According to a Recent Study/Survey … Special Cinco de Mayo Edition

Here at Modern Restaurant Management (MRM) magazine, we are research junkies so when our friends at CAKE and ezCater sent along some amazing Cinco de Mayo statistics, we knew we had to go off schedule and post a special edition of our popular According to .. research wrap-up. For your reading pleasure, we also included some research on server stereotypes from the University of Missouri and ways artificial intelligence is affecting restaurants from SYNQ3 Restaurant Solutions.

Cinco de Mayo Stats I

CAKE looked at how restaurants and bars performed on Cinco de Mayo in 2015-2016 to help independent operators prepare for this year’s festivities. CAKE’s technology allows restaurant owners to access macro-level data to identify trends—such as how transactions and revenue fluctuate on popular holidays— and level the playing field against large chains with deep pockets. 

They wanted to know: does a holiday like Cinco de Mayo really outperform similar trendy food and beverage instigators, like Taco Tuesday or Thirsty Thursday? Does the day of the week matter when it comes to a holiday’s effect on a restaurant or bar business?

Key findings from CAKE’s analysis:

• This year’s Cinco de Mayo will be a big winner. St. Patrick’s Day 2017 – another favorite drinking holiday for many Americans – fell on a Friday, with bars enjoying 23 percent higher revenue and restaurants 8 percent higher revenue than the previous Friday. Operators may want to consider staffing up for this year’s Cinco de Mayo Friday celebration to accommodate the increase in traffic.
• Bars can expect a bigger lift than restaurants. In 2015, Cinco de Mayo fell on a Tuesday, and data showed that bars performed 23 percent better in revenue and 19 percent better in transactions compared to the prior Tuesday, while restaurants saw a more modest lift.
• But restaurants should still take advantage.  Still, Cinco de Mayo outperformed a regular “Taco Tuesday” for restaurants by 10 percent in revenue.
• The Cinco de Mayo crowd won’t just be regulars. In 2016, Cinco de Mayo fell on a Thursday. With bars outperforming the prior Thursday by 9 percent in revenue and 13 percent in transactions, Cinco de Mayo proved to trump the perennially popular “Thirsty Thursday” – though it looks like overall ticket sizes were smaller.
• Restaurants should play up margaritas more than guacamole. Restaurants again saw a more modest lift than bars, with just 5 percent higher revenue, which means drinks take center stage for this holiday.
• Bonus: Compared to average sales, restaurants can expect bigger lifts for holidays that fall earlier in the week, on traditionally slower days, than those that fall on more popular days (e.g., Tuesday vs. Thursday).

Cinco de Mayo  Stats II

• Last year, 12 percent of all ezCater orders were placed with Mexican restaurants
• During the week of Cinco de Mayo 2016, 15 percent of orders nationwide were placed with Mexican restaurants
• That’s a 25 percent increase nationwide, across all cities and ezCater orders

• On average, businesses in Las Vegas ordered more Mexican food during the week of Cinco de Mayo last year than any other city.
• More than a third (37 percent) of all orders in Las Vegas during that week were placed with Mexican restaurants. Nationally, only 15 percent of all orders that week were placed with Mexican restaurants.
• During the week of Cinco de Mayo, Las Vegas businesses ordered 65 percent more Mexican food than they did throughout the rest of the year.
• Through all of 2016, 22 percent of orders from Las Vegas businesses were from Mexican restaurants. That number jumped to 37 percent during the week of Cinco de Mayo – a 65 percent increase.

• In 2016, 25 percent of all orders from businesses in Indianapolis were placed with Mexican restaurants. That’s the second highest amount among all U.S. cities. The only city that ate more Mexican food at work was Fort Worth, Texas where businesses placed 26 percent of their orders with Mexican restaurants last year.
• Orders from Mexican restaurants accounted for 27 percent of the total amount Indianapolis businesses spent on catering last year. That’s 47 percent higher than the national average.

• During the week of Cinco de Mayo 2016, businesses in Salt Lake City spent a higher percentage on Mexican food than any other city. 37 percent of the money spent on business catering orders that week went to Mexican restaurants. That’s 55 percent more than the national average.
• Nearly a quarter (23 percent) of all business catering orders in Salt Lake City that week were placed with Mexican restaurants, compared to only 15 percent of orders nationally.

• Businesses in Miami spent the second most on Mexican food during the week of Cinco de Mayo last year when compared to other cities nationally. 32 percent of all money spent on business catering orders that week in Miami went to Mexican restaurants. That’s 48 percent more than the national average.
• Miami was second only to Salt Lake City, where 37 percent of total spend went towards Mexican food. Las Vegas, Fort Worth, TX and Allentown, PA rounded out the top five.
• Throughout all of 2016, nearly a quarter (21 percent) of the money that Miami businesses spent on catering went to Mexican restaurants. That’s 34 percent higher than the amount spent with Mexican restaurants nationally last year.

• Last year, businesses in Fort Worth spent more on catering from Mexican restaurants than any other city. Nearly a third (29 percent) of all the money local businesses spent on catering last year went towards Mexican restaurants. That’s 52 percent more than the national average.
• Businesses in Fort Worth also ordered more Mexican food than any other city, on average, with more than a quarter (26 percent) of all 2016 orders placed with Mexican restaurants.

• Businesses in Nashville nearly tripled their orders from Mexican restaurants during the week of Cinco de Mayo last year – a higher increase than any other city in the U.S.
• During the week of Cinco de Mayo last year, Nashville businesses placed 140 percent more orders with Mexican restaurants than they did during a normal week last year.
• During the entire year, 5 percent of catering orders from local businesses were placed with Mexican restaurants, and that number jumped to 12 percent during the week of the Mexican Holiday (a 140 percent increase)

• Business in New York City more than doubled the number of orders placed with Mexican restaurants during the week of Cinco de Mayo last year.
• During that week, New York City businesses ordered 119 percent more Mexican food than they did during a normal week.
• During all of 2016, orders from Mexican restaurants accounted for 7 percent of business catering orders in New York, and that number jumped to 16 percent during the week of Cinco de Mayo (a 119 percent increase).
• 20 percent of the money that New York City business spent on catering during the week of Cinco de Mayo last year went to Mexican restaurants. That’s more than twice the amount that New York City business spend on Mexican food during a normal week. Throughout all of last year, 8 percent of total catering spend from local businesses went towards Mexican food.

Server Stereotypes

With tipping a central part of the American restaurant industry, better service often is attributed to whether or not a server believes a customer will be a good tipper. Now, researchers at the University of Missouri have found that restaurant servers often use stereotypes to determine which customers will leave better tips. Dae-Young Kim, an associate professor of hospitality management in the MU College of Agriculture, Food and Natural Resources, says that servers believe well-dressed customers are the most likely to leave good tips. The researchers say this could result in those well-dressed diners receiving better service.

“Everyone uses first impressions to make snap judgements,” Kim said. “For servers, especially busy servers, they often have to make decisions about how to best devote their time and energy, so they look for ways to identify which customers will reward them the most for their service. The more professionally dressed a customer is, the more likely a server is to stereotype them as a good tipper, regardless of their race or gender.”

Kim and his doctoral student, Kathleen Kim, surveyed 222 current and former restaurant servers. The researchers showed the participants pictures of people of different races, genders and attire and asked the participants to indicate who they believed would leave good tips and poor tips.

The researchers found that the race of customers did not significantly affect servers’ perceptions of their likelihood of tipping well. However, compared to white customers, well-dressed minorities were identified as more likely to leave good tips, while casually dressed minorities were identified as more likely to leave poor tips. Also, regardless of race, well-dressed men were identified as more likely to leave good tips compared to women, while casually dressed men were seen as the least likely of any group to leave good tips.

“It is clear that restaurant servers use stereotypes and first impressions to determine which customers will receive good service,” Kathleen Kim said. “These findings show restaurant managers the importance of proper training for servers so all customers receive good service. This study also shows potential issues with the tipping culture that exists in American restaurants. While the tipping culture can motivate servers to provide quality service to some customers, it may result in unequal service for others.”

The study, “The Effects of Visible Customer Characteristics on Servers’ Perceptions of Tipping: Potential Threats to Service Interactions,” was coauthored by Gumkwang Bae, from Dong-Eui University in South Korea and published in Cornell Hospitality Quarterly.

AI and Restaurants

SYNQ3 Restaurant Solutions announced results from a never-before-done study using a new artificial-intelligence (AI), automated-speech-recognition (ASR) technology, VIA Analytics.  Results show that restaurants using dedicated order-takers and guest-specific data experience a 6.4 percent increase in sales and an 11.4 percent increase in positive customer experience.

In the study, VIA (Virtual Intelligent Assistant) monitored restaurant calls for three major brands, including P.F. Chang’s, as well as SYNQ3’s restaurant-technology, call center. Using advanced AI, the tool tracked tone of voice, vocal stress, language, interactions, timeliness of responses, interruptions, vocal exchanges, and emotions during each call. It then correlated those findings with customer experience, engagement, handle time, call abandonment, average check, and order-to-call ratios.

When detailing why P.F. Chang’s participated in the study, the president and COO Wayne Jones said: “Creating the optimal dining experience for guests is our No. 1 goal. With this study we were able to actually track, measure and assess live, in-process guest interactions to find specific strategies for enhancing the guests’ experience.”

Takeaways include:

• Restaurants need to provide more consistent positive engagement.

To provide the optimal guest experience during take-out orders, restaurants have to identify and implement means for increasing consistency and efficiency in how they engage with their guests. By centralizing the order-taking process, restaurants can provide more focused, effective and enjoyable guest interactions.  

• Guest-specific data can greatly increase the guests’ experience and overall guest-to-restaurant relationship.  

According to the study, using dedicated order-takers and guest-specific data equated to a more positive customer experience by 11.4 percent. When a guest calls for a take-out order, and SYNQ3’s guest-data system recalls their name, preferences, favorite order, food allergens, and other specifics, the order-taker can provide an efficient, guest-centered interaction. And, according to the study, guests like ordering with someone who knows what they want and how they want it.

• Outsourcing, restaurant technology, and guest-specific data lead to greater profit margins in take-out orders.

In the study, restaurants experienced significantly better order-to-call ratios, a 6.4 percent increase in sales, when using dedicated order-takers and guest data. With the data, the call center was able to greet callers by name; offer options based on noted preferences; direct the conversation based on tone and prior ordering history; upsell; and, ultimately, close more sales with an increased average check.

“Increasing restaurant profits depends on providing a great guest experience,” Jones said.   “Advanced artificial intelligence, data tracking, and other new technologies are set to transform the guest experience and equip restaurants to thrive in the upcoming Restaurant 3.0 world,” Bigari said.