Leaving Consumers Confounded
To tip or not
it's up to the consumer, but let's be honest, society judges bad tippers.
However, in this economy, shelling out extra cash, however well-warranted, is
becoming more and more difficult for many consumers.
survey from Popmenu shows consumers are tipping less than they were even
one year ago. Forty-three percent of consumers said they tip their servers at
least 20% of the check, down from 56% of consumers last year. Similarly, 32% of
people reported tipping delivery workers 20% of their order, down from 38% a
have overcome a myriad of challenges over the past two years and inflation is
the latest uphill battle the industry faces. With rising costs, we're seeing
consumers cut back on how much they tip restaurants for takeout and delivery
orders," Krystle Mobayeni, co-founder of BentoBox and head of
restaurants at Fiserv, told The Food Institute.
For many in
the hospitality industry, tipping is where the money is. Many restaurants have
a low hourly wage with the expectation that tips will increase this. This model
works for some, especially when the economy is booming and people are feeling
generous, but even the best server can suffer when someone leaves a bad tip.
hit, there was a push to help small businesses, and many were leaving extremely
generous tips to show support. That trend has slowed and with consumers feeling
financial stress everywhere they turn, large tips just aren't happening like
they used to.
pandemic, customers wanted to support those who live off their tips by
increasing their typical 15-20% tip. It made staff feel appreciated in an
extremely dark time," said Bob Vergidis, chief visionary officer of pointofsale.cloud.
we see inflation continue to rise, customers are becoming more aware of this
innate feeling to save. If businesses do not change their tipping etiquette,
they will lose customers."
Really Need to Tip for That?
It's an easy
decision to tip a friendly server at your favorite restaurant. The barista at
the Starbucks drive-thru that hands you your overpriced coffee? Not so
and a number of other businesses now offer prompts when inserting a credit card
that asks what type of tip you would like to leave. Yes, there's always a "no
tip" option, but many consumers feel somewhat pressured to tip in those
recently implemented this system at the checkout and in the drive thru, and
customers and even many employees don't like it. This type of practice can
actually drive away customers, some say.
people with tipping prompts as costs for goods and services rise can lead to
lost sales," Vergidis says.
restaurant industry, we're seeing more and more customers choosing take-out
instead of dining in or delivery to avoid tipping. Inflation has made people very
aware of rising costs and they're becoming more guarded with how and what they
spend their money on."
the answer? It's tricky. Many count on tips as a way to make a living, but many
consumers are unable to tip because of inflation and rising costs. Many
consumers have cut back on going out, but this means that hospitality workers
are getting no tips rather than small tips.
should be extremely strategic during this time. Avoid using standard tipping
prompts, just because there is a default option in many point-of-sale systems
doesn't mean you have to use it," Vergidis says. "Customers can feel pressured
to tip in an establishment where it typically wouldn't be required and that is
driving business away.
should consider providing staff with a raise and do away with the tipping
incentive. Lower the cost of goods where you can without losing the quality of
goods and services and focus on the total cost to the customer." Food
Predict Asian Food Boom in 2023
experts tell it, an Asian food boom has begun in America.
Food Institute webinar – "What's Ahead in 2023?" – Solomon Choi, CEO
of Jabba Brands, noted that internationally-inspired hard seltzers and
hot dogs are gaining momentum in the U.S.
going to start seeing a lot of crossover between something that was
traditionally American, (like) fried chicken, being influenced with ethnic
flavors," Choi said. "Even something like South Korean fried chicken is
starting to become its own subcategory within fried chicken.
seeing a lot more awareness, and a desire, to take what's been done and do it
in a different way. ... I think you're going to start seeing a lot more of these
types of things," Choi added, alluding to Asian-fusion cuisine.
Products Bound for Big Year
tequila, and cannabis-infused foods all rose in popularity earlier in the
pandemic. Now, it could be time for self-help products like non-alcoholic wines
consumer trends expert Robyn Carter, the CEO of Jump Rope Innovation,
many modern consumers are looking for products that will help them self-soothe
while remaining sober.
stressful times consumers historically have turned to any number of vices to
help them calm their nerves," Carter said. "But a lot of those things ... have
are increasingly seeking opportunities to enhance their mood, focus, social
skills, or sleep. But instead of turning to traditional alcohol, for example,
many consumers now seek products with adaptogens or other ingredients that help
them "put something good back in their bodies," Carter said.
how Boisson – a chain of non-alcoholic liquor stores around New York
City – has become rather popular.
are usually the first way in, and I think we'll be seeing more of this in
snacks as well – you know, particularly a lot of things with mushrooms and
other adaptogens that help consumers manage stress [or] just help them maintain
an even state of mind," Carter said.
Optimism Ahead of The New Year
director and trendologist with Datassential, spoke at length about the
high prices that continue to impact the food industry. Yet he concluded his
presentation by noting the optimism that largely persists among consumers and
business owners like restaurateurs.
this bit of recent research as proof: roughly three quarters of operators say
they feel positive about their business heading into 2023. He said consumer
sentiment findings were very similar.
most part, operators and consumers feel pretty positive about the year ahead,"
added Kostyo, a past judge on Food Network's Eating America. "I think there's a
lot of opportunity for growth and success in 2023." Food
Show Workers Love Condensed Workweeks
owners are following the corporate world's lead in having employees test the
four-day workweek – but a south Florida Chick-fil-A owner has gone
further by having employees in his fast-food establishment work 13 to 14-hour
days, amounting to a three-day workweek.
employees of Justin Lindsey's Chick-fil-A in Kendall work 40 hours in
three days, cbsnews.com reported.
plan their life around it – vacation, childcare, school. I wanted them to be
able to look out six months from now and know what days they were going to
work," said Lindsey, 42.
his workers were surprised they wouldn't be "on call" during their days off to
come in at short notice if the restaurant is understaffed, a practice that's
common at QSRs and among large retailers. He acknowledged that the longer
shifts required some adjustment, but since most of his employees who worked
three days per week already were accustomed to long days, the additional time
reported Lindsey is months into the experiment, which he conceptualized last
winter, and he reports the plan is going better than expected.
[workers] it's great because they know what the schedule is, and for us it's
great because we can stretch the shift to cover all our peaks during the day"
MarketWatch article from earlier this week noted that one study shows
abbreviated workweeks can reduce worker stress. Meanwhile, Chick-fil-A now has
multiple franchisees who are intrigued by Lindsey's condensed workweek schedule,
reportedly been deluged with applications since he posted open jobs. The
restaurant received almost 430 applications in one week. Lindsey pays $15 to
$17 per hour and provides health benefits.
restaurant was predicted to earn $17 million in sales this year, which is more
than double the $8 million per year average for a single location, restaurant
trade publication QSR reported.
‘Four' Your Work
chain Dig, with locations in New York and Philadelphia, has recently
utilized a four-day workweek, reported Fast Company.
four-day work week experiment involves giving hourly kitchen staff the option
to work full-time hours in four days per week. The chain started exploring the
idea of the abbreviated week as the concept started to trend prior to the
pandemic. When COVID-19 temporarily closed some of Dig's restaurants while
putting its workers at risk, Dig experimented with the schedule change.
cofounder Andrew Jacobson told Fast Company, "The disparity between
people who still had employment and were working from home versus our
employees, who were still going into the restaurant, just became more and more
evident. And though we couldn't necessarily change that, we had an opportunity
team had five restaurants before the pandemic, but only one was still open, so
it was an opportune moment to experiment with a new schedule. Workers were
given the chance to work one fewer day per week, if they chose, but continue to
work the same number of hours, the website reported.
To keep the
same number of hours, Dig's workers who opted to change to the four-day week
had to work 10-hour days, which worked out well because the chain's food needs
a lot of preparation. Dig's survey of 45 participants showed 87% of employees
recommend the schedule changes, citing greater work-life balance.
is a major challenge for workers in the restaurant industry," Melinda
Sharretts, vice president of people and culture at Dig told Fast Company.
"And if the new schedule can help alleviate that, it may convince other
restaurants to start offering the same benefit."
"We want not
only to put pressure on ourselves to get this done, but also to pressure the
rest of the industry," Jacobson said.
experiment involving a four-day-per-week work schedule was a pilot conducted
from December 2020 to June 2022 by global corporation Unilever in New
Zealand, the Guardian reported.
which makes products such as Magnum ice cream, said in early November it would
continue the New Zealand trial and implement it in Australia for an initial 12
The Guardian, Unilever said that employee absenteeism dropped 34%, and
the staff in the trial reported a 33% drop in stress. Meanwhile, there was a
reported decrease in work-life conflict of 67%, employees received 100% of
their wages, and there were strong results in meeting business goals. Food
· Get ready to see significantly more Taco Bell, Pizza Hut,
and KFC locations. Yum! Brands said they believe there's enough
white space for the company to add 100,000 global restaurants to the 54,000
locations its chains already operate, reported Restaurant Business (Dec.
· Meanwhile, Yum! Brands' future is 100% digital sales. That's what
Christopher L. Turner, CFO, said on investors day on Dec. 13 about the global
food giant's future. Right now, digital sales account for 40% of sales, reported
Food Business News (Dec. 15). Full
· Additionally, Pizza Hut is changing its business model to attract
younger customers and the plan seems to be working. Smaller, less pricey products
such as the Melts are attracting Gen Z and Gen Alpha, reported Restaurant
Business Online (Dec. 15). Full
· Chipotle Mexican Grill announced it teamed up with The Farmlink
Project to help donate more than 10 million pounds of produce to food
banks this winter. Full
· McDonald's is going solar. The fast-food giant and its logistics providers
have signed a deal with Enel North America to purchase renewable energy certificates
to support 100% of its energy needs in the U.S. supply chain, reported Restaurant
Business Online (Dec. 15). Full
· Olive Garden's never-ending pasta bowl is back and attracting customers.
Amid inflation and the holiday season, sales and foot traffic have received
a huge boost since the promotion returned, reported Restaurant Business
Online (Dec. 16). Full
· Restaurant franchise Freshii is set to be acquired by Canadian
franchisor Foodtastic for $74.4 million. The all-cash transaction delivers
immediate liquidity to Freshii's shareholders, the parties noted on Monday,
reported Restaurant Business Online (Dec. 19). Full
· Canadian coffee chain Tim Hortons is abandoning plastic cutlery.
Wooden and fiber cutlery will debut in 2023 along with other sustainable initiatives
to reduce waste, reported Restaurant Business Online (Dec. 20). Full
· Starbucks has launched a blockchain-based loyalty program and NFT
community, Starbucks Odyssey, to its first group of U.S. beta testers. The
new initiative, which includes coffee-themed NFTs that translate to real-world
experiences, is an extension of Starbucks' existing loyalty program, but leverages
web3 technology like the polygon blockchain and NFTs, reported TechCrunch
(Dec. 8). Full
· Potbelly plans to rapidly expand its digital kitchen program, citing
improved order accuracy and reduced labor costs. CEO Bob Wright outlined his
plans to reach 2,000 units and re-ignite franchise growth, reported Restaurant
Business Online (Jan. 9). Full
· Del Taco will add AI voice bots to its drive-thrus. The 600-unit Tex-Mex
chain said technology from Presto has exceeded its expectations and
has completed over 95% of orders without human intervention, signaling a broad
step forward for automated fast food commerce, reported Restaurant Business
Online (Jan. 10). Full
· Denny's new CEO, Kelli Valade, is doubling down on employee mental
health benefits. Valade said that in addition to opening more units, one of
her primary goals is to nurture the culture at Denny's as the brand evolves
and help restaurant workers deal with the demands of the work, reported Restaurant
Business Online (Jan. 10). Full
· In-N-Out is set to open its first East Coast territory office in Tennessee.
The fast-food chain will start opening restaurants in the state in 2026, potentially
growing east of the Mississippi River, reported Restaurant Business
(Jan. 10). Full
· Subway is exploring a potential sale that could value the sandwich
chain at more than $10 billion. With 37,000 locations in more than 100 different
countries, Subway has long been a potential target for private equity firms
and other corporations. The sale is still in its early stages and not yet
public information, reported Bloomberg (Jan. 11). Full
· Wendy's Co. will revamp its operations as consumers are seeking deals
when spending with the company. U.S. CFO Leigh Burnside and U.S. president
and chief commercial officer Kurt Kane will depart the organization, and the
company will determine further organizational changes in the next 45 days
to help reduce costs, reported The Wall Street Journal (Jan. 13). Full
· Modern Restaurant Concepts has named John Cywinski its CEO. The former
president of Applebee's has taken the helm of the Los Angeles-based
parent company of Qdoba, Lemonade and Modern Market Eatery.
· Jack in the Box pledged to give pregnant sows in its supply chain
more space after pressure from an investor for more humane treatment. Green
Century Capital Management, which owns shares of the fast-food chain,
has called on suppliers to stop keeping pregnant sows in individual pens,
reported Bloomberg (Jan. 17). Full
on the Move:
· KFC named Ben Dubost as chief development officer and Kate
Ward as chief legal officer, reported Restaurant Business Online (Dec.
· Blaze Pizza has named Beto Guajardo as its new CEO. Guajardo
had previously served as president of Focus Brands. Full
· Burger King has named Patrick O'Toole as its new CMO, effective February
6. O'Toole recently served as the CMO for Mountain Dew, reported The Wall
Street Journal (Jan. 10). Full