How Technology Can Help Quick Service Restaurants Reduce Operating Costs While Improving the Guest Experience |

In the coming months and years, QSRs that embrace the technology will have the tools they need to serve a growing number of customers while battling macroeconomic headwinds.

By Rajat Suri, CEO & Founder of Presto – 8/23/2022

The past few years have presented challenge after challenge for the restaurant industry, and a new one appears to be looming: a recession that threatens to reduce discretionary consumer spending and keep diners at their kitchen tables rather than in full-service dining rooms.

However, if history is any indicator, the recession is not necessarily the death knell for QSRs. Rather, the recession offers a unique opportunity for operators in this segment to capture long-term brand loyalty by delighting customers with faster and better service while tackling some of the major challenges facing the industry today.

How can restaurants do this? By adopting technology – and fast. In the coming months and years, QSRs that embrace the technology will have the tools they need to serve a growing number of customers while battling macroeconomic headwinds.

The restaurant industry faces many challenges

Since the start of the COVID-19 pandemic, the restaurant industry has been grappling with a huge wave of challenges. Widespread labor shortages have forced companies, including restaurants, to raise wages.

Labor shortages led to problems on a wider scale. Like Restaurant business reported a May article, “The labor market is the main culprit behind much of the inflationary concern, as companies have had to raise wages aggressively to attract workers.” These fears led the Fed to raise interest rates in hopes of slowing inflation. “For restaurants, [raising interest rates] means higher debt costs, which could lead some operators to slow expansion or reduce growth expectations.”

Steady inflation has led to a domino effect of challenges for restaurants. Food prices have risen more than 10% year-over-year, according to the U.S. Bureau of Labor Statistics, and in June, QSR Magazine reported that all six major grocery store food group indexes have increased over the past year — and five of those groups rose more than 10%.

Thus, restaurants face a recession with fewer servers, less cash available, lower margins and the threat of reduced demand — especially for full-service restaurants.

In a recessionary environment, QSRs can actually see is growing in search

During a recession, consumers tighten their proverbial purse strings. That means fast-casual and full-service restaurants can expect a drop in customer numbers.

However, QSRs continue to attract customers with their budget prices. According to QSR, “During the week of December 13, 2021…visits at full-service restaurants increased 53 percent year-over-year and 43.4 percent at quick-service locations. But from the week of June 6 [2022], visits to full-service restaurants were down 4 percent, but were still up 7.3 percent at counter service. In its 2022 State of the Industry Report, the National Restaurant Association found that 63% of adults (and a full 75% of Millennials and 70% of Gen Z) believe that restaurants are “essential” to their lifestyle. Even during a recession, diners won’t avoid restaurants entirely; instead, they are more likely to trade down and patronize cheaper options, such as QSRs.

This happened during the Great Recession of 2008. As Oracle noted in a July blog post, “[A] the trend the industry has seen in recent recessions is when customers trade down. Perhaps the weekly fine dining outing is replaced by casual dining, casual dining quickly becomes casual, etc. In 2013, the Journal of Hospitality Financial Management examined how different restaurant segments performed during the Great Recession and found that “stock performance of the limited-service restaurant segment was immune to the recession. No significant decrease was found after the onset of the recession. Indeed, in 2008 fast food restaurants accounted for 7% of restaurant sales. By 2020, that number had almost doubled.

A recession is an opportunity

The barter market and the associated increase in demand presents an opportunity for QSRs. These restaurant operators must prepare to serve an increasing number of customers efficiently and effectively to take advantage of this opportunity. Although there is a shortage of money and staff, providing fast and high-quality service becomes almost impossible without the help of technology.

Technology can help restaurants reduce operating costs while improving the customer experience. This, in turn, can allow restaurants to meet growing customer demand while positioning themselves to capture long-term loyalty and sustainable business.

Restaurants have historically been slow to adopt technology—perhaps in part out of concern that an increasingly digitized experience will dilute the personalized service that guests expect.

They need not be afraid. Presto’s recent Pulse of the Industry survey revealed that a significant majority of consumers are receptive to technology in their drive-thru and at fast food counters. Specifically, respondents are receptive or very receptive to:

  • Computerized voice assistance in the driving line (61%)
  • Personalized menus based on order history and dietary preferences (69%)
  • Personalized food and beverage suggestions based on preferences (69%)
  • Ordering and paying by phone (69%)

In general, respondents reported being receptive to technology that could promise faster and better service. Half said using technology in a restaurant can make the dining experience more efficient, and nearly a third (29%) report it makes the dining experience more enjoyable.

What the technique can do

When used strategically, technology is a game-changer for restaurants facing macro pressures. This has always been the case, beginning with the use of the first electronic sales system in the 1970s. After the Great Recession, restaurant companies that had embraced technology took advantage, and the decade that followed saw the development of game-changing technologies such as mobile apps, self-service kiosks and digital payment options. As Restaurant Business reported in 2018, “Consumer-facing technology has become a must as the industry has become more competitive.”

Today, technology can help QSRs reduce their reliance on staff, reduce wait times that frustrate customers, and provide a faster, more personalized experience that delights diners and keeps their business. Now is the time to invest in technology and improve the customer experience as you battle the ongoing headwinds. QSRs can’t afford to wait.

Rajat Suri is the CEO and founder of Presto. The company’s enterprise sensor, visual and voice technologies help hospitality businesses thrive while delighting guests. With over 100 million guests using Presto every month and 300,000 systems delivered, Presto is one of the largest technology providers in the industry. Rajat founded Presto in 2008 while pursuing his PhD at MIT. He also co-founded Zimride (now Lyft), the popular ride-sharing company. He holds a BA from the University of Waterloo and is also pursuing a Ph.D. / MBA program at MIT.

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