Over the past 10 years, sales in the restaurant industry have increased by almost 50%.
In 2019, the industry’s sales accounted for 4% of the U.S. Gross domestic product, and in the next ten years, the National Restaurant Association expects the number of locations to go from 15.3 million to 16.9 million. It may be hard to imagine, then, that over the past couple years, many restaurant chains are reporting less guests than in the past. Therefore – this year, the best restaurant brands will not just be the ones with the most customers. They will be the ones who have found ways to increase the total sale per check and are pushing new ways to reach the consumer right where they already are – at home. Changes such as these affect all aspects of business within this industry. Not only are QSRs changing their mindset on the marketing of not only the taste of their food, but the experience and the different services offered, such as UberEats, DoorDash, GrubHub, etc., but they are also rethinking what this means for the maintenance of their facilities as far as upgrades to their interior equipment, lighting, in-store digital experiences, etc. 2020 is the year of change, and we’re here for it.
Today’s top restaurants are doing everything they can to attract a younger generation.
These digitally-consumed customers are a whole new breed for many of the country’s older brands. Now, many of these older brands have improved their technology, personalized marketing incentives, and loyalty and rewards programs.
So, what does QSR believe will be the best restaurants of 2020?
The answer may surprise you: coming in first is Papa John’s. While they may have had a pretty (read: VERY) rocky PR hurdle to overcome in the past months, the new CEO and a much-needed facelift for the brand have given Papa John’s its first positive same-store sales result since Q3 of 2017. These changes were not cheap; the pizza chain said it would use up to $100 million to advance its turnaround priorities.
Next on the list is Domino’s. Coincidence? Not likely. In 2008, Domino’s became one of the world’s largest sandwich delivery restaurants almost overnight. In 2012, it dropped “Pizza” from its logo and ran one of the greatest marketing programs I’ve heard of: find a location with the old logo and be entered to win free pizza for life.
These and other recent innovations (Domino’s pizza car, anyone?) have allowed this company to reach a level of stability that is rare in the industry. 2020 doesn’t look like a year off, either. In late 2019, Domino’s announces a new GPS delivery tracking system, and it remains intent on fortressing locations so it can take advantage of carry-out business and improve delivery times and performance by cutting down the radius for drivers.
The final restaurant on the list is Chipotle.
In December of 2019, it announced a new restaurant design intended to leverage the rapid growth in its digital business – which jumped 88% YOY in the third quarter. The prototype features a “Chipotlane pick-up window” for mobile orders. They also rolled out rewards and delivery programs, and they continue to add new menu items (two in the past year).
So, what can we learn from these three restaurant chains? I think they can be summarized in a couple bullet points:
• Focus on the audience of the future: digitally-focused millennials who want superior results and quick convenience.
• New marketing strategies can be expensive and difficult, but they’re also critical – how something looks and sounds is now as important as how it tastes.
• Find ways to increase longevity with rewards programs and delivery convenience.