The week’s 5 head-spinning moments: Shifting service edition

In the beginning, there was the server, scribbling down what guests desired and walking that information to the kitchen. Then came-eth the cafeteria, where customers served themselves, and the fast-food counter, which begat the drive-thru and what quick-service heretics hailed as fast-casual. But the truly biblical change in restaurant service might have come this week, with plenty of weeping and gnashing of teeth to follow among tech agnostics.  Hear thee why:

McDonald’s order-ahead move.

If you have any doubts the order-placement process is shifting out of restaurants, cast them into eternal damnation. According to a little-noticed scoop, the supreme arbiter of restaurant standards is testing a remote ordering and payment system in 22 Georgia units.

Here’s how Business Insider says the set-up works: Customers place an order via an app with a McDonald’s of their choosing. When they enter the restaurant or pull up to its drive-thru, they snap a QR code that charges the bill to a pre-determined credit card.

If the customer is at the drive-thru, the order is prepared and given to them then. If they enter the store, the QR reader supplies an order number. The number is displayed on a screen when the order is completed.

The evident twist: The order isn’t pre-assembled and waiting for pick-up when the customer arrives, unlike the set-up Panera Bread is adopting. McDonald’s is betting that it’s the give-and-take with a counter staffer, not the cook time, which unduly extends a transaction.

‘Welcome to our drive-thru!’

Not all of the radical changes in food service are coming from foodservice. This week Walmart revealed that it’s exploring several ways of putting high-value prepared meals within reach of more consumers.

One component of the plan is “tethering” smaller-sized Walmart Express stores to Walmart Supercenters boasting commissary-scale food-prep operations, EVP Jeff Davis told investors this week. The stores will work as mother ship and satellite, the bigger supplying the smaller with meals prepared daily for the sake of freshness. The arrangement will enable the Express outlets to offer fresh meals without expanding the stores’ footprint or capital requirements, Davis explained.

The other initiative employs—surprise, surprise!—remote ordering. As Restaurant Reality Check reported earlier, the retailer already offers an app for placing takeout lunch and dinner orders from its new Walmart To Go concept. Now, even consumers who don’t have smartphones can digitally pre-order a meal, along with light bulbs, toilet paper, prescription drugs and almost everything else that’s in a store.  Under a new program called Drive, patrons virtually stroll the store, complete the checkout, and set a time for pick-up. The goods are passed to them at a drive-thru, so they never have to step out of the car.

Sonic Drive In/Drive Thru/Eat In?

There are definitely some redundancies in Walmart’s rapidly expanding array of service modes. But the real head-spinner in that respect is Sonic. The concept is built on the nostalgia of a drive-in, where consumers pull into a parking slot, say their orders into a microphone and have it delivered by a carhop, often on roller skates. It’s the steampunk version of remote ordering.

But, like Walmart, the quick-service chain is tweaking the set-up for the sake of service variety. Virtually every new store is being outfitted with a drive-thru, according to CFO and EVP Steve Vaughan. “We’re seeing a lot of business particularly in those newer markets go through the drive-thru,” he told investors this week. Still, he cautioned, the new service format isn’t the main reason why new stores are eclipsing older units’ sales volumes by 30 to 40 percent.  The big driver, he says, is marketing and advertising support.

Vaughan was less bullish on the dine-in areas that a few stores are testing. Sonic is “seeing some pretty nice results from that,” Vaughan said, but “it’s too early to say that’s going to be a part of all new drive-ins. We’ll continue to kind of monitor the results.”

Scams for all modes.

Regardless of how high or low-tech a service model might be, consumers will find a way to game it. Or at least that’s one of the implications from this week’s deception de jour, the use of a disfigured 3-year-old to cadge money at the expense of KFC. A website raised $135,000 for little Victoria Wilcher after her grandmother said a KFC unit refused to host the little girl because of her scars from a dog attack. According to news reports that aired in every nook and cranny of the nation, Victoria was en route home from the hospital. The meal would have been a treat.

Instead, the grandmother alleged, employees asked the pair to leave because other customers were disgusted by the 3-year-old’s appearance.

As the internet convulsed with damnation of KFC, the chain pledged to give the girl $30,000 to allay her medical bills.

Then KFC discovered in its investigation of the incident that there are no indications it actually happened. The grandmother insists otherwise, but the fundraising website suspended its charity drive on Wilcher’s behalf. KFC, however, said it would proceed with its donation.

With remote ordering, the story would have never started.

Meanwhile, more trouble with tipping.

Order entry and delivery aren’t the only aspects of service that are changing. As we noted in our cover story this month, full-service restaurateurs are thinking creatively about how to compensate the linchpins of their systems, the server. Tipping, a beautiful model in which all parties benefitted, is now being questioned.

One of the reasons is the risk of getting a knock on the door from federal regulators. A 54-year-old landmark in Amarillo, Texas, the Big Texan Steak Ranch, provided details this week of what a nightmare that can be.

“The type of tip sharing we were doing and are still doing is perfectly legal,” management said in a public statement. “Second we did not short or underpay anyone. Our mistake was the way we administratively processed and recorded the tipped share amounts.”

The penalty for those accounting errors: $150,000 in penalties, in addition to the $650,000 that the U.S. Department of Labor said was due servers who worked in the restaurant since February 2011.

Big Texan did not dispute the assessments and assured regulators that it would cooperate in rectifying the situation.


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