Restaurant Industry Roundup: December 2019
New year, new roundup! How did the decade end when it came to restaurant industry news? Countdowns were abundant, and we identified trends with care. For an extra holiday treat, we’re baking fun international facts that are sure to tickle your fancy. As we enter the season of new year resolutions, let’s take one last look at 2019. We have several orders of nostalgia and reflection coming right up!
How a White Lie Gave Japan KFC for Christmas
If you’ve never heard of “Party Barrels,” they include dishes like shrimp gratin and triple-berry tiramisu cake. For Christmas, as they have every year since 1970, families in Japan will order these “Party Barrels” weeks in advance and contribute to a third of KFC’s annual income. It’s also a long-standing tradition. How did it start? With a marketing campaign that gave Japanese citizens an alternative to the Christmas turkey. KFC Japan’s first manager, Takeshi Okawara, visited elementary schools dressed as Santa and promoted fried chicken as the Christmas turkey substitute. KFC, Japan was on the verge of failure. Eventually, the promotion became “Kentucky for Christmas” and has become a holiday tradition. Now, fried chicken brings families together in Japan for the holidays.
Optimism in The Hospitality Industry at 18-Month High
Even with the uncertainty surrounding Brexit, optimism in the market of eating and drinking-out has reached its highest point in 18 months, according to the Business Confidence survey from CGA and Fourth. There’s an increase of optimism up with 64% of restaurant leaders reporting confidence in their future. Fourth Chief Operations Officer Simon Boca points out the “three p’s” that are a priority for restaurant leaders: people, profit, and politics. There are still skeptics concerning the short-term expectations in business; Fifty-three percent of restauranteurs think consumers will dine out less often in the first six months of 2020. While 25% anticipate average spend increasing. Challenges that restaurants are expecting to face are rising food costs, higher wage costs, and property bills.
2020’s Top 10 Restaurant Marketing Insights
RetailMeNot’s most recent industry studied how diners are influenced when it comes to dining outside of their homes. What are the top 10 dining and restaurant insights for the upcoming year?
- Budget, deals, and peer recommendations are the top three motivators of consumer dining decisions.
- Americans have crossed categories in their dining patterns in the past month like fast food, casual dining, delivery, and fast-casual.
- Brands can drive consumer frequency through deals and offers.
- Consumers are more open to brand switching, especially for deals.
- Diners look for deals mostly through emails, apps, and websites.
- Diners are more likely to download apps and opt-in for emails for BOGO deals.
- Generationally, millennials are more likely to be influenced by digital restaurant content, followed by Gen. X, Gen. Z, and Baby Boomers.
- Even after having a bad experience, offering a deal will encourage customers to return to the restaurant.
- Food trends have little to no impact on where diners eat.
- Holidays present more opportunities for restaurants to drive sales and make more money.
Farm to Table? More Like Ghost Kitchen to Sofa
Did you know New York City is the country’s largest market for food delivery? It is, and demand is steadily increasing. Ghost kitchens (sometimes called “dark kitchens“) have become a means for investors to make more money in 2020 and will continue to multiply. Ghost kitchens are food establishments that provide meals that can be purchased solely through a delivery app and are usually extensions of existing restaurants or new brands. They’re profitable because multiple ghost kitchens can be in the same physical kitchen, and they would share ingredients, cooking staff, and equipment. These establishments have become so popular in New York because consumers have the option to “go brave the streets” of New York City, or order delivery and stay home, according to Chief Executive Chef of Kitchen United, Jim Collins. Ghost kitchens are also popping up across Europe and along the West Coast.
Many predict those ghost kitchens will increase across New York. There are some concerns and questions, but ghost kitchens will continue to appear throughout the next decade.
Food Delivery Now So Popular that Some Restaurants Will Pay you to Dine In
If it’s not obvious, we live in a society that demands convenience. Deliveries account for about 60 percent of restaurant traffic. How can restauranteurs combat this ever-rising trend? Apps that incentivize diners visiting and dining in at restaurants outside of peak hours. These apps, including Seated and OpenTable, give customers an incentive to dine in at restaurants with rewards like getting 40 percent off a bill. The rewards diners can get depend on the app. OpenTable gives user points that can turn into discounts for the next visit. Craved offers guests an actual discount, and Seated allows diners to use points that they can use at other brands, like Amazon and Delta.
Are these tactics helping restaurants in the long run? In the article, a senior editor at Eater NY, Stephanie Tuder, identifies the goal to get people in the door from the deal, have the customer like the restaurant and then return to that the restaurant later to enjoy the food at regular prices. It’s not entirely clear if customers are returning to the restaurant without the deal because most people tend only to want the deals. It’ll be interesting to see how restaurants use rewards through apps to get more off-peak restaurant traffic in the years to come.
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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.