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Fast Food Changes

Fast food restaurants have made several changes, spurred by the needs of their customers during the COVID-19 pandemic. One of the major changes has been to focus on automation.

An example of automation is the use of apps for ordering. Many restaurants are encouraging customers to order through apps. However, this presents problems in filling orders—specifically getting the food to the customers. In many cases, customers must go through the traditional drive-thru lane—frustrating customers with what is perceived to be unnecessary waits.

So, many restaurants are adding multiple drive-thru lanes. An industry advertisement from Checker’s franchises suggested that one drive-thru lane isn’t enough. Taco Bell is leading the push with its ‘Taco Bell Defy’ restaurant design in Brooklyn Park, Minnesota. The first location opened on June 7, 2022, with a design featuring a kitchen on the second floor, and four drive-thru lanes. One is a traditional lane, while the other three support app/online orders.

Another trend has been to streamline the menu. McDonald’s has led the way with the elimination of all-day breakfast, salads, grilled chicken sandwiches, and parfaits. Restaurants in general have reevaluated their menus as costs and availability of ingredients change, and are looking for ways to reduce labor cost by eliminating items that are labor-intensive.

It is interesting that many of these fast food restaurants, including McDonald’s and Taco Bell, had very limited menus when they first entered the market.

Video Spotlight:  

This post is based on The Star article, McDonald’s shrinking menu means healthier foods are vanishing, by Leslie Patton, June 11, 2022; The Street article,  Can Taco Bell Change a Key Part of the Fast Food Menu?, by Colette Bennett, June 7, 2022; and the YouTube video in the Spotlight. Image source: Song_about_summer/Shutterstock

Discussion Questions:

1.  Why use apps for ordering?

Guidance: The use of apps for ordering does three things for fast food restaurants: it reduces the number of workers needed to receive orders, it removes one place where order mistakes are made, and it is easier to have effective loyalty programs, which also provide many benefits to restaurants.

2. Why have multiple drive-thru lanes?

Guidance: Fast food restaurants have embraced ordering from apps. However, it is frustrating for customers to have to enter a single traditional lane where they are mixed-in with traditional in-person orders. It defeats one of the reasons for customers placing orders through apps—speed.

Additional lanes dedicated to app orders can solve this issue. Another advantage is that multiple lanes can help third party delivery services—making them more efficient.

3. Given the number of shortages and price increases that are impacting menus, what can restaurants do to maintain their menu?

Guidance: Although efficiencies are driving restaurants to limited menus, maintaining availability of menu items is critical. Restaurants need to look for flexibility in their menus and supply chains. When shortages occur, can they substitute ingredients? They should also have suggestions available for substitute products for the customers.

4. How can restaurants keep their menus attractive in spite of the move toward limited menus?

Guidance: Simplification of menus provides many operational advantages. It also has the potential to make the menu less attractive.

Many restaurants are looking at rotating items—potentially on a seasonal basis.

Another approach is the Limited Time Offering (LTO). Taco Bell often uses this approach, and it incents customers to post on social media regarding LTOs, and potential LTOs.

LTOs do require planning. Several companies have had difficulty anticipating the demand. Most recently, Taco Bell did not anticipate that demand for their Mexican Pizza would be seven times their expectation. This resulted in shortages of the product.

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June 27, 2022 Newsletter
Excess Retail Inventory