In this Weekly Wrap, we’re looking at the trend toward weekend dining, the success of Starbucks’ Shift Marketplace tool, the shortcomings of the No Tax on Tips legislation, and more.
The Headline: “Why dashboard dining and weekend restaurant visits are on the rise”
The Source: Restaurant Dive
What You Need to Know:
The trend toward weekend dining stretches across dayparts and sectors. Consumers are visiting restaurants for weekend breakfast, lunch and brunch, particularly at full-service establishments, said Britany Robinson, a senior manager of consumer research at Technomic.
Weekend share grew most dramatically for breakfast, though all dayparts saw similar shifts. Robinson said consumers’ preference for weekend dining is likely motivated by time pressure in other parts of the week.
“That’s when people have time to slow down, right? You can take in that experience that full service offers,” Robinson said. “Consumers are essentially saving up those weekday occasions so that they could splurge on the weekend.”
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In addition to changing when they’re eating, consumers also are changing where they’re eating, said Robert Byrne, senior director of consumer research for Technomic. Two locations have seen particular growth as dining spaces in recent years: on-premise and in-car.
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Because of the recovery of on-premise dining, off-premise checks may no longer be larger than on-premise checks, when controlling for the size of catering orders, Byrne said.
“If you look at median check for off-premise, it’s in decline. And the look and the feel of off-premise is the reason for that,” Byrne said.
The growth of solo dashboard dining is one reason for the decline of off-premise check. First, Byrne said, the nature of off-premise occasions is changing — consumers are opting for solo off-premise experiences to satisfy particular cravings rather than full meals.
Our Take:
This tracks with what we are hearing from other operators. Weekends, even more so than usual, have been far busier than the weekdays, with the exception being big city business districts. This is significant because weekends have always been peak times for restaurants. The expanding rift between weekend and weekday traffic is concerning but expected.
People still want to go out and be around others, but with economic uncertainty, they're saving their dining out for larger weekend visits. It's not what operators want to hear, but it's the current reality. Some operators have been focusing their marketing/social media efforts on driving early-week traffic through limited-time offers (LTOs) and special events or promotions.
I like the idea of LTOs or weekly weekday features; however, I’m always hesitant with offers, especially if they involve steep discounts. I've watched many an operator offer too many discounted deals, only to find that the frequency of these discounts became the expectation, and business didn't shift to the hours that needed it. I'm not against discounts; they just need to be done thoughtfully.
The Headline: “How Starbucks’ new people-first technology helped fill 500,000 shifts”
The Source: Nation’s Restaurant News
What You Need to Know:
As Starbucks looks to address store-level staffing challenges, CEO Brian Niccol has made it clear that the company is taking a people-first approach rather than leaning on new equipment to fix scheduling issues. That’s why the company paused the rollout of the Siren Craft automation system, which was introduced by Niccol’s predecessors.
Instead, Starbucks is focusing on bolstering its stores with the right number of baristas per shift using the Shift Marketplace tool. This staffing tool was originally launched in 2021 and received a major upgrade in February that allows baristas to post and swap shifts on a first-come, first-serve basis from outside of their “home store,” but still within their district.
Now, NRN has learned, more than 20,000 shifts are claimed weekly via this new Starbucks staffing tool, with almost half of these shift swaps coming from baristas trading outside of their home store. The company claims to have filled more than 500,000 shifts in the second quarter that would have otherwise gone unfilled, which helps to mitigate issues of understaffing and wait times during peak hours by “increasing the pool of partners by tenfold.”
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While this technology is not AI or machine learning-based, it could have the potential to evolve in the future. Baristas can access Shift Marketplace via a mobile app or using their home web browser and choose to receive push notifications to get alerts when new shifts in their district are posted, or they can turn that feature off.
Currently, almost two-thirds of Starbucks baristas are using Shift Marketplace, with just under half of baristas taking advantage of the new district-level shift-borrowing feature.
Our Take:
This technology addresses the most challenging issue in the restaurant industry: staffing. Since the pandemic, staffing has been a chronic problem for both large and small operators. Starbucks' willingness to adopt this program is impressive and is a great example of innovating to solve a lingering issue.
For fast-casual and QSR chains, a system like this is a game-changer. Allowing employees the ability to pick up shifts at different locations is a win-win for the business and the worker. Yes, the labor crunch persists, but contrary to what many will say, there are still people eager for more hours. This approach allows them that opportunity. The key word is allows — the choice is in the hands of the employee.
In the past, some operators have forced staff to split time between locations, which rarely benefits the employee. It could mean longer commutes, perhaps to a location that’s more difficult to access by public transit. This model negates that, letting workers choose based on their needs.
Yes, there are potential pitfalls. Employees are often not as proficient in a space they aren't familiar with, no matter how similar the layout. They may also not have the same rapport or familiarity with the regulars.
Does it translate to sit down restaurants? Potentially, but it’s a little more challenging as familiarity with the space becomes even more important in a full service environment. Additionally, many sit down restaurants work on separate LLC’s for liability purposes, which requires onboarding at every new location, which could be burdensome. That’s not to say it’s not possible, it’s just more challenging. It’s realistic that some of the larger chains could pull this off, but less feasible for smaller multi-unit operators.
The Headline: “Independent Restaurant Coalition urges Congress to revise ‘No Tax on Tips’ legislation”
The Source: Nation’s Restaurant News
What You Need to Know:
After the Senate and U.S. House of Representatives passed similar bills establishing a tax deduction for tipped employees like restaurant servers, a group of restaurant operators is asking Congress to broaden the bill to include back-of-house workers like kitchen staff.
If signed into law, the No Tax on Tips Act would establish a new tax deduction of up to $25,000 a year for employees who typically receive cash tips and earn $160,000 a year or less. This limit would be adjusted annually for inflation.
More than 400 operators — led by the Independent Restaurant Coalition — sent a letter to Congress arguing that as more operators "shift to service charges as a more stable, balanced compensation model," excluding other "essential staff" from this bill would "penalize independent restaurants" in the long run.
“As written, the No Tax on Tips provision in the budget would leave behind dishwashers, chefs, porters, and other workers who will still be taxed on their wages,” the letter states. “The proposed tax exemption for tips will ultimately do more harm than good to the over 11 million people who rely on restaurants and bars for their livelihood, and at a time when they can least afford it.”
Our Take:
Back-of-house (BOH) employees generally make far less than their guest-facing counterparts. There’s a constant disparity and rift that exists between the two, and I’ve seen many restaurateurs battle the BOH/FOH divide. There has been progress, but it still lingers. Front-of-house has the glamour (if you can call it that): they sell the wine, pitch the food, joke with guests, and, most importantly, make tips. Yes, in some states they make less hourly, but the vast majority of the time, those tips push their earnings far beyond what most BOH employees make.
So what better way to bridge the gap than…giving the highest hourly earners in the restaurant industry a tax break?? It’s not that they don’t deserve it, but anyone in this business knows that the BOH is the least paid, most overlooked group, and, frankly, the one that could use a tax break the most.
It’s mind-boggling to me that this legislation would ignore the people who stand to benefit most from it. Personally, I’m not a fan of this bill — it solves no real problems, offers minimal relief for employees or employers, and, in the end, only further marginalizes the most underappreciated group in the industry.