How technology can help quick-service restaurants reduce operating costs while enhancing the guest experience.

In the coming months and years, QSRs that embrace technology will have the tools they need to serve increasing volumes of customers while battling macroeconomic headwinds.


By Rajat Suri, CEO & Founder of Presto – 8.23.2022

The last few years have presented challenge after challenge for the restaurant industry, and by all accounts, a new one is brewing: a recession, which threatens to reduce discretionary consumer spending and keep diners at their kitchen tables instead of full-service meals. rooms.

If history is any indicator, though, the recession needn’t be the death knell for QSRs. Instead, the recession presents a unique opportunity for operators in the sector to achieve long-term brand loyalty by delighting customers with fast, good service while tackling some of the major challenges facing the industry today.

How can restaurants do this? By adopting technology – and fast. In the coming months and years, QSRs that embrace technology will have the tools they need to serve increasing volumes of customers while battling macroeconomic headwinds.

The restaurant industry is facing many challenges

Since the start of the COVID-19 pandemic, the restaurant industry has been battling a hydra-headed spate of challenges. Widespread labor shortages have forced companies, including restaurants, to raise wages.

Labor shortages have caused problems on a large scale. Like Restaurant business An article in May reported, “The labor market has been the main culprit of inflation concerns as companies have had to aggressively raise wages to attract workers.” These fears have prompted the Fed to raise interest rates in hopes of slowing inflation. “For restaurants, [raising interest rates] This means higher borrowing costs, which may cause some operators to scale back expansion or cut growth expectations.”

Continued inflation has created a domino effect of challenges for restaurants. Food prices have risen more than 10% year-over-year, according to the U.S. Bureau of Labor Statistics, and QSR magazine reported in June that all six major grocery store food group indexes rose last year—and five of those groups rose more than 10 percent. .

Restaurants thus face a recession with the threat of fewer servers, less available cash, lower margins, and lower demand—especially for full-service restaurants.

In a recessionary environment, QSRs may actually see one to grow on demand

During a recession, consumers tighten their proverbial purse strings. This means fast casual and full-service restaurants can expect a decrease in customer volume.

QSRs, however, continue to attract customers with their budget-friendly prices. According to QSR, “During the week of December 13, 2021 … visits to full-service restaurants were up 53 percent, year-over-year, and quick-service locations were up 43.4 percent. But through the week of June 6 [2022], visits to full-service restaurants were down 4 percent but still increased 7.3 percent to counter service. In its 2022 State of the Industry report, the National Restaurant Association found that 63% of adults (and a full 75% of millennials and 70% of Gen Z) believe restaurants are “essential” to their lifestyles. Even during a recession, diners aren’t avoiding restaurants entirely; Instead, they are more likely to trade and patronize cheaper alternatives such as QSRs.

This happened during the Great Recession of 2008. As Oracle noted in a July blog post, “[A] A trend that the industry has seen in the current recession is a decline in customer business. Maybe the weekly fine-dining outing is replaced by casual dining, casual dining becomes fast-casual, etc. In 2013, the Journal of Hospitality Financial Management examined how various restaurant segments performed during the Great Recession and found that “stock performance in the limited-service restaurant segment was immune to the recession. No significant decline was identified after the recession began.” Indeed, in 2008 , fast-casual restaurants represented 7% of restaurant sales. By 2020, that number had nearly doubled.

Recessions provide opportunities

A trade-down market and its associated increase in demand presents an opportunity for QSRs. These restaurant operators must be prepared to capitalize on this opportunity to serve the growing number of customers effectively and efficiently. Despite being short on cash and short on staff, providing fast, high-quality service is nearly impossible to do without the aid of technology.

Technology can help restaurants reduce operating costs while enhancing the customer experience. This, in turn, can allow restaurants to meet increased customer demand while positioning themselves to capture long-term loyalty and sustainable business.

Restaurants have historically been slow to adopt technology—perhaps in part because of concerns that an increasingly digitized experience has come to expect personal service diners.

They need not fear. Presto’s recent Pulse of the Industry survey found that a large number of consumers embrace technology in their drive-throughs and at their fast food counters. Specifically, respondents are receptive or very receptive to:

  • Computerized voice assistance at the drive-thru line (61%)
  • Personalized menus based on order history and dietary preferences (69%)
  • Customized food and drink recommendations based on preferences (69%)
  • Order and pay by phone (69%)

In general, respondents reported being receptive to technologies that promise faster, better service. Half said that a restaurant’s use of technology can make the dining experience more efficient, and nearly a third (29%) reported that it makes the dining experience more enjoyable.

What technology can do

When leveraged strategically, technology is a game-changer for restaurants facing macro pressures. This has always been the case, beginning with the use of the first electronic point-of-sales systems in the 1970s. After the Great Recession, restaurant companies that embraced technology benefited, and the following decade witnessed the development of game-changing technologies such as mobile apps, self-service kiosks and digital payment options. As Restaurant Business reported in 2018, “consumer-facing technology has become essential as the industry has grown more competitive.”

Today, technology can help QSRs reduce their reliance on staff, reduce wait times that frustrate customers, and provide a faster, more personalized experience that delights diners and sustains their business. Now is the time to invest in technology and upgrade the customer experience while combating ongoing headwinds. QSRs can’t wait.

Rajat Suri is the CEO and Founder of Presto. The company’s enterprise-grade touch, vision, and voice technologies help hospitality businesses thrive while delighting guests. With over 100 million guests and 300,000 systems deployed using Presto each month, Presto is one of the largest technology providers in the industry. Rajat founded Presto in 2008 while pursuing his doctorate at MIT. He also co-founded the popular ride-sharing company ZimRide (now Lyft). He graduated from the University of Waterloo and received his Ph.D. / MBA program at MIT.

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