Study: Restaurants offering trends that consumers don't want

June 6, 2017

Mobile ordering, delivery services and the influence of social media have obviously changed the way consumers interact with restaurants, but there may be a disconnect between what customers actually want and what restaurants are offering.

An American Express survey, which polled nearly 500 restaurant operators and 1,000 consumers, found that although 63 percent of customers would like to continue being able to tip servers, 29 percent of restaurants either already had a no-tipping policy or were considering adding one.

Other key findings include:

  • 57 percent of customers do not like the idea of communal seating, yet half the restaurants either currently offer or are planning/considering adopting.
  • Although many chefs are rethinking what they throw away, barely one-quarter of customers would be likely (27 percent very/somewhat) to order a meal made entirely of excess food and leftover ingredients that might have otherwise been discarded or wasted.

Tech at the table: Keeping the human touch in a digital world 
Restaurants are increasingly turning to digital technology to enhance customers' dining experiences. About 7 percent of restaurant owners/managers use automated customer service technology such as digital kiosks or table-side ordering, and that trend is expected to grow; 26 percent said they plan to or are considering adopting this technology in the future.

While the majority of consumers (75 percent) favor a restaurant with traditional wait staff who can provide in-person service, 25 percent said they prefer restaurants with digital customer service platforms. That percentage is even higher for millennials (39 percent).

"This disparity shows that restaurants should strongly consider their target customer base or pairing traditional customer services with the convenience of technology at the table when deciding how to augment their approach to servicing with technology," according to the survey.

Take-out tech to grow
Millennial consumers are more likely than any other generations to order take-out using a mobile app or website, according to the survey. For example, millennials were twice as likely (62 percent) as Baby Boomers (28 percent) to have used a restaurant's mobile app or website to order take-out in the past month. When it comes to ordering and delivery services like Grubhub and Seamless, millennials are significantly more likely (58 percent) to have used such a service than Gen-Xers (35 percent) or Baby Boomers (21percent). Restaurant operators are taking notice.

Twenty-four percent of restaurateurs use an online ordering and delivery platform like Grubhub or Seamless, and another 31 percent said they are planning to or are considering adopting such services. Additionally, 24 percent of restaurateurs are already offering the ability to order ahead through their own websites or mobile apps, and another 42 percent plan to or are considering adopting the technology.

To tip or not
Consumers' tipping practices and preferences also differ by generation. In recent years, some restaurateurs have discouraged tipping or adopted policies that do away with the practice in their establishments, usually in favor of higher wages for the servers. According to the survey, 15 percent of restaurants have already adopted or plan to adopt a no-tipping policy, and 14 percent said they might eliminate tipping if their competitors do.

At the same time, the majority of consumers (63 percent) said they prefer being able to tip their server. However, when broken down by generational groups, preferences differed. Millennials are the generation most likely to prefer not to continue tipping (46 percent) compared to Gen-Xers (34 percent) and Baby Boomers (32percent). However, Millennials were more likely (18 percent) to support having a service charge added to their bills in lieu of a tip than Gen-Xers (8 percent) or Baby Boomers (6 percent). Additionally, when paying with a credit or charge card, the majority of customers (59 percent) will add the tip to their card. Millennials, however, are more likely to leave a cash tip when paying with a credit or charge card (46 percent) than Gen-Xers (36 percent) or Baby Boomers (36 percent).

Investing in tech and hiring staff
Overall, restaurant operators are generally positive about the future. More than half (54 percent) said revenues are greater than they were one year ago, and nearly three-quarters (72 percent) are expecting a continued increase during the next 12 months. Part of this optimism is reflected in planned technology investments — two-thirds (65 percent) have plans for tech investments in the next 12 months — as well as hiring — more than eight out of 10 plan to hire both front- and back-of-house staff in the next year (83 percent, each)

Innovations are being planned to stay competitive as well, particularly in restaurants' ability to combat food waste and make better use of local ingredients:

  • Half of restaurant owners/managers believe food waste has a significant impact (48 percent very/somewhat) on their restaurant's profitability, and most are taking some measures for reducing it.
  • 38 percent of restaurateurs are repurposing ingredients or offering special menu items made with excess food.
  • 61 percent evaluate inventory, 59 percent train staff on waste reduction and over half monitor the portion sizes they provide to their customers to reduce waste.
  • When it comes to locally sourced ingredients, 44 percent of restaurants currently use them

Diners agree. More than half of consumers (56 percent) believe that it is important for a restaurant to use locally sourced ingredients in their menu. Like restaurant owners, they too don't want to see their food go to waste. The vast majority of diners (83 percent) said they ask to have their leftover food wrapped. For some, making leftovers their actual in-restaurant meal is not off the table — 27 percent percent of consumers are likely to order a meal made from leftover ingredients. When focusing on generational groups, millennials are more likely to embrace this concept (39 percent) than Gen-Xers (24 percent) and Baby Boomers (19 percent).

 


Topics: Operations Management

Companies: American Express


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