APT SVP Jonathan Marek discusses a key challenge for restaurants: isolating the incremental impact of each action from the noise inherent in day-to-day operations.
Many restaurant organizations make menu rationalization decisions based on basic financial metrics like item sales and number of checks. However, incorporating more robust check- and guest-level metrics into the analysis can help restaurants make more profitable decisions. Five important metrics for executives to consider when identifying which items to rationalize are:
- Item Profitability: Start by identifying items that have low sales and margin. With this list, executives can begin digging deeper into the analysis.
- Attached Sales / Margin: Consider the sales and margin associated with checks containing each item. If an item has low sales and margin on its own, but high sales and margin in the rest of its check, restaurants could be losing much more than they initially realized if they delete that item.
- Item Loyalty: Focus on items with lower item loyalty to increase chances that demand will transfer to other, similar items (e.g., guests who used to order a Grilled Salmon sandwich might switch to a Grilled Chicken sandwich).
- Guest Lifetime Value: Make sure to recognize your best guests. Take into account not only item loyalty on its own, but also which items are ordered by your most loyal guests to reduce the risk of losing those guests.
- Guest Satisfaction: Encourage guests to shift to higher satisfaction items by removing those items with lower satisfaction.
Click here to read about how one restaurant evaluated these metrics to create a new menu to build guest loyalty.
APT SVP Jonathan Marek says that fast casual has been the single most important secular trend in the restaurant industry. Watch this video to hear his thoughts.
APT SVP Jonathan Marek discusses APT’s software suite for restaurant organizations, which includes Test & Learn, Menu Analyzer, and the APT Index.
In a recent article for Chain Store Age, APT SVP Jonathan Marek discusses how digital ordering is impacting the restaurant industry. He also discusses questions that arise as a result of digital ordering, and how Test & Learn can help restaurants confidently answer these questions. Click here to read the article.
To “decide” can be interpreted as “picking one option and killing off all others.” In business, doing this right has large rewards and getting it wrong has severe consequences. While executives have always made decisions, increasing amounts of data, sophisticated consumers, rapidly evolving technology, and disruptive competitors, are fundamentally changing the art and science of decision-making.
APT partnered with the Economist Intelligence Unit to study how decision-making is rapidly evolving across various industries and geographies. The resulting report addresses tough and important questions, such as:
(1) How do executives blend intuition with data? Are companies allowing executives to trust intuition?
(2) How are executives using data in decision-making when the data is counter-intuitive to their beliefs?
(3) With so much data available, which data should executives consider? And, how should they best incorporate it in decision-making?
The report will be released on June 5th in London. Please email info[at]aptmail.com to be the first to get a complimentary copy of this actionable report written by the Economist Intelligence Unit.
GrubHub’s recent public offering and rapidly growing user base (~4 million active users) is generating increased interest in understanding how online ordering will impact the restaurant business. APT’s recent survey of our restaurant customers shines light on the increased attention restaurants are placing on online ordering: restaurants reported that online & mobile ordering comprised 31% of all tests within operational initiatives in the last year. (more…)
In a recent All Analytics article titled “Red Robin Plates Up Big-Data Insight,” Chris Laping, CIO at Red Robin, discusses how the gourmet burger chain is using APT’s Test & Learn software to understand the incremental impact of large dollar investments across their business. Click here to read the article.
“Rather than go it alone on big-data analytics, Red Robin has partnered with a ‘really smart company to help do that test-and-learn stuff,’ Red Robin CIO Chris Laping said… The ‘really smart’ partner helping with the test-and-learn is Applied Predictive Technologies, or APT, a cloud-based predictive analytics company that’s built up a discipline and set of analytics tools for Red Robin.”
Applied Predictive Technologies (APT) today announced that U.S. restaurant sales for the month of February fell [-0.6%] nationwide. But despite the overall February decline, the APT Index, which compares this year’s sales to the same period last year, indicated a “polar thaw” as increasing temperatures were followed by an increase in sales comps.
In the first half of February (2/1 to 2/14), the average temperature was 35°F and sales comps were [-2.2%]. However, in the second half of the month (2/15 to 2/28), average temperature climbed to 43°F and sales comps grew to [+0.9%].
The APT Restaurant Index enables restaurant executives to understand their “true comps.” Instead of simply looking at year-over-year changes, restaurant organizations can now compare each of their location’s sales to restaurant performance in the area surrounding their locations. These insights enable executives to understand if their restaurants are actually under- or over-performing, adjusting for local market factors outside of the control of decision-makers.
Click here to read the full story.
A recent Wall Street Journal article, “The Secret of Selling the $5 Footlong,” discusses how marketing innovation is fueled by a consistent process of experimentation. In the article the CMO of Subway, Tony Pace, says that staying ahead is “all about testing and learning.” He adds, “there is plenty of data, but big data doesn’t mean you get big insights. Companies have to sift through the data and come up with hypotheses and test them.”
Subway is a long-time, valued APT client. They, like dozens of other restaurants, leading retailers, banks, hotels, telecom companies, and manufacturers, leverage Test & Learn to make faster, more accurate decisions.