In this Weekly Wrap, we’re looking at the latest restaurant-rating app catching on with Gen Z, Olive Garden’s smaller portions, McDonald’s taking on the tip credit, and more.
Beli Over Yelp (At Least with the Kids These Days)
The Headline: “How Beli Ate Yelp”
The Source: The New York Times
What You Need to Know:
Beli has steadily attracted younger diners since its release in 2021, convincing many of them to start rating restaurants for the first time. The company says roughly 80 percent of its users are under the age of 35.
On Yelp, the most prominent reviewing platform of the last two decades, only 24 percent of U.S. users are between the ages of 18 and 34, according to comScore, a market analytics company.
“No one in my generation writes on Yelp,”
Members of Gen Z visit more restaurants more frequently than any other age group, and many of them are scoring their experiences and planning their next meal on Beli. The app, which first gained popularity in New York, can be used to rate restaurants anywhere in the world, with more than 10 percent of its users living outside the United States.
In just four years, the number of restaurant reviews on the app has quickly closed the gap with those on Yelp. As of September, users have logged more than 75 million restaurant ratings on Beli. From 2021 through 2024, users of Yelp logged 83.6 million reviews of all kinds of businesses, not just restaurants, according to the platform’s annual trust and safety reports. (Beli claims millions of users, but declined to provide specifics. Yelp said an average of 29 million devices used its service each month last year.)
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The app has become a haven for diners who have lost faith in the starred review systems of other platforms. Mr. Cardona-Lopez, who lives in Williamsburg, Brooklyn, and works in finance, associates the reviews on Yelp and Google with complaints: one- or two-star reviews about loud music, scarce reservations or even a restaurant’s politics. Ratings on Beli, he said, are more trustworthy. “Beli is a food review app for people who love restaurants,” he said. “Their tastes are far more aligned.”
Our Take:
Beli is still pretty new — it’s only in the past six months that I’ve started hearing other operators mention it.
I don’t hide my distaste for Yelp and the whole “Elite Yelper” crowd, but I can’t say the same yet for Beli. Then again, I haven’t had the personal joy of reading a Beli review that complains about a dish we don’t (and never have) carried, or the inevitable one-star for a steakhouse that doesn’t have enough vegan options. Trust me, it’s only a matter of time.
From our current vantage point, the jury’s still out. At one point Yelp was seen as a relief for operators, now it’s hard to find an operator who doesn’t despise it. I’m curious how this plays out: is Beli just Yelp 2.0? An elitist app for hot spots in major cities? Or something new entirely that defines the next wave of amateur food critics?
We’ll see. But one thing’s certain, it’s time for everyone to start setting their alerts for Beli reviews.
Olive Garden Cutting Size and Price
The Headline: “Olive Garden sees success with smaller, cheaper portions as diners try to save money”
The Source: Market Watch
What You Need to Know:
Speaking during a conference call to discuss Darden’s first-quarter results Thursday, Chief Executive Rick Cardenas explained that Olive Garden is testing a “lighter portion” section of its menu, featuring seven existing entrees with reduced portions and lower prices. The restaurant chain is offering the smaller meals, which are being tested at 40% of its locations, at dinner and all day on weekends, and they come with Olive Garden’s first course of unlimited bread sticks as well as unlimited soup or salad.
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Cardenas explained that the move is “strengthening affordability” at Olive Garden. “There’s still abundant portion sizes, but it also adds price breadth to the menu,” he said. Consumer response to the smaller portions has been encouraging, according to Cardenas, who noted that they were launched without any fanfare.
The smaller-portion meals are expected to boost foot traffic to the restaurant chain. “We do believe, in the long run, this is a traffic driver,” Cardenas said. He acknowledged that if people trade from a larger-portion item to a smaller-portion one, it will impact check size. “But we believe that’s the portion that those guests want,” he added.
Darden — which is also the parent of the LongHorn Steakhouse chain and more upscale “fine-dining” restaurants including Capital Grille, Ruth’s Chris Steak House and Eddie V’s — said the smaller portions are just an additional option for Olive Garden customers and are not replacing any items on the restaurant’s menu.
Our Take:
It’s a risk, but it tracks with what we’re seeing in this economy. Value is the name of the game, though this feels a little different from tactics we’ve seen before. In the past, value often meant larger portions at the same price. This move sits somewhere between that and the shrinkflation craze a few years back, which was definitely not a value proposition.
The challenge is how it impacts the check average. If too many guests opt for the smaller portions, overall spend could dip — not great. But if it pulls in more value-minded consumers, total sales could rise. It’s a big swing, and if results don’t come fast enough, shareholders won’t be quiet about it.
Generally, I like big swings, and I think this is a smart one — for now. Operators might be able to borrow the idea depending on their menu and portion flexibility. But with commodities like beef and inflation still being huge question marks, it’s risky for smaller or single-unit operators. If it doesn’t drive the traffic, they could get squeezed on both the top and bottom line.
Politics in the Workplace
The Headline: “Starbucks faces backlash from union after barista refuses to write ‘Charlie Kirk’ on cup”
The Source: Nation’s Restaurant News
What You Need to Know:
Starbucks might have accidentally wandered into the heated discourse following the death of right-wing political activist, Charlie Kirk. On Tuesday, a woman posted a TikTok video of her trying to order the late Kirk’s preferred Starbucks drink (Mint Majesty tea with two honeys) under his name at a café in Yucaipa, Calif. In the video, the Starbucks barista declined to write the name on the cup, saying, “We don’t do political names.”
In the caption of the video, which has since amassed more than 40,000 likes and nearly 8,000 comments, the user wrote, “Today my husband walked into this Starbucks to order Charlie Kirk's drink, when they asked for his name, he said ‘Charlie Kirk,’ she said, ‘Pick another name.’ He asked why, and she said, ‘We don't do politics here.’” In the video, the woman got a similar response when she tried to repeat the request with her own order.
Most of the top comments defended the barista’s decision, like “She’s just trying to do her job,” “Leave the poor girl alone,” and “The barista handled this professionally.”
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Starbucks Workers United — which represents baristas at more than 600 Starbucks cafes — has pushed back on this response, claiming in a social media statement that, “the company is lying about their own policy by suggesting that there aren’t restrictions against pop culture or political writing.” The union demanded that the company set the record straight about the cup-writing policy, close stores temporarily if baristas are threatened or doxed, and end mandatory writing on cups.
Nation’s Restaurant News saw a copy of Starbucks’ official policy for writing content on cups, which states that, “partners should not write or print content on items that advocates for a political, religious, or personal issue, even if requested by a customer.”
Our Take:
Honestly, I hate this discourse.
I fully endorse everyone’s right to free speech, and for businesses to establish policies that are within the rule of law. But I also support a business’s right not to be forced into politics or rhetoric.
It’s clear the customer was making a political statement. I don’t know their intentions, but I think we can all agree what their point was. The business had a policy on political statements, and the staff saw this as falling under that. The customer should’ve left it at that. If the shoe were on the other foot, and it was on the opposite side of the aisle, I’d say the same thing: leave it. It’s a bait tactic.
When most people go out to eat, they’re looking for an escape. I know I am, I want to enjoy myself, I want to unwind from a long day and I don’t want politics infringing on that especially from someone not in my group. If my dining partners want to talk politics at the table, that’s our choice, it’s also at our table, we aren’t trying to bring in others. I know that I don’t want to be pitched some stranger’s political rhetoric in a place I’ve gone specifically to get away from the noise.
That’s my opinion, not everyone will agree. But that’s the point — we don’t have to. What we don’t need is people going after some poor barista because they won’t write your political commentary on a cup.
McDonald’s, the Union, and the Tip Credit
The Headline: “McDonald's makes strange bedfellows with its tip-credit blowup”
The Source: Restaurant Business Online
What You Need to Know:
McDonald’s doesn’t typically find itself on the same side as organized labor. The fast-food giant has been doing battle with various labor groups longer than many of its restaurants’ workers have been alive, on issues such as the minimum wage, California’s FAST Act and the definition of “joint employer.”
They’ve protested the chain’s restaurants, held strikes, pushed shareholder initiatives and marched outside the company’s annual meeting. And yet, in a series of interviews, the only one that didn’t appear surprised by McDonald’s decision to leave the National Restaurant Association over the tip credit was Saru Jayaraman, the cofounder of labor activist group One Fair Wage. “We’ve heard this from McDonald’s over the last decade, actually,”
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Some of the chain’s franchisees have long been frustrated by the credit, which enables full-service restaurants that accept tips to pay workers a lower-than-minimum wage, so long as the tips add up to the full minimum.
In the process, it effectively internalized—or “brought into the family”—a tip credit debate that historically pitted restaurant industry interests against labor advocates. And it revealed a long-simmering tension between McDonald’s, which must pay all its workers the minimum wage, and full-service brands that get a break because they accept tips.
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The average unemployment rate in the states without a tip credit was 4.3% last year, compared with 4% for the nation as a whole. But they do, on average, have a lower rate of poverty than the nation as a whole—10.2%, compared with 10.6% nationwide.
Casual-dining restaurants certainly don’t feel they have an advantage when it comes to labor.
According to the National Restaurant Association, full-service restaurants are less profitable than limited-service restaurants, with income before taxes at 2.8% of sales on average, compared with 4% at counter-service concepts.
The tip credit hardly saves them on labor. Full-service restaurants spend 36.5% of their revenues on labor, compared with 31.7% for limited-service restaurants. On a chainwide basis, the difference is even starker: Texas Roadhouse spends 33% of its revenue on labor, compared with 24% for Chipotle Mexican Grill.
Martin Murch is the owner of Good Eats Group in Chicago, which spends 30% to 32% of its revenue on labor. About two-thirds of that is spent on tipped workers. “The tip credit really helps the operators to be able to perform and make the model work,” he said.
Our Take:
If the tip credit disappeared tomorrow, restaurants across the country would fall into disarray.
The numbers don’t lie. QSR and fast casual labor costs are already drastically lower. If the tip credit goes away, two things happen: prices go up, and operators get crushed. Take 400 tip credit hours a week in a place like NYC, where the modest tip credit is $5.50. That’s an immediate hit of $2,200 a week. Add payroll tax, you’re closer to $2,500 a week — about $130,000 a year. And sit-down restaurant net revenue runs far thinner than QSR or fast casual. Something like this puts restaurants in the red almost immediately.
Look at cities where the credit is being phased out or gutted, like Denver or Washington D.C. Restaurants are struggling to survive, and in D.C. they’re already trying to roll the legislation back.
I understand the tipping system in the U.S. is flawed. I wish I had a solution, but I don’t, and most who’ve attempted alternatives have failed. I get McDonald’s frustrations. But the sad truth is, without the tip credit, things get worse. Some operators will adapt and rise, sure. But they’ll be the minority. Most will be left in the dust.