The restaurant business doesn’t look like it did even five years ago. Even more startling are the changes in how it operates. Somewhere along the way, consumers rewrote the script, technology pushed out longstanding standard operating procedures, and costs triggered considerable reconsideration of the status quo. Here’s a look at how those and other factors shook out in 2015 and deflected operations in different directions.
It’s the mantra of the year. Instead of adding new dishes just to keep up with the latest trends and ending up with a menu that reads more like a novel, operators cut the slackers and focused on better execution of fewer options. Why not, if customization can give customers the twists and tweaks they want without having to list all the possibilities on the menu?
McDonald’s latest CEO, Steve Easterbrook, has said that simplifying the chains’ menu is a big part of its turnaround plan. In April, it cut seven sandwiches to slim the menu and help customers who felt overwhelmed. Drive-thru menu boards were overhauled to spotlight fewer items and speed the decision-making process.
Burger King boasted that it kept same-store sales climbing with just five tweaks to its menu. Wendy’s found that it could take the same toppings used on a limited-time burger, be it pulled pork, bacon or an artisan cheese, and add it to French fries, creating another draw without spec’ing another ingredient.
Profitable menu simplification went beyond a reduction in pantry SKUs. When Qdoba posted huge same-store sales gains early in the year, parent Jack in the Box cited a controversial decision to set one all-inclusive price for signature items, instead of charging extra for embellishments like guacamole.
Danny Meyer made headlines in October when he announced that his Union Square Hospitality Group would halt tipping at all 13 of its restaurants. While he’s not the first restaurateur to go the no-tipping route to level the pay of front-of-house and back-of-house staffs, his announcement prompted many others to take notice. Most operators seem to be taking the wait-and-see approach at this point; the concern uttered by many we’ve spoken with: How customers will react to increased menu prices or a service fee. Initial assessments have been positive for USHG, but it remains to be seen if his big move will have a ripple effect, causing the majority of restaurants to eliminate tipping down the line.
Technology has changed the way restaurants can take reservations; several higher-end spots across the country have moved past OpenTable to ticketed dining instead. The benefit: managing the risk of customers keeping reservations. Ticketing systems have diners pay for their meals in advance, no refunds or changing. This summer, after months of hype, Chicago restaurateur Nick Kokonas (partner in Michelin-starred Alinea) launched his restaurant-booking platform, a ticketing system for operators to purchase and integrate. Since then, more than 50 restaurants have signed on—a sign that this may be a burgeoning trend, especially since ticketing systems have the added bonus of possibly being a way around the many issues with tipping. At this point, it’s mostly higher-end restaurants on ticketing systems. But Kokonas says his system isn’t only intended for high-priced spots.
At a time of soft traffic, a condition operators couldn’t shake in 2015, conventional wisdom calls for increasing sales by driving up average checks. This year, it was all about serving more customers in the same amount of time. Chipotle officially made the word buzzy in late 2014 when it credited its “linebackers”—the floaters who stock the line during peak hours—for upping throughput and thus increasing same-store sales. Pretty much each earnings call since has made mention of throughput and the efforts the fast casual is making to deliver faster service.
Other chains, too, are making adjustments to increase the number of guests it can serve. The prime example: Panera 2.0. The chain turned to technology such as self-ordering kiosks to speed the process.
Newk’s Eatery and Dickey’s Barbecue also turned to new prototypes this year in an effort to improve throughput, though they specifically focused on speeding up takeout and online orders, respectively. Still others, such as El Pollo Loco, are making smaller adjustments—including reconfiguring the prep line, adding pagers for waiting guests instead of taking the name at the register and simplifying menu builds; but it’s still managed to cut wait times by more than 30 seconds.
The struggle to keep labor costs in check became much more complicated in 2015. Operators winced as they saw jurisdictions adopt higher minimum wages, paid sick leave, penalties for short-term scheduling changes, and more.
Among the challenges that was set for the industry was the Obama Administration’s proposal in June to greatly expand the scope of salaried managers who qualify for overtime pay. Opponents warn the increased costs could run into the billions. The final regulations were scheduled to be issued this year, but Washington, D.c., is now expected to wait until after next November’s elections, knowing how controversial the proposals might be.
The union-backed Fight for $15 movement continues to make waves with its protests and marketing, as a number of jurisdictions continue to weigh and vote on raising the pay floor. And going into an election year, these issues are sure to heat up even more.