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MONDAY MINUTE: August 01, 2022

Secret Menus, Instagram Maps & Restaurant Hiring Slowdown? All these headlines and more represent our thoughts and views on the world of restaurants, technology and off premise food in our round up of the last week’s hot news stories - subscribe today to the Monday Minute and register at for more bonus content.

Articles mentioned in the video:

4. Restaurants halting hiring because of inflation

5. Consumer sentiments on loyalty


Carl: Secret menus, Instagram maps and restaurants hiring slowing down? That's all ahead on this week's Monday Minute.

Monday minute works like this. We're going to ask each other five questions about headlines that have peaked our attention about the worlds of restaurants, off premise, and technology that in some way, tie back to our book, Delivering the Digital Restaurant. Are you ready? Let's go.

Meredith: Very first question is for you, Carl. And I know we have a little bit of personal bias here, so we'll try not to let it show too much, but some great news came out this week. In the midst of all this darkness in the VC world, Kitchen United has announced that they raised a hundred million in their series C. So tell us a little bit about what's happening here and why they're raising [00:01:00] money when everyone else is struggling.

Carl: There's a few things about this news that particularly caught my eye Meredith and firstly, it's the actual investors behind this raise.

So Kroger's RBI, Circle K, Simon Property Group. So what does that mean? One of the biggest grocery networks, one of the biggest restaurant groups, one of the biggest C store operators, and one of the biggest mall operators out there. So when you've got current partners, customers investing in your business, that's a great accolade and a real fantastic endorsement

I think in the progress that the team over at KU have made. Now, secondly I think this also shows how the KU approach has been quite methodical, quite thoughtful, and perhaps far less rambunctious than times gone by given the kind of timing of the announcement, as you say, because amidst the slew of layoffs in our space and just after the Kroger Dallas location opened, I think it gives great direction to other executive teams out there about the importance of focus at a time of economic uncertainty.

Last thing I'll say is. New channels, I think are a big, hot topic right now for ghost kitchens. And so we've, we've heard about Reef in, um, airports, but I think ghost kitchens are thinking about how to utilize existing infrastructure. You'll recall only a few weeks ago I was talking at the Convenience News summit over in Savannah, and I was saying to those C- store leaders that their kitchens are being underutilized.

And in many ways, having a ghost kitchen in a C- store is something that's been there all this time. And so I think the leaders over at Circle K agree, and are trying to utilize that in their partnership with Kitchen United. I think it's going to help them scale faster. KU currently has 15 locations; now aspires to get to 500 in the years ahead.

But you can see with partners and investments, like the ones announced here. They may well be onto a winning formula and there's a certain Peyton Manning who is putting his money in. Uh, and so perhaps the folks over at Kitchen United will be hoping their path to winning the equivalent of the SuperBowl in ghost kitchen terms is within their grasp.

Meredith: Two quotes really caught my eye in the slew of articles about [00:03:00] this. One CEO Michael Montegano saying "slow and steady wins the race." When was the last time you heard a startup in this crazy VC heyday of ridiculous valuations, say something like that? It's very telling of the approach that they're taking. And then the second quote that caught my eye was Atul Sood saying, "we test things and make sure they work and make sure that the units are profitable." That was certainly something that we were very focused on when we were there, Carl, and I'm glad to see that that's continuing and even more glad to see that it's paying off for the team. So nice work.

Carl: All right. So with that, uh, question two isn't perhaps as exciting. Delivery growth is slowing as consumers are watching their pennies

Meredith. Tell us about a couple of articles that caught your eye.

Meredith: In the Wall Street Journal, they were quoting one of our favorite sources, Yipit data, talking about what's going on with the third party platforms in particular ,Uber and DoorDash, which are showing their growth slow down tremendously, right?

They were growing 150, 180, 220%, you know, [00:04:00] during the pandemic really, really crazy growth rates. And now their year over year growth has settled into 10%. Now, 10% is still a very high growth rate and it's fantastic, but is a far cry from the old triple digit numbers that they were seeing.

Remember, this is all about S- curve adoption of behavior among the consumer. And so we had our, our early adopters and what happened in the pandemic is it pulled in adoption that probably would've happened eventually, but it happened much more quickly.

And now we are getting to that tail part of the adoption where adoption is really starting to slow down. And that means that you're going to see growth rates that are a little bit more normalized. Now, what was positive is it's not shrinking, so it's not like everyone started doing this during the pandemic, and now they go back to restaurants they've stopped. It is much more what we're describing about, you know, pulling that adoption ahead.

And then I couple this article together with another one from Full Service Restaurant Magazine. They were looking at a report put out by [00:05:00] NPD Group that said that Gen Z eats at restaurants, whether they're there physically or getting delivery from them, has visits to restaurants 30% lower than what Gen X did at the same stage of life. So when Gen X was 22, How often were they going to restaurants? A lot more. For Gen Z to be pulling back and slowing that down, I think tells you that they are starting to think about maybe it isn't just all about ease and convenience and getting this delivery. Maybe there's some other things we need to take into account, particularly in light of inflation. And that might be the quality of the food, the price of the food. Very interesting stuff.

Carl, next one is for you. I love this one. Personally, just knowing how I use Google to see Instagram do this, I think is so brilliant. Instagram searchable maps. What are those?

Carl: Yeah. This one, came out after our last Monday Minute episode. So it's not necessarily the latest news, but Mark Zuckerberg, CEO of [00:06:00] Meta, announced that Instagram is introducing a searchable and dynamic map that will allow users to explore locations around them.

And that means: filter in restaurants, certain hashtags. Uh, and let me do this Meredith, let me bring this up here. Cause I think this really is a good representation. So you can see that in this example of the Little Lemon, they are actually appearing as a photo on an actual map here. And it's a great way of being out just to tie the user experience to an actual location so that people know that restaurants near them are actually available.

So it's a, it's actually a searchable feature that I think's pretty exciting. Now, it's important because, I'm always talking about frictionless customer experience. And as we know, customers are on their phones, five, six hours a day. And so let's think through that thought process for a moment to order in food, some think I'm hungry and they go to a marketplace or they go onto the restaurant's own channel.

Others think I'm going to zone out and I'm going to go onto Instagram for a while. And then in that moment, they may see food now [00:07:00] within that same app, they can now see that food and they can find that food more easily without switching apps and thereby reducing the time it takes to find that same restaurant in a marketplace.

It reduces the time the guest has to get to an ordering decision. And so the benefit of this is that it's introducing new customers to your offering. It shows what is close by for eating or picking up from, and it's a chance for you as a restaurant to direct customers to your own direct ordering channel.

So it's another great means to move customers towards ordering directly from you versus the third parties. And of course, the third parties are great for when you don't know what you want and want to see that variety. When you're looking through this map, though, that same desire is being achieved, but also the proximity factors there too, which helps with the speed of fulfillment.

Right? So with a few other things here. Notice the importance of photography. Yeah. That photo I showed you there that's when a location is tagged onto the post or onto the story. So it's important that you're actually thinking about tagging locations, but also the quality of the photo that you're putting up.

And then another thought, think about incentivizing your guests to do the same. [00:08:00] I was at Pitfire Pizza earlier this week, took some nice photos and they posted my story a few hours later. And that of course is then going to drive others in my current network to learn about the restaurant, therefore giving free social proofing.

So where your, restaurant is being endorsed by, by others. And then thanking those guests for that post, perhaps even providing some form of incentive for them to come back within a certain timeframe, that could be a winning formula to try.

So, yeah, well done Meta. I think this is a good one. I think there are some usability areas to tweak, but I think it's a step in the right direction.

Meredith: First of all, I have two comments here. Number one, Carl, you went to Pit Fire without me. What gives? And number two I think this is an opportunity for brands to fight back.

So we often compare DoorDash and Uber Eats as searchable platforms, very similar to Amazon. And when you shop on Amazon, you care about three things, right? What do you care about? You care about the price, how quickly does it get to me and the ratings of other customers. And you're very unconcerned about the fact that it's a made up, [00:09:00] misspelled brand name that you've never heard about before. Right. DoorDash and Uber Eats are a little bit similar in that way. You might consider ordering from a brand you've never heard of, never tried before, or maybe even one that is a brand new virtual brand because it has great ratings, and it gets to you quickly and it's a good price, right? But this Instagram feature allows brands to fight back by giving a different and more engaging way for brands to talk to consumers about who they are and what they offer and about the experience that they have, but still in that localized way.

So I, I think it's really cool. I'm very excited to see what restaurants do with it.

Carl: Yeah, me too. Okay. Question four this week this is a weird one. Restaurants are halting hiring? What on earth is going on Meredith. What's driving this?

Meredith: I thought we had a labor shortage. But inflation is really starting to get real. Step one in inflation, is we all notice the numbers are going up. Step two in inflation is that the Fed starts to encourage us to behave differently. Step three in inflation is that we do in fact [00:10:00] behave differently. And hopefully eventually it starts to come down. And the phase that we're in right now is that we're all starting to behave differently.

Walmart said that they were starting to see pressure in consumer demand. They were starting to do discounting to bring consumers in, but at the same time, they were still seeing inflation from their wholesalers. So they were getting pinched there on margins.

Restaurants are starting to say, oh, this is getting real. I can't necessarily afford to pay people this much. I'm going to hire fewer people or potentially even lay some people off, which there have been some cases of that. So this is where Fed policy starts to turn into real action among humans. And we are all starting to behave differently and as we behave differently, hopefully eventually that causes inflation to come back down. But it is starting to hit our pocketbooks.

Last question. There's a new consumer sentiment study out, Carl. Tell us about what's in the study.

Carl: I'm going to do, like you did for question two, I'm going to do a two for one on this last story. Meredith. QSR did an article, um, on a report that was issued by Near a data analytics provider on guest sentiment changes, pre and post pandemic.

Uh, and I think it covered just over about 500 respondents or so, and I'll include the link to the wider report, but I wanted to focus in on one specific area of it that I thought was worth pointing out. And it's all around the subject of loyalty. So, why does a customer select a loyalty program was one of the questions and, the following factors were given as options. And they could select as many options as they wanted. And 60% of them said it's because they eat there frequently, which is good, right? That's a representation of your most loyal customers. However, 50% said they have good rewards for participating.

And 23% said they got a discount or bonus for signing up. Now, the first category represents loyalty and the other two may promote loyalty or more frequent visits, but they don't necessarily reflect loyal guests. And then the survey continues and it asked [00:12:00] how many loyalty programs does a guest participate in?

Now, I hadn't seen this kind of data before. And so I'm curious to see whether you are surprised by this as well, but the overwhelming response was 48% of people said "two to three loyalty programs". And then the next one after that was "just one" and that was 26%. So that's worth pondering over for just a moment, because that tells you that yes, you need to have a loyalty program, but you also need to have a loyalty program that is compelling in comparison to all the others out there.

If you've only got the opportunity of being part of "2 to 3", So the report didn't explore that much further, but the trifecta, that we talk about of loyalty, digital ordering payments is a clear means to ensure your guests have a digital relationship with you in some way, some may be more loyal than others, but having that digital relationship is important

so that guests can engage with you through their phone in some way. And of course you are getting that customer information as well on your terms. The trick of course, is giving them compelling reasons to return and visit more frequently, which comes then to the other article I mentioned. And that was a [00:13:00] shout out to Velvet Taco's who this week introduced a secret menu, which features certain items not available anywhere else, other than through their app or their direct ordering channel.

That's brilliant. I think that's great. It's not reducing margins, it's creating exclusivity, it's driving behavior and that kind of fear of missing out if you will, and curiosity on the guest's end. So it's no surprise to us, I guess, to hear that the team at Thanx are behind it, as it's one of the things that they talk about so much and that discounting doesn't necessarily drive loyal behavior. So, um, yeah. Interesting stuff, that one.

Meredith: That is a fascinating statistic of just two to three programs. I would suspect that many consumers are not aware of how many they're in. They don't think necessarily of it as a loyalty program, because loyalty has become so intertwined in how we order. You automatically get your points for using a certain credit card or you automatically get your points for ordering within the app.

You don't think of it as like, oh, I carry this punch card in my wallet. It's not the same as the old days. So I'm guessing people are massively underestimating how many they are participating in.

Carl: How many, how do you participate in?

Meredith: Well, that's just it. I couldn't even tell you. I would really have to think through oh, that one's inside of that app and that one I'm signed up for separately. I would have to think about it to come up with the number.

Carl: And probably a separate email address. Don't you, you use a separate email address and so you don't get spammed. I get, I know how you work.

All righty. Well, look, we've gone on a little bit this week. My goodness. Hopefully this has been of interest for everyone. Thank you as always for listening. Please leave your questions, your comments below, and if you have any particular articles that you think we should feature on our next Monday Minute, please send them on.

But until next time, thanks for listening.

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