Restaurant And Hospitality News – November 7, 2016
By Christine Kern, contributing writer
In news this week, coffee is king in American sales, with Tim Hortons eyeing further U.S. expansion and Starbucks posting records sales for the year; and hoteliers are increasingly turning to new POS tech to help boost the guest experience and improve efficiency.
Tim Hortons Eyes U.S. Expansion To Counter Sagging Sales
Tim Hortons’ parent company Restaurant Brands, also the owner of Burger King, has big plans for Canada's top coffee-and-doughnut chain, after the release of the latest quarterly earnings which left little to be desired. The U.S. expansion plans are designed to show investors they've still got a fire in their belly, according to AOL Finance.
CEO Daniel Schwartz told Bloomberg that the chain is eyeing a big expansion, pushing into the new U.S. territories and adding stores in markets including Minneapolis and Cincinnati. Schwartz said, “We think the Tim Hortons brand should be everywhere in the U.S. We’re always focused on finding new markets.”
The push into the U.S. market is not new. In February, the chain announced that it was opening new locations in Indianapolis, Cincinnati, and Columbus, Ohio, adding to its then roughly 650 locations, according to the Globe and Mail. “We’ve done a good job laying the foundation for growth of Tim Hortons in the U.S.,” Mr. Schwartz said in an interview, declining to specify how many locations he will add. “The potential for the brand there is huge.”
Tim Hortons is eyeing the growing share of budgets that go toward java, with coffee-shop sales growth outpacing those of burger joints, according to data from research firm Technomic. The United States also is the world’s largest coffee-consuming country.
“Coffee and fast casual – those are the two areas of the restaurant industry that are growing the fastest,” Bloomberg Intelligence analyst Michael Halen said. “There’s definitely potential.”
Starbucks Posts 23-Percent Increase In Net Earnings In Q4
As Tim Hortons pushes to expand further into the United States, Starbucks is strengthening its hold on American coffee drinkers, posting a 23-percent increase in net earnings for Q4, recording the most profitable year in the brand’s history as a public company, according to The Nation’s Restaurant News. Quarterly earnings were $801 million, an increase from $652.5 million last year, while yearly earnings increased 2.8 percent to $2.8 billion.
Same-store sales also rose 5 percent during Q4 across the Americas, with a 4 percent rise in the U.S., driven by a 6-percent increase in average ticket sales and reflecting a 1-percent decrease in traffic. Starbucks also recently redesigned their Starbucks Rewards loyalty program, which initially had a negative impact on sales.
Mobile order and pay also represented 6 percent of U.S. transactions for the quarter, a 5 percent increase over Q3.
“Starbucks’ record Q4 and fiscal 2016 financial and operating results in the face of ongoing economic, consumer and geopolitical headwinds, and the significant investments we continue to make in our people and our business, once again demonstrate the power, relevance and resilience of the Starbucks business and brand,” said Howard Schultz, the Seattle-based chain’s chair and CEO.
Hoteliers Turning To POS Tech To Help Improve Guest Satisfaction
Today’s most important innovation for hotel restaurant operations is not signature dishes, but the technology driving efficiency and effectiveness across service. According to The 2016 Smart Decision Guide to Restaurant Management and POS Systems, a growing number of hoteliers are deploying next-generation restaurant management and POS systems. These systems are having a profound impact on business operations, guest satisfaction, revenue growth and overall profitability across multiple parts of the hotel property.
Restaurant POs systems current comprise the largest segment of restaurant IT budgets, and providers of these solutions are facing stiff competition, including for hotel and resort operators’ business. To determine which solutions are right for your property, prospective buyers need to ask the right questions of potential vendors. Approach your buying process with clear expectations regarding customer support and problem resolution, as well as the necessary training to get servers and staff up to speed on the new solution. The research demonstrated that 78 percent of restaurant operators say adequate user training is the most important factor for successful implementation.
The drive to upgrade capabilities is driven not just by the benefits of POS mobility, but also by pressure to accept new payment methods like chip credit cards and e-wallet apps, and the need to comply with new data security requirements. In fact, the study states, “Today, restaurant operators have a vast array of compelling reasons to upgrade their technology capabilities from an antiquated and underperforming system.” The Smart Decision Guide offers a “roadmap to success” for these operators, including insights for evaluation of systems, practical guidance for making the right choices, and pointers for maximizing the value of the investment post-implementation.