5 big ideas from the NRA Show

Not all restaurant innovations come in the form of new equipment or food items, though both abounded at this year’s National Restaurant Association convention in Chicago. The most arresting breakthroughs might have been the offbeat ideas that were aired as remedies for common miseries, from loan-shark-scale delivery fees to sagging traffic.

Here were some of the most intriguing.

Attendees all but muttered the question as they ambled down the aisles in the conventional hall: “How am I supposed to make any money if I deliver through a third party?” The fees typically run as high as 30% of a transaction, leaving little profit for the restaurant, even if the deliverers do absorb credit card processing fees.

A novel solution was put forth by Monique Yeager, CMO for the Tijuana Flats fast-casual chain: coming together to hammer down the charges.

“We all need to work on this together as a community of restaurants,” Yeager suggested during the daylong Innovations in Fast Casual & Pizza Summit at the conference. She appeared to be suggesting that delivery specialists would moderate their fees if everyone pushed back.

Yeager also raised the possibility of sharing the pain with customers. “If you charge a little bit more for it, people will pay—research has shown that they will,” she said.

A fundamental problem with restaurants’ mode of operation is charging on a meal-by-meal basis at the time the food is consumed, suggested Hudson Riehle, SVP of research and knowledge for the National Restaurant Association. Customers have been conditioned to calculate each expenditure and vote go or no-go right then, he explained.

A better approach sales-wise, he suggested at the Innovations Summit, would be charging customers a lump sum upfront and having them work off that balance—in essence, a meal subscription service.

Indeed, that arrangement may catch hold in the restaurant industry because so many consumers were exposed to similar setups through their college meal plans. “That will transport over to the commercial market,” he predicted.

It isn’t a wild prognostication. Research shows that two out of five consumers would be willing to pay ahead for a meal subscription program, Riehle noted.

Another beneficial change in restaurants’ core business model would be a break from the tradition of setting fixed prices. Just like airlines, restaurants could adjust what they charge to match shifts in demand, suggested Riehle.

Larry Reinstein, a fast-casual consultant who led a panel at the Summit, was even more bullish. He noted that airlines and hotels have taught consumers the principle of dynamic pricing. They’re familiar with prices changing from day to day or even from hour to hour, and no longer protest.

“It’s not a question of if the same thing will happen with restaurants; it’s a question of when,” he said.

Among the more than 20 employment assistance programs used by the Passport Pizza fast-casual chain is an initiative intended to help people leaving prison get a real shot at a new life.

“They’re great employees because they’ve gone through hell,” said Sue LaTour, president of the Michigan brand, which routinely gives ex-prisoners a try.

If any concerns or problems should arise, the company can reach out to the hire’s probation officer. Meanwhile, the employee is often viewing the job as “a chance to prove themselves,” so enthusiasm is not a problem, said LaTour.

And then there’s the icing on the cake: “You get $4,500 for hiring them, but you also get tax incentives,” LaTour noted.

Consumers’ drift away from big-brand fountain sodas could be an opportunity as much as damper on profits, suggested Darren Tristano, chief insights officer for Winsight, the parent of Technomic and Restaurant Business.

He noted how fast-casual players like Sweetgreen are finding great success with house-mixed, one-of-a-kind waters, teas and other upscale libations. “This is a good way to move beyond the fountain into more expensive options, to raise the price point, to give customers what they’re looking for,” he said, adding that higher priced-beverage options are a becoming a significant trend for fast casuals.