Restaurant Industry News Roundup: September 2019
As colder weather approaches and menus across sectors change, make room on your palette for this month’s restaurant news roundup. Our soup today is full of global flavor with news about online food delivery. It pairs nicely with a helping of UK news. For your main course, we have selections including Grubhub’s rewards feature, Sweetgreen’s award, and the possibility of changing wage policies in Chicago. Welcome to the September 2019 Restaurant Industry News Roundup, we’ll seat you immediately!
The Soon-to-Be $200B Online Food Delivery Is Rapidly Changing The Global Food Industry
The online food delivery industry is set to increase to $200 billion by 2025. According to Frost & Sullivan, in 2018 the delivery industry was estimated to be at $82 billion by revenue bookings and is predicted to double or more by 2025, with a growth rate of 14%. The traditional dine-in restaurant business is feeling the effect of online food delivery. For example, Jamie Oliver notes online food delivery services as the main reason for the closure of his restaurant chain. Traditional restaurants face the challenge of combatting a consumer’s desire to eat meals in the comfort of their own home. Examining the global food industry, the United States has more than ten online food delivery companies. Asia makes up a 55% share of the world’s online food delivery market. China has registered a revenue of over $34 billion in online food delivery.
UK Restaurant Market Faces Fastest Decline in Seven Years
MCA’s 2019 UK Restaurant Management Market Report shows the UK restaurant market will decrease by 3.1% by the end of 2019. This drop marks the fastest decrease that’s occurred in seven years. Experts attribute the slump to the overall decline in sales and the volume of independent restaurants. A combination of an annual increase in cost, over-supply, and weak demand causes these attributions. On the other hand, pubs and fast food businesses are outperforming restaurants as they present lower-priced convenience options. Katherine Prowse, MCA Insight manager, compared 2019 to 2018. She noted that the difference is that “fewer consumers are eating out in restaurants, which results in an overall decline driven by independent operators.” Prowse suggests that targeting younger diners will continue to be an issue because they prefer home delivery, buy less alcohol, and order fewer courses.
Grubhub’s New Rewards Feature Integrated with Restaurant Loyalty Programs
Perks, a new in-app feature, allows customers ways to earn and redeem loyalty rewards from restaurants near them. Perks is a tab within the Grubhub app. The tab will enable diners to receive points and rewards through the delivery app, even if it’s not directly through the restaurant’s app. Red Lobster and Taco Bell Perks will initially use perks. Although there are many benefits from the program, questions surrounding what will happen with the data from the loyalty customers. However, restaurants are continually competing to drive more traffic and Perks through Grubhub could help with the push to encourage more guest traffic. Offering a loyalty program within the Grubhub app could incentivize guests to order delivery through the app. According to Grubhub Chief Product Officer Sam Hall, this “allows restaurants to promote their brands more aggressively through deals and special offers.”
Sweetgreen Named 2019 Tech Accelerator of the Year
When it comes to restaurant technology, Sweetgreen has been named the most innovative company with the 2019 Tech Accelerator of the Year award by Restaurant Business editors. Over the years, Sweetgreen has been increasingly tech-forward. They’ve developed software and used blockchain to increase transparency and security. Through its Outpost program, Sweetgreen has also focused on expanding its off-premise delivery strategy by providing specific pickup areas in various office buildings. Then employees can customize their orders through the app and then pick up their lunch to avoid delivery fees on both sides. VP of digital product and experience, Dan Beranek, states that Sweetgreen is “customer-obsessed” and that “drives everything they do.” They strive to remove friction from both customers and the Sweetgreen team.
Chicago Could Raise Tipped Restaurant Worker’s Wages
In Chicago, tipped workers make $6.40 an hour, and non-tipped workers make $13 an hour. This gap allows restauranteurs to put the tips towards filling the wage gap that’s $6.60 an hour. Changing the law would mean that tipped and non-tipped workers would have the same base wages. The proposed legislation would not get rid of tips and would affect all workers that work for tips. Still, the concern is that with the change in the system, it would be too expensive to pay their workers more. This correlates with continually rising real estate costs. Chicago hopes to follow the example of lawmakers of other states, including California, Alaska, and Oregon. Representatives have gathered this week to discuss the topic for the upcoming weeks.
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About the Author
Devyn Nance is the Marketing Coordinator at QSR Automations. She graduated from the University of Louisville with a bachelor’s degree in Communication and from Loyola University Chicago with a master’s degree in Global Strategic Communication. She considers herself an (amateur) profiler – trained solely from watching every episode of Criminal Minds. Outside of work, Devyn loves to shop, travel, hang out with friends and family, read, and watch shows on various streaming platforms.