Heresy abounded in the restaurant business this week as some of the industry’s biggest names questioned what’s become management gospel for the forward-thinking. Third-party delivery? Uh, wait a minute. And shouldn’t there be a brake on this customization craze? While we’re at it, was that breakthrough way of managing wing costs really such a smart way to go?
Clearly the most noticeable direction in the business this week was backward.
Shift into park for a moment and see how such trendsetters as McDonald’s, Chili’s, Outback and Buffalo Wild Wings are shoving the gearshift into reverse.
1. McDonald’s rethink of customization
The behemoth of the industry will take another major step in its turnaround drive with the rollout next week of Signature Crafted sandwiches, a line that appears to provide patrons with the leeway to completely customize their sandwich. But the approach is more like car dealerships’ reliance on what are called trim packages: Customers still have choices, but the options are limited.
Customers will be able to pick one of three flavor platforms: Pico Guacamole, Sweet BBQ Bacon and Maple Bacon Dijon. For each, they choose the protein (a burger, a fried chicken fillet, or a grilled chicken patty) and the type of bread (artisan roll or sesame-seeded bun).
The pick-a-package approach is an alternative to giving guests a complete blank slate to build a sandwich—any ingredient blended with any number of others, on any sort of bread, with any level of condiments (extra ketchup, etc.). Instead of providing hundreds of variations, the new line limits the permutations to under two dozen.
The sandwiches will be marketed as premium options, with a price of around $4.99 each.
2. Reconsidering third-party delivery
The bloom may have been knocked off that rose by service fees running as high as 30% of a guest’s ticket. Plus, restaurateurs are still squeamish about surrendering their food to some delivery kid who’s more interested in what’s blaring from his car’s sound system than in getting an order delivered intact and still hot.
Panera Bread has said from the get-go that it intends to build its own delivery fleet rather than depending on third parties. Buffalo Wild Wings and Bloomin’ Brands, the parent of Outback and Carrabba’s, both stressed this week that they’re exploring a hybrid approach—using third parties and their own employees to deliver the food.
As Bloomin’ CFO Dave Deno pointed out, the economics and brand control are just more attractive when you do it yourself. Most of the 116 Outback and Carrabba’s stores that currently offer delivery are using the company’s in-house team, he noted.
Similarly, Brinker International is trying a variety of ways to ride the off-premise boom. There’s experimentation with third-party deliverers within its Chili’s brand, but Maggiano’s, the company’s other chain, has its own vehicles. And Chili’s hasn’t given up on an in-house approach, according to Brinker CEO Wyman Roberts.
More radically, the company is shifting attention back to curbside delivery, or what had been yesterday’s preferred way of snagging more takeout business. Roberts said this week that Chili’s is testing a new curbside pickup arrangement that pivots on a new app. He did not provide a detailed description, but indicated that it will be all app-based, with the customer able to order, pay and then alert the restaurant to their presence in the parking lot for the delivery of the order to the vehicle.
3. Buffalo Wild Wings’ wings woes
The success of a Tuesday night promotion has turned into a significant problem for Buffalo Wild Wings, one of the industry’s largest consumers of chicken wings. To bolster midweek traffic, the chain adopted a chainwide program of discounting wings on Tuesday nights, an arrangement that looked fine on paper. But the idea hinged on a drop in wing costs after the March Madness college basketball playoffs, and that decline didn’t materialize this year.
Margins were also crunched by the chain’s switch several years ago to a new way of portioning its wings. Instead of giving a set count of wings, BWW switched to providing a certain weight. Instead of providing 10 wings, regardless of their size, an order might contain eight or nine pieces, provided the weight was the same.
The industry took notice of the change, and many chains either made the same switch themselves, or at least contemplated it.
But the switch backfired, according to BWW CEO Sally Smith. Apportioning the wings by weight meant that some customers should be getting 8.5 wings, “and you can’t serve half a wing,” she said.
In addition, she indicated, some stores kept serving 10 wings to an order, regardless of their size, apparently for ease of operation.
Now the chain is rethinking both its approach to apportioning and how it can continue to discount wings on Tuesday without taking a painful profit hit.
4. McDonald’s embraces what BWW abandons
Buffalo Wild Wings is also reversing its adoption of an in-store position created three years ago to help customers navigate the menu and new service features like tabletop technology, which allowed guests to order some items themselves. This month the chain eliminated the Guest Experience Captain post in 90% of its restaurants, with the duties parceled out to other staffers. The move is part of a comprehensive effort by the brand to cut costs and better manage its labor.
Ironically, McDonald’s cited its creation of a new post, the Guest Experience Leader, as a reason why use of self-ordering kiosks doubled year-over-year in Canada during the first quarter. The GELs help customers navigate the customization features of the kiosks, which are being rolled into every U.S. restaurant right now.
5. A state’s big gulp
After loosening some of the nation’s most stringent (and strangest) rules for serving alcohol, Utah plans to take half a step backward next month to spare the pure at heart from temptation.
Alcohol-serving establishments will be required as of May 9 to post signs designating whether they are restaurants—food places that just happen to sell intoxicants—or bars, the sin pits where drinking is the main activity. The alerts are intended to keep patrons from mistakenly exposing themselves or their families to a place that doesn’t mesh with their religious sensibilities, a risk that some lawmakers associated in particular with Starbucks. A majority of Utah’s residents are members of The Church of Jesus Christ of Latter-day Saints, which forbids the consumption of alcohol and caffeine.
Each sign must measure 8.5 inches by 11 inches and be posted at the entrance.
The requirement follows an effort by the state’s restaurants and other tourism-related businesses to loosen restrictions on liquor service and broaden Utah’s appeal to visitors from out of state. For instance, bartenders no longer have to work behind what was called a Zion curtain, or a screen that prevented children from seeing mixology in action. Advocates of the curtain were fearful the showmanship of bartending might foster curiosity about drinking.
Instead, restaurants now have to keep patrons at least 5 feet away from the drink-prep area, or what some are calling the Zion Demilitarized Zone.
Some of the more senior members of the team smile at the junior staff who are excited to uncover an interesting trend in “eatertainment” or the latest single-ingredient concept. We try not to be condescending when we suggest they do some research by looking at past issues of Restaurant Business or old Technomic top chain reports before calling it the next big thing.