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A letter to Santa's elves

Dear brothers in toys,

As a disgruntled shareholder who teamed up with the National Labor Relations Board to oust the old bearded guy, I’m writing to deliver my annual holiday list of demands. Last year my requests were ignored and, instead, I found a heap of coal under my tree—not a bad development given the polar vortex, but reason enough to scrap Santa faster than Olive Garden’s breadsticks policy. This year, there’s no excuse for unpleasant surprises.

While you’re at it, I have requests for the restaurant industry, which just slogged through one of its chilliest years. We’re not talking weather here.

1. A zombie invasion

Hordes devouring everything in sight, regardless of price or trendiness—what better antidote for the industry’s main ill of 2014? Sure, there’ll be some innocents eaten. But think of the effects on traffic.

It needn’t be a long-term thing; drastically sharper same-store sales for the third quarter from operations such as Papa Murphy’s (8.4 percent), Domino’s (7.7 percent) and Popeyes (7.3 percent) point to improved guest counts as the year ends. Traffic is coming back, but there’s no matching the drama of the undead marching on restaurants, oblivious to any dress code.

2. Paper bags for servers’ heads

This year brought a new industry term: customer friction, or anything that stops the transaction from proceeding at a flat-out run. Paying a cashier? Friction. Giving a server an order? Friction. Having to slow down on a line? You get it.

Operators are learning that patrons, particularly younger ones, would rather punch an order into their phones, pay for it and pick it up or have it brought out, sans human interaction. BJ’s Restaurants already offers this, for dine-in guests no less. Dozens more, including Starbucks, will soon crack the code.

Not all operators have the inclination to alleviate all that time-consuming interaction, such as saying “welcome” to a guest. For them, the answer is analog: Hide staffers’ faces, and maybe service will feel like that frictionless glide.

3. Delivery drones

It wasn’t just customers wanting to swoosh through a sale like speed skaters. If there was a major operational trend in 2014, it was the push for faster throughput.

Chipotle cited added throughput as a main reason for its huge sales growth. Everyone from McDonald’s to Panera, Starbucks, Potbelly and Burger King invested considerable effort in processing orders more efficiently, using techniques that ranged from traditional line busters to preordering and prepaying.

So, Little Ones, how about a way to get orders to customers from miles away? Eliminating their in-store arrival could streamline the process and get more orders sold.

4. A 25-hour day

It won’t be sufficient—complying with the Affordable Care Act alone will eat up that extra hour. But as operators face obligations they’ve never had to before—be it paid sick leave, tabulating hours on the clock or merely deciding when an employee is technically working or not (say, when they’re reading work-related emails at home)—stretching out the workday could help.

Oh, and last, could you wish everyone happy holidays from the decidedly daft staff of RB?

Signed,
Reindeer Capital

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