their brands and aren’t afraid to endorse them through purchased merchandise. Make T-shirts, stickers, and other merchandise to make them a part of the story. You can somewhat easily attract millennials to your restaurant but a cool story will keep them.

Host An Experience

Create an experience to keep them coming back for more

To keep millennials coming back, you have to transcend beyond just providing a great meal. You have to provide an experience. It’s been shown that millennials prefer to live for new and unique experiences. This priority extends to eating out which you can thank the wave of pop-ups, food trucks, and food festivals for. If you don’t know where to start, just put some heart and soul in the atmosphere. You can use ambiance, art displays, music and aesthetic interior design to help create an experience. Additionally, you can keep them coming back through game nights, live music, art shows, and open mic nights. When in comes down to it, you want to envelop them in an immersive world they can’t to return to.

Have A Unique Menu

Millennials like taking risks with bizarre novelty menu items like the donut burger from “Sublime Donut Burger” in Atlanta

As mentioned in the paragraph before, Millennials live for experiences. This means that novel menu items will go a long way with this generation. This generation is the most diverse and open to new cultural cuisines. With that being said, offer something fusion and even quirky. To top it off, give your dishes distinct names that’ll catch their attention. You don’t want to only offer what millions of restaurants can. For instance, offering only pizza in a market where you can get pizza anywhere. This is why many restaurant chains are closing.

Be Socially Responsible

Millennials intentionally endorse restaurants that aim to protect the environment and support social causes

Being a restaurant that demonstrates corporate responsibility will go a long way. With the accessibility of information through the internet, any news of unethical or controversial actions can be found. Studies show that millennials would rather support businesses that do good and have no hesitancy to boycott. Due to this, establishing a good online reputation and supporting a good cause would be key for longevity. To start, you can make it known that you use biodegradable wear and consistency recycle. “Millennials don’t mind spending more money on things that are good for the planet.”

Take Your Restaurant To The Next Level

Going through the list, it can seem like a demanding task to attract millennials to your restaurant. Though it takes a lot to catch the attention of this generation, your restaurant will improve in many ways. Have fun with it while you become more than just a restaurant, but a brand!

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Uncategorized

Iconic Restaurant Chains That May Close In 2020

Get To These Restaurants While You Can!

It’s the last call for several restaurant chains in 2020

When visiting another state or city have you immediately craved a particular restaurant chain for that one-of-a-kind dish like we have? You may like everything on the menu or just the complimentary bread rolls and nothing else. More than just food, some iconic restaurant chains can provide a familiar environment that is consistent across the map. The result can be a ‘home away from home’ type of comfort for some. Though these restaurant chains have multiple locations and seem like they’ll be around forever, time isn’t on their side. Millennials, Gen Z, and endless food options available at the fingertips have hit these restaurant chains hard. Continue reading to learn which major restaurant chains we may lose in 2020.

Steak ‘n Shake

When wholesome steakbugers were all the craze

Shaken up to see this prime steak burger and joint on the list? Forming from the depression era, Steak ‘n Shake lived up to it’s slogan, “Famous for Steakburgers.” The steakburgers were made up of T-bone, sirloin, and round steak parts. What attracted customers was founder Gus Belt’s campaign to prove the wholesomeness of his steakburgers. At the time, there was much skepticism regarding the purities of ground beef. To break this stigma, Gus Belt performed live meat grinding demonstrations within the vicinity, leaving no room for suspicion. This stunt was groundbreaking at the time, but Steak ‘n Shake neglected other aspects that would sustain them today. Steak ‘n Shake stated in a letter to shareholders that their outdated kitchen design was anchoring them down. High overhead costs and slow service lead to the decision to close 100 locations until a franchise partner is found.

Steak ‘n Shake newspaper campaign ensuring purity of meat

Golden Corral

The greenhouse (pictured) was adopted after allegations of under cooked meat

Only a few restaurants can even come close to Golden Corral’s range of adaptability over the past few years. Formed in Fayetteville North Carolina in 1973, this classic all-you-can-eat buffet and grill has taken many punches and rolled with them. Salad bars were expanded after news of under cooked meat and renovations were made to appear more hip. Golden Corral also implemented a takeout component a few years ago and recently integrated delivery services like Grubhub and Ubereats. If anything, Golden Corral deserves acknowledgement for proactive adaptations. Despite this, incidents including salmonella outbreaks, norovirus epidemics, and improper food storage allegations hit the franchise hard.

Pizza Hut

The spot for birthday parties and date nights…in a distant era

Can you remember when Pizza Hut was a popular hub for birthday parties, teenage hangouts, and even dates? Pizza Hut’s prime days are like a distant memory. Pizza Hut is split into several different formats such as dine-in, carry-out, and bistro. There is talk of Pizza Hut moving in the direction of becoming a takeout establishment only. Pizza Hut Express, a fast-food version of the chain with a limited menu, has kept it relevant today. These days most customers are acquired through the express version of the restaurant. It is almost exclusively found in venues, college campuses, theme parks, and food courts. They are also often conjoined with sister brands like Wingstreet, Tacobell, or KFC. Pizza Hut announced its decision to close up approximately 500 dine-in locations within 2021. Go dine-in at the Pizza Hut around your corner while you can in 2020!

Applebees

Applebee’s Campaign for $1 drinks successfully attracted millenials

Would monthly $1 drink specials convince you to make Applebees your new pregame spot? Applebees’ $1 drink specials successfully rallied enough attention from millennials and helped make an astonishing comeback in 2018. Before the drink specials, the casual dine-in almost completely disconnected from their millennial audience upon introducing pricey $20 steak dinners. Millenials were likely to eat at home or spend that kind of money at a local novelty restaurant. Applebees, like other casual dine-in restaurants, are struggling to juggle their mixed-generation audience. With over 200 restaurant closes since 2016, Applebees needs to carefully plan their next strategy. The $1 specials proved to be a success but will it be enough to carry them through 2020?

TGI Fridays

TGI Fridays is planning to go back to its roots – a trendy gastropub for singles

Fridays was yet another classic American dine-in that filled a unique demand for the time period but it isn’t aging quite nicely. Founded in Newyork in 1965, Allan Stillman wanted to create a public space to meet single women. With interior designs like brass rails, Tiffany lamps, and stained glass windows by the bar, the perfect public “cocktail party” environment was created. TGI Fridays nowadays is going through the same types of problems that all casual dining restaurants are facing. One possible solution is breaking away from the casual-dining industry altogether. TGI Fridays is doing this in 2020 by rebranding themselves as a trendy gastropub and shifting their focus to the urban market. 

2020 – The End For Many Restaurant Chains

It might be unbelievable that 2020 may be the last year for these famous American restaurant chains. Millennials, food-delivery apps, health trends, and Gen-Z brought a whole new dynamic to the industry. Options are endless for today’s consumers and unless restaurants can learn to adapt to new demands, they will fade away. 

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Restaurants Technology

The Real Truth About Food Delivery Business

For most of 90’s, Food Delivery was limited to Pizza and the local Chinese restaurants delivering their own food in small areas. Delivery was never looked at as a profit center but just another way to boost sales for individual locations.

From Mid 2000’s onwards, we started to see new businesses such as Grubhub, Doordash and Uber Eats (Specialty Delivery Companies or Apps) that were focused on delivering food prepared by others. Their general Business model was based on: a) getting discounts (which the delivery companies keep) from Restaurants whose food was being delivered and b) charging the end customer a delivery fees for the ease and convenience of getting food delivered from multiple restaurants using one simple mobile app. Restaurants did not have to hire drivers or keep a delivery fleet as these delivery companies pick up the food and deliver to customers.

There is a third segment of software companies which essentially provide software and technology to enable restaurants to accept online orders and manage delivery directly or thru one or more Delivery apps.

Thanks to all the ad spend, technology advancements and changing habits of the younger customers, Food delivery business is definitely growing in $ volume. Are restaurants getting more business on a net basis? or are they getting more delivery business at the expense of their dine-in customers? Who is making money in the delivery business? Is it a passing fad or is it here to stay? I probably can’t answer all of these questions accurately as each restaurant’s and segments situation is different but this post is an attempt to sort thru different pieces written by industry experts and summarizing the most compelling points in front of our readers.

Let’s start by looking at what the recent media posts have been saying…

If you look thru last ~ 15 years of developments in Food Delivery Industry including the recent buzz here are the key findings:

  • To start off, specialty Food delivery companies piloted in one large urban market – refined their technology and processes and then expanded to other urban markets.
  • More delivery companies came into existence and built their sweet spots either in certain metro areas or breadth and number of restaurants they signed up.
  • Most of these companies raised enough money to build their brand names and hire large marketing teams which were aggressively signing-up restaurants.
  • Demographic developments including increase in the number of tech-savvy younger customers as well as economic growth contributed to growth of food delivery segment at a faster rate than overall restaurant industry.
  • Uber Eats entered Food Delivery space with a significant advantage i.e. an existing network of drivers, end consumers as well as solid brand recognition.
  • Increased competition has contributed to aggressive tactics to sign up new restaurants including adding restaurant’s to delivery apps without contract or permission. On Diner side – free delivery, variety of coupons are very popular.
  • Delivery companies are using their brand and clout to negotiate fees as high as 30% from partner restaurants.
  • Tight Labor Market and Strength of economy along with multiple ‘gig’ options generally available to delivery crew is also making it hard and expensive for food delivery companies to hire and retain reliable people.

So, who is making money in the food delivery industry?

What is the bottom line for Restaurants?

  • Restaurants are seeing some volume growth due to these new delivery options but have to pay significant fees to delivery companies.
  • Some Delivery customers are trying new restaurants, they would not have visited otherwise but, Delivery segment is limiting the growth of Dine-In and Direct Pick Up segments.
  • End Customers have many delivery options these days, specially, in Urban areas and can also benefit from several promotions which delivery companies frequently offer.
  • Delivery companies offer technology features which are very expensive to be offered by individual restaurants directly. Examples include: Real Time Tracking, Collaborative Ordering, Ability to order from thousands of partner restaurants using the same delivery app.
  • Despite the volume growth, high commissions – delivery companies are struggling to make money.

What is the long-term suggestion for Restaurants?

Based on everything we have seen, read and heard – Food delivery is likely to grow but will continue to evolve as large delivery companies try harder to make profits. Reduction in promotions offered to end customers, minimum order $ values, consolidation among major delivery companies etc. is likely to happen. Restaurants should continue to offer delivery option thru these specialty delivery apps but should closely monitor their business, trends, patterns etc. and plan their operations accordingly.

Restaurants should identify the top 1 or 2 delivery apps which have the best service and processes in the respective market and stick with them Versus offering delivery through all of the Delivery companies / apps. Restaurants can and should negotiate fees and other terms with delivery companies.

We would love to hear your experiences and thoughts in the comments below!

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