Restaurant And Hospitality News – September 11, 2017
By Christine Kern, contributing writer
In news this week, savvy restaurants should see their online ordering spike during football season; the Obama Administration overtime pay rule has been nixed by a federal judge; and Starbucks has announced that it is closing its online operations for good.
Football Season Should Mean Boost In Online Ordering For Restaurants
As the temperatures cool and leaves turn, customers know that means the start of football season, a time when restaurants should be ready for a boost in online ordering revenue, according to business intelligence from orderTalk, Inc. Last year, orderTalk’s restaurant clients scored an average increase in revenues of nearly 10 percent compared to the rest of 2016.
“A restaurant ordering system, when seamless and efficient, drives sales,” explained orderTalk CEO Patrick Eldon. “Football season is a prime time for ordering food online as more and more fans stay home to enjoy the games. The good news for restaurants is that the playing field has expanded beyond diehard fans. Today even the casual fan who is entered in a fantasy football pool at work is now paying attention to scores and stats. A larger fan base potentially leads to more orders and that’s always good for business.”
Of course, football fans don’t always order in. For those restaurant operators hoping to lure fans to their tables, Technomic’s 2016 Snacking Occasion Consumer Trend Report, powered by Ignite, offers some valuable tips for tweaking those fall menu offerings. Popular game time snacks include bar bites, wings, and popcorn chicken, and 68 percent of full-service restaurants offer breaded protein as an appetizer, according to the report. Chicken menu options continue to expand, as well.
This is good news for sales, since Technomic’s 2017 Center of the Plate: Poultry Consumer Trend Report found that 47 percent of respondents eat chicken as a snack at least once a month, up from 43 percent in 2015. That trend is even stronger among younger diners, where 59 percent between the ages of 18 and 34 eat chicken for a snack at least once a month.
Federal Judge Reverses Obama Administration Overtime Pay Rule
U.S. District Judge Amos Mazzant in Texas has struck down a rule created by the Obama administration that extended mandatory overtime pay, siding with business groups and 21 states that had challenged the rule, according to Reuters. The rule, many restaurateurs had argued, would have a significant impact on their operating costs, driving up prices and lowering efficiencies. The move was taken by the same judge who blocked the rule from taking effect last year, pending his final decision.
Under the Obama rule, the maximum salary a worker could earn and still remain automatically eligible for overtime pay would have approximately doubled, to $47,000. The Trump administration also was opposed to the implementation of the rule as approved by the Obama administration.
Judge Mazzant argued that the salary level was so high that it could encompass certain management workers who should be exempt from overtime protections. Nevada Attorney General Adam Laxalt, who represented the 21 states suing over the rule, supported the decision, stating that the rule would have cost stated millions of dollars in overtime pay, leading to job losses in the private sector.
Angelo Amador, senior vice president of the National Restaurant Association, also approved the ruling, stating that the decision “demonstrates the negative impacts these regulations would have had on businesses and their workers. We will continue to work with (the Labor Department) to ensure workable changes to the overtime rule are enacted.”
Starbucks Plans To Shutter Its Online Store This Fall
Starbucks has announced that it will permanently end operations for its online store, effective October 1, according to Business Insider. Prior to the closure, the website is offering up to 50 percent discounts on items on the website. Starbucks will continue to make its products (including coffee brewers, espresso makers, glasses, mugs, coffees, and teas) available through other retailers, including grocery stores and Amazon.com, after the closure of its online portal, and Starbucks will remain committed to its most loyal online shoppers and will keep them apprised of the latest stock and inventory information, according to Starbucks’ spokesperson Maggie Jantzen.
Starbucks is shifting its emphasis, and anticipates replacing its online store format with new partnerships with digital firms. Starbucks CEO Kevin Johnson told investors last month, “these partnerships, we believe, will enable us to leverage our brand, our global retail footprint and the customer base in order to extend our reach.”
Starbucks is also expected to roll out expanded artificial intelligence technology as part of its enhanced Digital Flywheel Program this fall. These advances will help identify patterns in customer orders, suggesting new products or reordering favorite items and generating customized offers.
“Starbucks is one of the best companies in the world that connects brand, user, and consumer experience between digital, mobile, and the real world,” explained analyst Brian Solis. “they are still pushing forward, rolling out their Digital Flywheel strategy to be more dynamic and to further integrate digital and real world.”