The real value of gift cards to restaurants
Plus: Profitability tips from a restaurant investor
• public
The holiday season is full of paradoxes. Today, we're covering a little bit of good news (gift card revenue) and little bit of bad news (delinquent rent) for restaurants in this edition of The Prep. But first: here's how Austin’s iconic El Arroyo restaurant built its cult following.
On the menu:
💠 10 must-use restaurant profitability tips
💠 Leverage past POS data to tackle the holiday rush
💠 DoorDash cracks down on fake driver accounts
💠 A restaurant consultant's take on not growing
What we’re watching: Lauren Fernandez’s restaurant profitability tips on LinkedIn. In 10 short videos, the CEO of Full Course, a restaurant incubator and investment firm, gives straightforward advice while acknowledging the current environment for restaurants.
What we’re reading: This advice from Modern Restaurant Management on how to prepare for the holiday rush using POS data.
What we’re following is DoorDash’s crackdown on fake driver accounts.
What we’re consuming: A lot of protein, pickles and Dr. Pepper, if Grubhub’s 2024 Delivered Report is to be believed.
Plus: A behind-the-scenes look at how Peter Chang’s 18 restaurants handle the Christmas rush.
Gift card sales are good news for restaurants
Restaurant gift card sales peaked during Thanksgiving weekend 2024, according to Paytronix, a digital guest engagement platform. "Paytronix data also indicates a renewed, post-Covid enthusiasm for in-person dining experiences with FSR sales outstripping QSR sales," says Lee Barnes, Paytronix's chief data officer and chief of staff. Overall, $12.3 million was spent on gift cards for full-service restaurants and $5.2 million on cards for quick-service restaurants. Separately, the National Restaurant Association found that nearly three-quarters of Gen Z adults were planning to give a restaurant gift card this holiday season. Gift cards are increasingly used as gifts to self, too. "Consumers are increasingly turning to gift card promotions as a smart way to stretch their dining budgets," according to an earlier Paytronix report. (Paytronix)
November rent was a struggle for independent restaurants
In November, independent restaurants’ rental delinquencies reached their highest level all year, according to a report from Alignable. Forty-six percent of owners were unable to pay rent. That’s up 3% compared to October and about 11% compared to November 2023. Restaurant traffic, consumer price sensitivity,= and rising food costs all contributed, and these difficulties forced many independent restaurants to declare bankruptcy. “These financial pressures are often insurmountable for businesses with limited cash reserves, and many of these establishments will need to see an upturn in the coming months,” says Chuck Casto, Alignable’s head of research and news. (Restaurant Dive)
66%
Restaurant reservations booked the same day
(SevenRoom's 2024 U.S. Restaurant Trends Report)
💠 What should we call boneless chicken wings?
💠 A hobbit-themed restaurant is heading to Maine
💠 Retail food inflation outpaced restaurant menu prices
"There’s even the idea that you don’t need to keep growing. Sometimes you can just stay where you are and that’s where you are. You don’t need to chase something that the industry tells you you need to chase."
-Chris Deferio, coffee shop consultant and owner of Keys to the Store
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