Can we get a Doh! from fast-casual?
Jaws will drop when fast-casual chains realize the solution to a nagging question has been lurking in plain sight. McAlister’s Deli spotted it, as Marketing VP Donna Josephson recounted at this week’s Technomic’s Consumer 2014 Trends & Directions conference. Like other fast-casual brands, McAlister’s looked wistfully upon the volume fast-food chains were cranking through their drive-thrus. But that service option just doesn’t work when you’re customizing orders that take longer to prepare from the get-go because there’s actually craft involved. What’s a fast-casual brand to do if it wants to snag the customer who won’t sacrifice convenience for quality?
Instead of looking down-market, McAlister’s looked up. It decided to steal casual dining’s now-standard innovation to capture more takeout sales, curbside to-go. In case you’ve been on a bender for the last six years, that’s the service where patrons phone in their orders from home, the office or the car, then pull into a designated spot outside the restaurant, where servers hand over the takeout meal.
“We have that in a few restaurants, and it’s working pretty well for us,” said Josephson.
It’s official: Quality trumps price in signaling value
Operators should be smacking their foreheads over this one, too. Other than posting the industry’s best financial results, what do Starbucks, Chipotle and Wendy’s have in common? They’re all striving to deliver quality, not cheap prices. There should have been no doubt among restaurateurs that quality turns heads, no matter how frugal the consumer needs to be. Yet other big brands continued to fly-caste low-ticket enticements into the market.
Consumer survey results aired at the Technomic event left no doubt it’s time to change bait. “Food and beverage [quality] now trumps price in creating good value,” explained Donna Hood Crecca, one of the research firm’s senior analysts. “This is true across all segments of food service. Even at limited service restaurants, quality and taste of food is the most important element in the value equation.”
Pan, fire—you get the picture
New York City may have changed its mayor, but City Hall’s interest in regulations direly opposed by restaurants hasn’t waned at all. This week, for instance, new Mayor Bill de Blasio called for mandating more employers to provide paid sick leave. Hizzoner wants to change an already enacted law so restaurants and other businesses with as few as five employees would have to provide up to five days of paid leave time. The current law, which goes into effect on April 1, applies only to employers of 20 or more staffers. De Blasio’s predecessor, Mike Bloomberg, was far more active in antagonizing restaurants, pushing through measures that were quickly copied from coast to coast, like menu labeling, trans fat bans and the elimination of polystyrene takeout containers. But DiBlasio is less than a month into his job, and he’s pledged to be an activist office holder.
Dickeys Barbecue steps up expansion
That’s like Warren Buffett saying he plans to get rich. The once-sleepy fast-food chain has been on a little-noticed growth tear, with stores opening by the dozens since the Great Recession. More than 130 additional units are in the pipeline for 2014 alone, on a base of 372 outlets. This is not some flashy gimmick-driven newcomer with a carnival-barker-style CEO. It’s a 72-year-old business that’s still operated by the founder’s family. So when a press release trumpets the biggest franchise deal Dickeys has ever engineered, an editor is at severe risk of whiplash. The inked agreement calls for the opening of 100 stores in southern California by former KFC franchisees Kevin and Bryan Roche, who already operate a handful of Dickeys locations. The CEO, Roland Dickey Jr., says he expects similar big deals to be struck now that Dickeys has a track record.
The other techno-phobes
Applebee’s did encounter some resistance to its new tabletop ordering systems, but the pushback didn’t come from customers. “The big thing is getting the wait staff buy-in,” Technomic’s Greg Hobby noted at the firm’s consumer conference. The servers were afraid they’d lose tips because customers were placing some orders themselves, he explained. But the fears were quickly dashed, as servers learned that tables were turned more quickly, meaning potentially more money in their pockets. Hobby’s observations were confirmed by an Applebee’s executive in the audience. He added that customers have showed no indication of feeling short-changed service-wise because they were punching in orders themselves.
Quick bonus head-turners from the Technomic conference: Consumers are more likely to buy breakfast near their homes than their workplace or other destinations … Half of all consumers view customization as a crucial element of value … 40 percent of consumers use daily deals from services like Groupon or Living Social … The mean expenditure for a snack purchased at a restaurant is $5 … For restaurants, coupons and other deals are far and away the prime way of drawing the attention of social media users … One of the perks Mimi’s Café extends to members of its loyalty program is promise they can jump the line and be seated immediately … Concepts outfitted with a drive-thru may be missing a sales opportunity with Latino consumers. Hispanics who primarily speak Spanish may forego that mode of service because they’re embarrassed about giving an order in broken English. Having a Spanish speaker at the order-taking station would allay that fear, provided potential customers get the word.