5 predictions for restaurant chains in 2015

1. A backlash against self-ordering

Hints of a pushback were evident in a consumer survey the National Restaurant Association conducted in October. The research found a large proportion of restaurant guests had taken to dining-room tablets, kiosks and other devices that enabled them to place their own orders, bypassing servers. But about half of nonusers said they bypassed the touchscreens because they preferred interaction with a human. And that feeling was highest among the so-called wired generation, millennials. Look for full-service places to differentiate themselves in 2015 by pampering guests with high-touch service. The Cheesecake Factory has already declared it would offer nothing else.

2. The year will be a surprisingly good one, particularly for family restaurants

That sector already seems to be rebounding, albeit moderately, a pleasant surprise that analysts attribute in no small part to declining gas prices. With U.S. energy production on a steep climb, there’s reason to expect the trend to continue. Restaurants will not only benefit from the increase in disposable income, but also the heightened confidence consumers feel about their ability to pay bills.

3. The balance of power will tip ever so slightly away from fast casual

Traditional quick-service brands have stolen enough of their fast-casual brethren’s tricks to win back customers searching for a more upscale experience. Look at the performance this year of Wendy’s and Jack in the Box. Even McDonald’s is trying customization and running orders to customers’ tables. At the other end of the spectrum, casual chains are resolving their identity crisis. No longer are they scrambling to be like fast casuals when that makes no sense, as in a Red Lobster or Olive Garden. Several, most notably Ruby Tuesday, have backed off from a march into pricier territory. And they’ve focused more on the customer and the reasons—plural—as to why patrons once visited, like finding good beers on tap and old favorites on the menu. It’s a marked change after years of just aping one another or driving up checks because that helped the business.

4. Obamacare won’t be as devastating as feared

That’s not to say the implementation will be a stroll, or that the record-keeping and financial burdens won’t prompt some creative cursing. But the long ramp-up gave chains an opportunity to prepare, and the wallop might have been over-estimated. The Cheesecake Factory expects no increase in coverage costs next year, and Chipotle Mexican Grill estimates the total expense at less than 1 percent of sales.

5. McDonald’s will get a new CEO

That’s not said with any glee or snickering. But investors are losing patience with current leadership, and trust isn’t running high. Executives brought financial analysts to headquarters recently for a detailed explanation of the current turnaround strategy. Afterward, BofA Merrill Lynch analyst Joe Buckley remarked to his clients, “There was little insight about near term plans to arrest what has become an alarming loss of market share in the U.S.” Meanwhile, Burger King, Wendy’s and Sonic are all enjoying significant sales improvements. Rumors were swirling at the time of this post that Bill Ackman, a heavily engaged investor who succeeded in the past in changing McDonald’s strategies, is about to get active again. The board will have to do something.

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