2023 was a big year for QSR brands with new menu items, expansion into new territories, and new technologies from the kitchen to the drive-thru line.
Quick-service restaurants big and small had a big 2023, with many opening new locations and expanding their footprint to new states. Here are a few QSR stories from last year that are worth taking a look back at.
Restaurant goers may have interacted with artificial intelligence (AI) in 2023 and prior without even knowing it, particularly when in the drive-thru line. QSR brands like Del Taco, Checkers, and Panera spent 2023 experimenting with AI-driven chatbots that greet customers, handles orders, and in turn, reduce labor needs for their brands. While these systems currently use preprogrammed responses – a human worker at the restaurant monitors orders and intervenes when necessary – they are designed to improve over time with artificial intelligence. In the instance of Del Taco, the system has been effective in handling 70% of orders and upselling about 80% of the time. Executives anticipate that, within three years, automated drive-thru systems may entirely replace human order-takers in the industry.
Voice automation is only one of the many areas AI is driving an impact in QSR and the restaurant industry as a whole. From customer service to menu targeting, the technology’s impact on the restaurant industry is expected to drive an even bigger impact in 2024 and the coming years.
In November of 2023, Starbucks announced a 3% raise in hourly pay for its U.S. retail employees which took effect on January 1st of this year. The Seattle-based company, which operates around 17,000 stores in the U.S., offers hourly wages ranging from $15 to $24, along with a comprehensive benefits package. The pay increase will vary, with a minimum 3% raise for all hourly retail employees, a 4% raise for those with two to five years of experience, and a minimum 5% raise for those with more than five years of employment. Starbucks also reduced the minimum days required for its employees to qualify for paid vacation benefits.
The wage raise across the board should be a game changer for the coffee giant, as higher wages have a direct correlation with both an increase in applicants and employee retention. This increase in retention should be particularly beneficial to Starbuck in the long run, as higher retention ultimately drives down labor costs by decreasing employee onboarding and training costs. In the restaurant industry, where employee turnover is among the highest, this can have a particularly big financial impact.
2023 was a year of dozens of new menu items across QSR, with McDonalds jalapenos, PizzaHut hot honey, and many spices in-between. One brand that made waves with new menu items was KFC, who has targeted new audiences by expanding its offerings, emphasizing value and product innovation. The introduction of boneless options, such as a 2 for $5 chicken wrap deal and $5 chicken pot pies, contributed to positive same-store sales while the return of the Double Down Chicken Sandwich enhanced the menu even more. KFC reported selling over 100 million chicken nuggets in May after launching the boneless offering in March.
The brand’s focus on affordability is evident in the success of $5 Mac and Cheese Bowls and a $6 Drum and Thigh Combo introduced last year. In fiscal 2022, KFC’s U.S. system sales reached $5.1 billion, with the global footprint expanding to over 27,000 restaurants worldwide, opening nearly 2,500 new units in various markets, including India, Thailand, Turkey, and China. The brand completed a 1,100-unit exit from Russia, selling the stores to local operators. The former franchisees took over all Russian KFC restaurants, operating systems, master franchise rights, and the trademark for Rostik’s, a former Russia-based chicken chain.
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Robots are increasingly making their presence felt in the quick-service restaurant (QSR) industry, revolutionizing various aspects of both operations and labor. From automated cooking and food preparation to contactless ordering and delivery, these technological advancements are streamlining processes and enhancing efficiency. Automated cooking systems can precisely and consistently prepare dishes, ensuring quality and reducing human error. Robotic solutions for tasks like cleaning and maintenance contribute to maintaining high hygiene standards. Outside of the kitchen, many QSR brands began experimenting with robot delivery, emphasizing the impact of robots across every area of the industry.
With the ongoing push for digital transformation and the need for contactless solutions, robots are playing a pivotal role in shaping the future of the QSR landscape, offering innovative solutions to meet evolving consumer demands.
Burger rivals In-N-Out and Whataburger both had successful 2023’s, particularly with expansion and the opening of new locations. The iconic burger chains from California and Texas, respectively, have expanded their presence beyond their historical territories.
In-N-Out, known for its red palm tree logo, has been adding new locations across the country, currently boasting 394 stores. Whataburger, recognized by its Flying W logo, has not entered California but is expanding its footprint in the south and mid-west, with 987 stores across 14 states. The regional burger wars are evolving, with both In-N-Out and Whataburger making strategic moves to capture new markets.
With 2023 now in the books, this year will be an equally big one for the restaurant industry, with expectations for growth at a high. After a few difficult years, with restaurant labor shortages and high inflation, the future looks bright. Here’s to a successful 2024 and beyond!
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