​Amazon made headlines recently with its announcement that it would require all employees to return to the office five days a week as of this coming January. The online retailer joins major companies such as UPS and Dell, which have made similar calls in recent months, and it launched speculation that many employers that are struggling to maintain their company culture amid hybrid work may see this as an opportunity to bring employees back to the office. While the response to Amazon’s announcement has been mixed, it’s surely good news for foodservice businesses. Years of hybrid work have created uncertainty around future planning for restaurants, reduced foot traffic and shifted consumer dining habits, among other effects. A report from CNBC acknowledged that while many restaurants and hotels in city downtowns have seen their sales come back to pre-pandemic levels, that’s only happening on Tuesdays, Wednesdays and Thursdays. So the return of employees to cities is likely to create more reliable, predictable foot traffic during lunch and the daily commute. It’s interesting timing for restaurants looking for opportunities – or for the right moment to make changes. In a recent report from Bank of America, which preceded the news from Amazon, Ted Lynch, managing director of the bank’s Global Commercial Banking’s Restaurant Group, predicted 2025 to be a busy year for restaurant mergers and acquisitions. Amy Forrestal, managing director of the Atlanta investment bank Brookwood Associates, agreed. John Hamburger, publisher of the Restaurant Finance Monitor, acknowledged that for foodservice businesses looking to grow or develop new concepts, “there are still a lot of reasons to be a buyer.” Other industry analysts have said in recent months that activity around restaurant bankruptcies and restructuring will largely depend on return-to-work trends. Now there are clear signs that such changes are on the horizon. If you’re looking for opportunities, now could be a good time to assemble advisors, assess your budget, define your goals and weigh the revenue potential of various options based on the shifting landscape.

At full-service and quick-service restaurants alike, the number of limited-time offers has grown 53 percent in the past four years, according to research from Technomic. For more than half of consumers Technomic surveyed, the availability of LTOs impacts their choice of restaurant. As a result, the number of LTO launches has climbed 46 percent in the past year. But just as foodservice businesses have had to target customized segments of their database to drive sales in general, they are finding that guests respond to LTOs differently. As a result, restaurants should approach them in ways that connect with cross-sections of guests who are navigating an increasingly crowded landscape of options. What guests appreciate in an LTO often differs by generation, for example. According to Technomic research, Gen Z are attracted to menu items containing familiar brand names – like IHOP’s Oreo Cookie Crumble Waffle, for example – or descriptive words like “loaded” or “big.” More mature consumers like those descriptive words too, though more to indicate the actual size (i.e. value) of the dish coming to them. You may be able to refine your offers through deeper segmentation of your data – and this could help you build stronger guest relationships and stand out above competitors as well. For example, is there a specific guest segment you want to warm up as you approach a certain time of the year? Being able to draw connections based on factors such as gender, age, geography, behavior, values and interests could help you build your ideal LTO. It won’t appeal to everyone, but you can use it to enhance loyalty with a key niche audience.

​Loyalty programs have become critical tools for restaurants to connect with guests – but they are also easy to get wrong. Even giant brands have run into trouble when their loyalty programs made changes that required participants to use significantly more accumulated points than previously needed to collect rewards. At the other end of the spectrum, a number of brands that jumped into loyalty marketing via newer Web3 technology – using blockchain and NFT to deliver experiences that connect with consumers in new ways – have also hit some bumps in recent months. Succeeding with loyalty is likely less about the specific tools you use and more about how well your business truly understands the habits and cravings of its guest segments. At a time when businesses are eager to target millennials (who eat out more than any other generation) and Gen Z, demographics that prize authenticity, loyalty programs in all of their forms need to feel trustworthy. Nowadays, that’s about building community with guests where they spend time – both online and in-person – in ways that make them feel understood and appreciated. For a good number of brands that are targeting Gen Z consumers, that could mean collaborating with complementary brands to connect with people in a virtual space like an online game. But just like the messages you send to your database of guests, one approach doesn’t fit all.

​It’s so much easier to bring existing guests back to your restaurant than to attract new ones – and your loyalty program is a vital tool to help inspire return visits and make them feel worthwhile to people. But at a time when loyalty programs are available at so many restaurants (as well as at more indirect competitors like convenience and grocery stores), it’s important to make a program relevant to each guest. McKinsey research found that businesses that excel at personalization generate 40 percent more revenue from their personalization efforts than businesses that are more average performers. But there is a lot of room for improvement here, according to a new loyalty report from Paytronix. It found that only 44 percent of consumers say the offers they get are relevant, indicating a desire for higher levels of personalization. Even if your business offers some kind of loyalty program segmentation – most brands do – are you sure it’s hitting the right notes with guests? The Paytronix research found that successful programs offer differentiation so each member gets what they crave, an emotional connection using such tools as historical data about past orders or celebratory offers on birthdays, and brand affinity so guests connect positive experiences with your business. This requires understanding guests at a granular level. AI and machine learning technology that is baked into many new platforms is helping to give operators a leg up in this area, delivering flexibility and deep segmentation so they can offer the kinds of extremely relevant experiences that make guests feel the emotional pull to return, do so more regularly, and spend more when they do. 

It’s about five times as expensive to acquire new guests as it is to retain existing ones, according to the business consultancy ITA Group. Loyalty programs have become critical differentiators for restaurants looking to boost their retention – and the loyalty points these programs allow guests to accumulate are powerful currency. Unfortunately, this also makes programs appealing targets for fraud. The Loyalty Security Association estimates that $3.1 billion in redeemed points are fraudulent. Fraudsters may try to hack into a restaurant’s loyalty system and manipulate points or redeem them illegitimately, access personal information for monetary exploitation, or even create fake programs that mimic (and damage the reputation of) legitimate ones. As a result, it’s important to ensure your program uses layered security measures to protect the information it holds. This includes monitoring each transaction to ensure its authenticity and confirm it comes from a trustworthy source, alerting you to potential breaches, and preventing users from creating fake accounts. At each step in the guest journey, automated checks should authenticate the transaction in a way that protects the security of the system from fraudsters without impacting the seamlessness of the process for valued guests.

​Strengthening your emotional connection with guests
Recent research has found that as critical as it is for businesses to increase their guest loyalty right now, consumer loyalty has been falling. A Salesforce survey found that the portion of consumers who feel emotionally connected to brands fell from 62 percent in 2022 to 54 percent in 2023. As technology has become a necessary part of operations for many restaurants, there has been greater potential for the brand experience to get watered down. As a result, loyalty needs some careful management. Precise, data-driven personalization is at the heart of it. In a Restaurant Dive interview, Rick Camac, executive director of industry relations at the Institute for Culinary Education, said that brands that keep the same rewards without measuring the emotional connection they make with loyalty members will ultimately lose value and customers. Chipotle, whose rewards program grew almost 14 percent to more than 36 million members in 2023, is using a “personalized decision engine” to identify the free items their rewards members can receive through Freepotle, a perk the brand launched last year to drop 10 free food items into rewards program members’ accounts over the course of the year, the report said. Providing guests with such offers not only makes their experience with the brand feel fun and special – it also helps Chipotle collect reams of additional data about the kinds of items rewards members like receiving from them. That data can, in turn, feed their plans for future menu items, specials and targeted rewards offers. Earning loyalty doesn’t have to involve offering large amounts of free food, either. Consider gamifying your program with a rotating list of contests throughout the year. What might your brand do to strengthen its emotional connection with guests?

Earlier this year, when Wendy’s CEO Kirk Tanner announced a $20 million investment in digital menu boards to test strategies like dynamic pricing, the backlash was immediate and fierce. The public’s assumption was that restaurants were going the way of Uber by implementing surge pricing during peak periods. But the controversy overshadowed how restaurants can use pricing flexibility to their benefit – not merely to make money, but also as a means of providing value to guests, making delivery more financially sustainable, and reducing waste. As Food on Demand reports, Shawn Walchef, founder and CEO of San Diego-based Cali BBQ, uses technology from Juicer to adjust delivery pricing on his restaurant’s $15 pulled pork sandwich. He spent more than a year testing how delivery customers responded to paying between $12 and $18 for the sandwich at different times of day. He hasn’t gotten pushback, so now he uses dynamic pricing to help use up excess product in the afternoon (and reward customers who order at that time of day). He plans to test the model with other menu items and locations. In the meantime, he has been able to boost his delivery revenue by $1,300 a month on average. If you’re looking for ways to boost traffic during slow periods in a way that feels like a good value to customers, improve delivery revenue, and use your inventory more efficiently, tech that gives you flexible pricing capabilities could be a useful tool in your toolbox.

The new season brings new food to the menu and will likely inject some new energy into your restaurant as tourism season begins in many parts of the country. As Ashish Alfred, chef and owner of the Alfred Restaurant Group, told Modern Restaurant Management recently, it’s a good time to do some spring cleaning to make sure the back of your house is ready – and to give it a refresh if not. That includes taking a careful look at your menu to ensure you’re focusing on quality over quantity with your options, as well as making sure you’re doing so in a way that is profitable, minimizes waste and simplifies food preparation for your staff. Doing more with less extends to other areas of your business too: Enhance your efforts to cross-train staff to build skills across your team, identify opportunities to automate or simply food preparation and compliance tasks, and review supplier contracts to make sure you’re getting the most you can from your agreements. You may also be able to extend the reach of your business in low-labor ways through online ordering and delivery. Then, think about how you might provide creative, experiential, high-value experiences for your guests in the months ahead. Depending on the range of guests you serve, that could mean planning a series of onsite events that showcase your chef or specialty menu items, or finding new ways to get your food onto guests’ tables in their homes and offices.

​At the height of the pandemic, it seemed like ghost kitchens might be the restaurant industry’s salvation. But once restaurant dining rooms reopened, many of the large brands developing these operations failed as consumers directed their dollars toward businesses whose locations and brands they recognized – not (as many consumers perceived) tech companies that happened to prepare food. But now the remnants of major ghost kitchen brands Nextbite and Kitchen United are being repackaged into something new that may help revive and repurpose ghost kitchens. Fast Company reports that Sam Nazarian, founder and CEO of the hospitality brand SBE, who recently acquired the above ghost kitchen brands, is reassembling them in ways that lean on the individual brands of the restaurants they include and the chefs and other personalities behind them. Further, this reinvention of ghost kitchens is embracing the physical spaces – including grocery stores, food halls and hotels – that consumers trust when they make decisions about the food they eat. Nazarian is then weaving in the strong digital ordering and distribution channels that made ghost kitchens seem so promising in their original incarnation. While it’s early to say if this updated approach to ghost kitchens will pay off, it may set the tone for how restaurants might be able to use them to tap into new income streams going forward – capitalizing on efficiency and scalability but retaining more of the qualities that have always made restaurants desirable to consumers.

Staffing is a perennial challenge in the foodservice industry. So could that be a sign that it needs an overhaul? The National Restaurant Association is studying potential solutions – and increasing numbers of gig workers may be among them in the years ahead. About one-quarter of the restaurant operators surveyed in the association’s recently released State of the Restaurant Industry 2024 report said they would consider using gig workers to supplement staff. It may not be a huge leap, considering many foodservice staff work part time and turnover is frequent enough that many restaurant workers are newcomers. However, the similarity has raised concerns in certain jurisdictions due to potential conflicts around third-party contractors classifying their gig workers as “independent contractors” and excluding them from the benefits and stability of full-time employment, according to a Restaurant Dive report. Are gig workers currently part of your staffing strategy – or could they be in the future, particularly around busy periods when you anticipate needing additional support? How could your tech stack support this change? If your suppliers are also hiring more gig workers, how are they ensuring consistency and safety in their products? How might your approach to training – as well as your approach to hiring management roles—need to change if you had more gig workers stepping in to fill gaps on your staffing schedule?