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MONDAY MINUTE: December 05, 2022

Domino's goes electric, Shake Shack's bullish on delivery and a billion guest sentiment data points.

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 www.learn.delivery for more bonus content.



Articles mentioned in the video:


Related Article: Yumbi






TRANSCRIPT:

Carl: Domino's drivers get cars. A billion guest sentiment data points, and why delivery will prevail. 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 caught our attention around the worlds of restaurants, off premise and technology that in some way connect back to our book Delivering the Digital Restaurant.


Are you ready? Let's go.


Meredith: Carl, the first one's for you about a company called Orda in Africa. They've received some significant seed funding and what caught your attention about what they're doing?


Carl: You know, Meredith, one of the things I love about what we do is the exposure we get to amazing things happening in restaurant tech, not just here in the US but around the world.


I'll answer your question about order in a second, when I was in Dubai a few weeks ago, I met a guy called Chris Sweidan, who's the CEO of Yumbi, which is a, a South African based 1PD platform that's helping restaurants in over six countries over there in Africa. And they've bootstrapped it from the very beginning.


They're nearly 10 years old and exploring growth into new markets. And when I saw this article about Orda, which for those of you that aren't aware - they're similar to what TOAST is offering, its US customers but in Africa. It really caught my attention because, Africa is about a 50 billion industry from a restaurant standpoint.


And they're focusing in on smaller restaurants, much like how Toast started. And really what they're trying to do is help restaurants move out of the pen and paper or occasional spreadsheet world and doing things such manual reconciliation, inventory management, processing orders, payments, and it's, it's great to be able to see how the world is moving along on this journey towards more technology because, everywhere in the world clearly is going to move in this direction sooner rather than later.


And much like we covered in the book where we talked about the maturity of markets and how some markets use the opportunity to skip the landline as such, that I wonder what opportunities are going to exist for African organizations that are helping restaurants as well. Now, one such example is they have to deal with internet downtime over in Africa quite considerably.


So they've had to build their functionality in such a way that enables it to be able to survive those time periods when perhaps the internet isn't working. But restaurant clients are still coming in wanting to eat and want to be able to use the systems. Similarly, a lot of these solutions just given the nature of the expense it takes to be able to set them up

probably have been set up in a very efficient manner. Certainly when I was speaking to Chris, he told me, bootstrapping an organization like this is quite considerable work. But that gives them potentially an advantage if indeed they were to expand into other markets where their cost base is that much lower and perhaps can price position themselves in a more effective way.


So, I saw this, I was excited by it. Africa's doing pretty well in the, in the World Cup and maybe the restaurant tech world needs to take a look over their shoulder and, and keep an eye them too. Okay. Second question, Meredith. Domino's always a big friend of ours here in the Delivering the Digital Restaurant world.

I hear their drivers are now moving away from mopeds to cars. What's going on here?


Meredith: Well, here in the US they're moving from cars to cars. But they are moving to electric cars. They're getting a fleet of 700 Chevy Bolts delivered to them. And they will use them all across the US. The biggest PR win for them here is being able to talk about the electrification of the fleet and doing something good for the environment as they're delivering all these pizzas.

But behind it also, you have Domino's providing cars to both corporate and franchise stores as a way of recruiting more drivers. They've been in the news for struggling to get enough drivers and they have famously stayed away from using the third parties, which would allow them to access on demand [00:04:00] drivers, so to speak.

And so this might give them potentially a leg up in recruiting people who otherwise don't have cars on their own to come drive for them or who think it's just more fun to be driving a brand new electric vehicle.

All right, Carl, the latest guest satisfaction data has been released by Tattle aggregated across their platform. Tell us what it says.


Carl: Well, we love this data. We talked about it about three or four months ago on the podcast, if you recall. As ever, Meredith, I would love to share my screen, if I may, just to show some of the, the imagery that we, we've got here because they have compiled a billion data points on these guest sentiments.

It's come across, I think, 200 restaurants, 9,000 different locations, and over the course of the, the last year or so, they've been able to give a reflection on what customers are saying about their guest satisfaction through different ordering channels.

Now, we last time talked about the way in which the delivery satisfaction had never been lower. The good news is, is that it's moved up. A percent, but look at it relative to all these other channels, Meredith dining takeout, curbside drive through delivery still remains at the bottom. Now, I guess if you were to draw a trend line across the bottom there, you could say, is it moving up slightly?

Which is, maybe a, a glass half full perspective there, but clearly against all these other channels it's not doing particularly well. And what is some of the, the kind of key reasons for that? Well, the most traumatic deterioration, as you can see here, is around value which isn't perhaps a, a huge surprise given the situation we're in with inflation.

But value often means more than just the price alone. It's how much people feel they're giving value for what they're having to pay out for. And of course, they're having to pay out more for food this year, and so therefore the value is certainly becoming something that becomes more front of mind. The other one that hasn't changed much is accuracy.

You'll see this dark blue line along the Boston remains a big challenge. One of the things I liked about this article, which we'll put the link for below from QSR is that they do talk about a few different ideas on how to actually try to manage this. And they, they talk to how Blaze, for example, are doing triple checks and they're trying to really make sure that their staff are as well trained as possible to address things.

Things like accuracy. What are some of your reflections as you, you see this data? Were you surprised by anything in particular..


Meredith: I think it's in keeping with what we talked about three months ago and not terribly surprising, the- off premise channels have a lower rating than dine-in, and in particular, delivery the worst because there's just so many people involved, right? There's the delivery company, the restaurant, the driver, so many parties. And as we say in the book when you hand the food off from the restaurant to a driver who's employed by no one, things can happen, right? So that's not terribly surprising to see.

I would say you can see the ClusterTruck sign behind me here on the wall. I'm in Indianapolis this week visiting my team at Empower Delivery, which we spun off of Cluster Truck. They are delivery only restaurant, and they have five- star reviews. So it is possible to do delivery while you just have to go about it in a totally different way than what the current system does.

So, love Alex Beltrani. Love that Tattle data. Thanks Alex and keep it coming.


Carl: Okay, so let's move on to our fourth question, Meredith. Sad news in many ways. DoorDash announced this week. Something I think Tony has said, their CEO to be the most difficult decision he's made during his tenure ceo, and that is cutting over 1200 people's roles from the company, 6% of their workforce.

What are your reflections on this?


Meredith: Oh my gosh, so many things. First of all, six. 1200 people, they have a lot of employees. . That was probably the first surprise. And of course, you know, the drivers are 1099, so it's not like they're laying off drivers. This is all corporate staff that are being let go.

And I I know, having been through these things, that is a very difficult thing to do, but I think it's a necessary decision for DoorDash and for all the other companies that are going through this. We've been in such a hyper growth phase, and in many ways these companies couldn't hire fast enough to keep up with the growth, and while delivery is still going strong and in fact still growing, It is not growing at the rate that it was, right?

And so now is the time to have the costs be more in line with the revenues. I mean, dare I say, even get to profitability. The market certainly responded well to this change. And they're not the only ones feeling this. Mark Lore's startup Wonder, which is the delivery situation that we talked about couple weeks ago that is cooking inside vans also laid off, I think 7% of its staff it was reported. One of the articles talking about it said they were actually even trying to sell some of the vans. So big change there. Big pivot going on. And I think they are obviously a little bit newer than DoorDash, so that probably reflects more of a pivot than it does exiting hyper growth mode. But there's just, an era that we're entering of responsibility and driving to profits and things that maybe not as relevant three, two, even one year ago as the startups were really chasing aggressively the changing consumer behavior.

Carl: It does seem to be one of a reflection also just the demands that the venture community put upon these companies, right?

You see these amazing companies with great valuations and it often is those that seem to be coming out with the news associated to their layoffs, and it's that balance is ever about how fast do you grow relative to the investment you're getting.


Meredith: So I know we're big believers in delivery but Shake Shack's CEO came out and agreed with us. He said delivery will prevail through a recession. Talk a little bit about why he thinks so.


Carl: Well, Lisa Jennings from Restaurant Business Online, I wrote this article Meredith, and the first line is brilliant, which is "don't underestimate the pull of the couch." And I love that. Think that's great. And of course, she's referencing Randy Garutti, the CEO of Shake Shack during a presentation at the the Eat Sleep Play Conference in New York.

Where he was saying, look, delivery is going to stand up to recessionary pressures. He says, customers are willing to pay for convenience. It's not like you're gonna see them canceling their Netflix subscription and things like that. And I, even though we are getting these challenging news articles about the way in which layouts are affecting a lot of folks.

I think what they're [Shake Shack] experiencing at least is continued growth. You know, they signed up with Uber Direct, which is the, the kind of DashPass equivalent, I believe in March of 2021.

And that order volume through the app increased 70%. Now perhaps you could argue Shake Shack point towards higher income customers based on their, they're offering and they have said that they have lost traffic from some of the lower income diners. So there, there clearly is a, a change that they're having to accommodate within that.

But I think the, the, the news, when you hear a CEO from a company as re, as renowned as Shake Shack, being so supportive of delivery and the fact that they have something like. 36% of their sales now coming through digital channels, it tells you that they certainly are putting their eggs in the delivery basket.

And I'm sure many other restaurant groups are doing much the same.

Okay, well look, that is it for this week. Meredith, it would be remiss if I didn't congratulate you and your two awards this week. A digital disruptor power player. Look at you. Go. Very impressive. Well on you. Um, I know.


Meredith: Well, good job on your award.

I, I, I don't know why I got two and you got one, but here we are. I'm excited. You have the boss picture. You,


Carl: have you, you have that boss picture. I, that's what it, that's what it's, I mean, it's dominating QSR's front page right now. So, uh, we


Meredith: need to we need to update your. Your headshot game, I think that's what

it is.


Well, congratulations again on that. Thanks again to Business Insider and to QSR for our recognition in that regard. And for those of you that have got any questions, any comments about this week's Monday Minute, would love to hear from you. We will be doing a special edition of Monday night in the weeks ahead because we're gonna look back on the 2022 predictions and have a, a thought about what's coming up in 2023 as well.

Keep tuned for that. But in the meantime, thanks for listening and we'll speak to you again soon.

The Monday minute is available for you to follow and subscribe wherever you listen to your podcast. Watch us on YouTube and follow us on all our social media Learn delivery channels. Thanks for listening.

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