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Posts Tagged ‘Restaurants’

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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How long is long enough? That effectively is the question asked in a recent Wall Street Journal article with regard to quick service restaurant hours of operations (Will Longer Hours Boost Sales?, Apr 29). Here is the issue:

With a lean economy squeezing their sales, thousands of restaurants are extending their hours to try to get more people through the door. But franchisees are learning that it can take a lot of work to get the most out of off-hours snackers.

The basic problem: Restaurants need to shoulder more expenses to keep the lights on longer—but the crowds usually aren’t that big at odd hours, and customers don’t end up spending very much. In fact, franchisees and industry experts say, some markets may not have enough all-night types to make the concept work at all.

The drop off in traffic in the wee hours of the morning is illustrated here.

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What counts as good service at a fast food restaurant? Speed obviously matters but what about staff interactions? No expects a quick service restaurant to have a Zagat’s rating (although some Chicago hot dog stands are graded) but can fast food service slip so much that customers notice?

Apparently the answer is yes, and furthermore McDonald’s hasn’t been doing so well in delivering service (McDonald’s Tackles Repair of ‘Broken’ Service, Apr 10).

But achieving speed and friendliness of service across the chain has been a particularly elusive goal, at least in part because about 90% of McDonald’s restaurants in the U.S. are owned by independent operators.

In QSR Magazine’s annual Drive-Thru Study, the only comprehensive industry comparison of customer service at fast-food chains, other restaurants have consistently outperformed McDonald’s in those areas. In last year’s study, the average service time at the McDonald’s drive-through studied was 188.83 seconds, compared with 129.75 for industry leader Wendy’s Co.  Chick-fil-A had the top friendliness ratings. Out of the seven major chains in the study, McDonald’s was second to last in the “very friendly” ranking, just above Burger King.

So what are the root causes of the problem and what can they do about it? (more…)

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How do you grow a service business when growing means adding locations? That’s always been one of my favorite topics in service operations. It poses interesting challenges on what must be standardized and where flexibility should be maintained. The Globe and Mail has an interesting profile of  Toronto entrepreneur who has had to grapple with these issues as he has expanded his takeout restaurant from one location to four (Restaurateur creates winning recipe to manage multiple locations, Mar 8). They’ve gone the emphasize-standardization route.

Over the next seven years, Mr. Ross opened up three more Veda locations, two in buildings on the main University of Toronto campus, in 2007 and 2009, and one this past summer at University and Dundas, close to a group of hospitals. To manage across these locations, he pays close attention to as much standardizing as possible.

Since Mr. Ross believes food consistency to be critical, all the cooking is done in a central location. This means not only that food in all of Veda restaurants is cooked using the same recipes, but that it all comes from the same batch. The cooking takes place in the original, flagship Yorkville location and is distributed to the other locations each morning.

To ensure that the right food is at the right place at the right time, Mr. Ross needs to be able to estimate demand at each location on each day of the week. He has systems in place that allow him to predict that, and to tweak the prediction if there are events, such as large conferences, in the area. As well, he has a driver on call at all times who can deliver food to a location within 10 minutes if there is unexpected demand and something is running out.

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