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Posts Tagged ‘Restaurants’

Has the advent of smartphones changed customer behavior in restaurants? According to a piece in PetaPixel, it has and not in a really good way (Restaurant Finds that Smartphone Photos Have Doubled Table Times Since 2004, Jul 14). Here’s the gist of the story, someone at a popular New York City supposedly sat down and looked at security footage from 2004 and 2014 and compared how long customers sat at tables. They measured out how long it took them to peruse the menu, eat their food etc. Here is a sample description of what they found in 2014.

  • Customers walk in.
  • Customers get seated and is given menus, out of 45 customers 18 requested to be seated elsewhere.
  • Before even opening the menu they take their phones out, some are taking photos while others are simply doing something else on their phone (sorry we have no clue what they are doing and do not monitor customer WiFi activity).
  • Finally the waiters are walking over to the table to see what the customers would like to order. The majority have not even opened the menu and ask the waiter to wait a bit.
  • Customer opens the menu, places their hands holding their phones on top of it and continue doing whatever on their phone.
  • Waiter returns to see if they are ready to order or have any questions. The customer asks for more time.
  • Finally they are ready to order.
  • Total average time from when the customer was seated until they placed their order 21 minutes. [Compared to 8 mins in 2004]

There are similar delays for taking pictures of food or each others over the rest of the meal. The punchline is that they found that the average time a party sat at a table climbed by 50 minutes — from 1:05 to 1:55.

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Restaurant reservations are back in the news. The Wall Street Journal had a story discussing two aspects of reservations — restaurants that offer tickets and sites that sell other people’s reservations (Ticket to Dine: The Restaurant Reservation Revolution, May 30). The first of these is an interesting trend if only because it so drastically changes the nature of running a fine dining establishment. Even with reservations, the number of people a restaurant serves in a night is random since they cannot guarantee that everyone will show up. Turns out, making people pay upfront does wonders for attendance.

“I’d been thinking about tickets for years,” said Nick Kokonas, a former derivatives trader who pioneered the approach, in 2011, at his Chicago restaurant Next—one of three ticketed spots he runs in the city with chef-partner Grant Achatz. At his tasting menu restaurants the ticket price covers the full cost of a meal—tax and tip included—with beverage pairing available as an optional add-on. But Mr. Kokonas has also begun experimenting with tickets in an à la carte setting, pre-charging $20 per seat at his cocktail bar the Aviary—a down-payment on the food and drink you’ll be consuming that night. “Our no-shows at the bar dropped from 14% to near zero,” he said. “If people buy tickets to a show, they go see the show.”

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We have posted in the past on how the burrito-chain Chipotle has increased the rate at which it moves customers through its restaurants, or as an article on Quartz terms it, its burrito velocity (Chipotle continues to refine the science of burrito velocity, Apr 21). The numbers are pretty remarkable.

Over the first three months of 2014, the US Mexican-food chain saw an average increase of seven transactions per hour at both peak lunch and dinner hours—12 to 1pm and 6 to 7pm, respectively. On Fridays, one of its busiest days of the week, Chipotle fielded 11 more customers per hour at lunchtime on average across its stores, a roughly 10% increase. …

Some of Chipotle’s fastest restaurants currently run more than 350 transactions per hour at lunchtime, which equates to a ludicrous near-six transactions per minute. The nationwide average is currently somewhere between 110 and 120, according to Moran. But they’re getting faster, and faster, and faster.

So how do they accomplish this increase in speed? (more…)

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How long is too long to hang out at a fast food restaurant? Does it matter if we are talking about a McDonald’s instead of a Starbucks? Those questions are part of a spat between a New York McDonald’s outlet and a group of elderly Korean customers (Fighting a McDonald’s in Queens for the Right to Sit. And Sit. And Sit., New York Times, Jan 14).

For the past several months, a number of elderly Korean patrons and this McDonald’s they frequent have been battling over the benches inside. The restaurant says the people who colonize the seats on a daily basis are quashing business, taking up tables for hours while splitting a small packet of French fries ($1.39); the group say they are customers and entitled to take their time. A lot of time.

“Do you think you can drink a large coffee within 20 minutes?” David Choi, 77, said. “No, it’s impossible.”

And though they have treated the corner restaurant as their own personal meeting place for more than five years, they say, the situation has escalated in recent months. The police said there had been four 911 calls since November requesting the removal of the entrenched older patrons. Officers have stopped in as frequently as three times a day while on patrol, according to the patrons, who sidle away only to boomerang right back. Medium cups of coffee ($1.09 each) have been spilled; harsh words have been exchanged. And still — proud, defiant and stuck in their ways — they file in each morning, staging a de facto sit-in amid the McNuggets. …

“It’s a McDonald’s,” said Martha Anderson, the general manager, “not a senior center.” She said she called the police after the group refused to budge and other customers asked for refunds because there was nowhere to sit.

You can also check out this oddly awesome video.

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Restaurant reservations remain an endless source of fascination for me so I was struck by a recent article on Slate suggesting that restaurants sell reservations (Restaurants Should Sell Reservations, Dec 28). Here’s the pitch:

Walking past a bunch of people standing in line to wait for brunch tables just now, I’m reminded that there seems to be a compelling logic behind the idea that restaurants ought to sell reservations separately from food or drink. The price of a steak is determined by the food cost and the food cost ratio that a restaurant needs to make its economics work. But as there’s clearly higher demand for a table Saturday at 7 p.m. than Tuesday at 5 p.m., making the Saturday reservation should cost you extra.

The author notes that Alinea here in Chicago sells reservations (which we have covered before with its sister restaurant Next) and argues that while Alinea is very high-end that a similar logic should hold at less lofty places.

But for a more ordinary restaurant—good food, good service, good decor, but nothing to make a huge fuss over—timing is really important. A table outside on a nice day at the prime brunch hour is a delight, over and above the value proposition of the food. Putting the table and the time itself up for sale over and above the price of the food would be a smart move.

So is this a good idea? (more…)

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So how much does it cost to make a hamburger — in Nigeria? Turns out, it costs more than you might realize (Burgers Face a Tough Slog in Africa, Dec 10, Wall Street Journal).

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This is the breakdown for a Johnny Rockets burger and some of the numbers might seem out of whack — Why should iceberg (!) lettuce costly nearly five times as much in Africa as New Jersey? The answer is simple: It’s imported. Why import lettuce? Because the local supply chains are simply not sophisticated enough to support the quick service business.

But that quest is straining a supply chain that is short on the refrigerated trucks and warehouses needed to keep patties and vegetable toppings fresh. And in many places, Africans are consuming beef at a faster clip than cattle ranchers can deliver new cows, meaning beef prices keep climbing. That is testing the limits of what the continent’s young urbanites can afford.

And this is not just about Africa. (more…)

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We’ve had a bunch of quick-service restaurant stories lately but this one on Panera is too nice to pass up. The Wall Street Journal reports that Panera has lowered its growth forecast in part because of poor customers service — long lines and messed up orders is costing them business (Panera Says It Can’t Handle Crush, Oct 23).  So what are they looking to do about it?

Panera plans to modestly pare its menu, which will reduce preparation time. The company also plans to migrate phone orders to the Internet to save time for workers who have to “drop everything” to handle phone orders, Mr. Shaich said.

The company also plans to create dedicated catering hubs in existing restaurants to handle catering for a few restaurants in order to free up the cafes from handling catering orders.

Next year the chain plans to introduce a new menu structure that will group items by price so that people who are looking to save money can easily find lower-cost options.

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Most of us think of IKEA as “just some oak and some pine and a handful of Norsemen selling furniture for college kids and divorced men” but they also move a boat load of food. The Wall Street Journal reports that with food sales of around $2 billion per year, they are around the same size as Panera and Arby’s (IKEA’s Path to Selling 150 Million Meatballs, Oct 17). Just why and how did IKEA get into the meatball business? Check it out.

And here’s the reporter with a little more information explaining how IKEA has grown its food business.

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Fast food is supposed to be, well, fast. But is speed everything? If you think about how different chains advertise, they are often emphasizing price or some expansion of their offerings. Essentially no one ever says that they will get you on your way in two minutes. Speed is taken as a given but there has to be some interplay between the range of what a firm offers and how fast they can serve customers.

That gets us to QSR Magazine‘s annual survey of drive-thru lane performance (The Drive-Thru Performance Study, Oct 2013). Drive thrus matter since they can account for 60 – 70% of sales and QSR’s survey is something of an industry standard since they have been at it for 15 years. You can find information on their methodology here and a paper co-written by Gady that uses this data here. The most interesting insight from the survey comes from comparing data on service times (i.e., how long does it take from when you get to the order board until you have your bag of food) this year with last year.

QSR DataAs the data shows, service times are getting slower as a whole. The industry average went up about 5% from 172 seconds to 180. What’s driving the increase?

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How do you feel about tipping? Are you happy to reward a well-done job or do you have more of a Mr. Pink attitude toward gratuities?

A pair of recent Slate articles got me thinking about tipping. The first is pretty straightforward and makes the case that tipping at restaurants should just be banned (Tipping Is an Abomination, Jul 9).  The argument is that the practice is bad for customers since it leads to uneven treatment and bad for workers since it allows employers to pay absurdly low wages. But what happens when a restaurant simply eliminates tipping? That is the topic of the second article written by a former restauranteur who did just that (What Happens When You Abolish Tipping, Aug 14). In lieu of tipping, the restaurant added an 18% service charge to the check. Thus it pricing was more like an auto service station that breaks out its labor charges from the cost of parts.

The primary reason for the switch was to have greater equity between the front and the back of the house.

We made this change because we wanted to distribute the “tip” revenue to our cooks as well as our servers, making our pay more equitable. Servers and cooks typically made similar base wages—and minimum wage was the same for both jobs—but servers kept all the tips, which could often mean they were taking home three times what the cooks made, or more. In California at that time, it was illegal to distribute any tip money to cooks. (Recent court rulings in the Western U.S. have loosened that restriction somewhat). By replacing tipping with a service charge, we were legally able to redirect about a quarter of that revenue to the kitchen, which reduced the income disparity and helped foster unity on our team.

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