Tag Archives: restaurants

Illustrating the issues of food, technology, and human interaction at Chipotle

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Chipotle has clearly staked its place as a progressive fast food restaurant (though they would claim they are between fast food and sit-down restaurants) with no antibiotic meat and organic fillings but it too struggles with some basic issues present in today’s economy: how much should companies rely on human employees versus using cheaper technology?

Like others in similar positions, he’s got a wide palette of gee-whiz technologies at his disposal — tablets for ordering, mobile payment systems, in-store ATM-like machines for ordering that replace cashiers. Yet he eschews most of them. He’s in no rush for tech to dramatically change the Chipotle experience at its more than 1,300 stores worldwide.

He hasn’t found the perfect solution yet. And, besides, he likes the human interaction.

That said, Chipotle, based here, happens to have a wildly popular app, a free tool that shows you where the nearest location is and lets you order and pay on the iPhone, iPad or iPod Touch. Nearly 5 million customers have signed up since 2010 and use the app to go straight to the front of the line to pick up their orders…

But that’s about as far as he wants to go. A future where all orders are made digitally?

“I hope not,” Crumpacker says. “I hope the experience of coming into Chipotle and ordering on the line is substantially superior to ordering on the phone. There’s all this communication as you watch what’s being made.”…

Meanwhile, Crumpacker hopes his next in-store tech play is a mobile payment system so customers can shave a few seconds off the checkout process by paying for menu items on smartphones. He’d like to see a standard on all phones that would support his in-store system…

“Consumers go to restaurants to be served,” she says. “The human element is part of the restaurant experience.”

This is an interesting explanation of the restaurant experience: people like the human element of service (though they are clearly paying for it). I suspect this may not really be the human element that people enjoy about restaurants. How many people really enjoy interacting with the waitstaff and other employees versus the opportunity the setting provides to interact with those at the table and to be part of and observe the social scene taking place around them. This could be a big difference between the Chipotle experience and eating at an urban cafe: Chipotles are often located in suburban settings where one may be able to sit outside or look outside but the primary view is of parking lots and speeding cars. In contrast, a full service restaurant offers more of a scene, particularly if located in a more urban setting where there is a mix of activities. Perhaps we need a sociological experiment to tease this out. Such an experiment could be based on a three by two table: fully mechanical food delivery versus human preparation (Chipotle) versus full service and then placed in a more dull setting versus a more happening location.

The article makes mention of Chipotle’s dropping stock price since mid-summer and I wonder if this is what will ultimately force the chain’s hand: if they need to demonstrate higher earnings and labor costs are too high, technology might be the way to close this gap. Or what might happen if Chipotle employees start demanding higher wages and/or more benefits? At that point, perhaps human interaction simply becomes too expensive, a luxury, as consumers might miss being served but would also not like to pay higher prices.

Economist argues best restaurants often in “dumpier locales”

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Over at the Atlantic, George Mason University economist Tyler Cowen explains why excellent restaurants consistently appear in the “cultural wasteland” of suburbs:

Low-rent restaurants can experiment at relatively low risk. If a food idea does not work out, the proprietor is not left with an expensive lease. As a result, a strip-mall restaurant is more likely to try daring ideas than is a restaurant in, say, a large shopping mall. The people with the best, most creative, most innovative cooking ideas are not always the people with the most money. Many of them end up in dumpier locales, where they gradually improve real-estate values…..

I love exploring the suburbs for first-rate ethnic food. Many people consider suburbs a cultural wasteland, but I am very happy searching for food in Orange County, California; the area near San Jose; Northern Virginia, near D.C.; Somerville, Massachusetts; and so on….It is especially common to see good ethnic restaurants grouped with mid-level or junky retail outlets. When it comes to a restaurant run by immigrants, look around at the street scene. Do you see something ugly? Poor construction? Broken plastic signage? A five-and-dime store? Maybe an abandoned car? If so, crack a quiet smile, walk through the door, and order. Welcome to the glamorous world of good food.

Cowen’s argument about restaurants reminds me of another Atlantic piece celebrating “low road” buildings which Brian previously discussed.  It’s not surprising that great work–and great food–often happens in low rent locales like “junky” suburban strip malls and office parks given their lower (financial) barriers to entry and lower operating expenses that free up more cash to flow each month into improving their tenants’ business.

Still, it strikes me that the financial health of restaurants is more location-dependent than for many of the business populating “low road” office parks.  Whereas many office-based business are not dependent on high volumes of foot traffic for survival, restaurants almost invariably are.  (Unless, of course, that particular restaurant focuses primarily on a delivery and/or catering business model.)  A less prestigious restaurant location is a good value for the owner (and likely to survive long term) only if the drop-off in foot traffic/customers due to the “bad” location is more than outweighed by lower rent.

An Arkansas McDonalds that looks like a McMansion

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The term McMansion is tied to the company McDonald’s: the homes are said to have a standardized look and are mass produced. Even though McDonald’s locations don’t usually look like McMansions, a new location in Little Rock, Arkansas combines the two:

The Promenade at Chenal announces the groundbreaking ceremony for the new McDonald’s to be held Tuesday, February 21 at 3:00 PM. This new addition to The Promenade at Chenal marks the first Pad Lot construction since the Shopping Center opened in 2008 as well as the first fast food restaurant for the Chenal Valley area of west Little Rock. Furthermore, this McDonald’s will be one of the first in the state to showcase the new, sleek modernized décor with wooden and graphic vinyl textured walls outlining seating zones designed to appease any customer from the casual visitor to the grab and go. “It promises to be the nicest designed McDonald’s in the State.” — Michael Todd, Vice President Salter Construction, Inc.

See the picture with the story to get a taste of what a McDonald’s McMansion could look like. Here is some commentary about the design:

The picture above is actually Ronald’s place in Independence, Ohio, but in the land of McMansions out in West Little Rock, what will a McDonald’s have to look like to impress? (then again, times are tough, maybe even for the purse-dog crowd) Most importantly: Will those chicken McNuggets taste better under a crystal chandelier than they do under a buzzing tube light? Stay tuned, foodies.

At first glance, this looks most like a bank to me with its columns, brick exterior, and plenty of windows in the front. How much more profitable would the “nicest designed McDonald’s in the State” be?

Despite the criticism of McMansions, I don’t feel like I have seen much criticism of the design of McDonald’s restaurants themselves. After upgrades at many locations in recent years, some McDonalds have upgraded from more tacky seating and a cheaper look to rivaling Starbucks and Panera. Compared to other fast food restaurants, are McDonalds exteriors and interiors better or worse than the competition? On the whole, I would say they are nicer than the average Taco Bell, Wendy’s, Pizza Hut, and Burger King.

Naperville downtown like “Rush street west”?

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In response to the stabbing death that happened in downtown Naperville this past weekend, one city councilman suggests the city needs to enforce liquor regulations more closely:

Councilman Doug Krause pointed out that the city has only shut down one bar for one day in the past five years due to a liquor license infraction, and that an ordinance passed last month will allow bars to stop serving food at 9 p.m.

“It’s becoming more of a Rush Street after 10 o’clock at night — it’s like Rush Street west,” Krause said Sunday night. “It’s been increasing over the last eight to 10 years. There are mobs out there.”…

“We had over 6,000 calls for police service in downtown Naperville last year. The problem is an enforcement problem,” Krause said referring to liquor law enforcement.

Councilman Grant Wehrli disagreed with Krause, calling his response a “knee jerk reaction to an event that is still under investigation.”

This sort of reaction is something I was expecting even though Naperville is a relatively safe place.

At the same time, this does lead to a larger issue that I hinted at on Sunday: how Naperville wants to balance being a cultural and entertainment center while also remaining family-friendly. On one side, having a lot of bars in a suburban downtown is not usually considered family-friendly. Particularly on warm summer nights, there are a lot of people who congregate in downtown Naperville late into the evening, including many teenagers and families, to partake of music, shopping, the Riverwalk, and family restaurants and eateries. This sort of violence is not clearly not helpful to maintaining this environment but even public drunkenness is not terribly conducive to this.

On the other hand, having a thriving restaurant and bar district can bring in a lot of tax revenue. Instead of residents going elsewhere (perhaps downtown Chicago even?), they spend their money out in downtown Naperville. Lots of suburban communities would love to have the problem that Naperville has had of not having enough parking spaces for all of the downtown visitors or having the kind of restaurants that exist in most suburbs only in shopping centers. The restaurants and bars help attract other businesses.

So how does a well-respected suburb balance these two interests? One of the worst things that could happen to the downtown is that it is branded “unsafe” and people turn away. At the same time, when there are plenty of people around and there is alcohol involved, it is really hard to stop everything bad from happening.

What to do when a quiet suburb may have too many downtown bars

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Suburbs want their downtowns to be full of businesses, particularly restaurants, because they enhance the community’s tax base and provide a more vibrant atmosphere. But what happens when a suburb has too many downtown bars? Here is the situation in St. Charles, Illinois:

Simpson wants to open a business called the Alibi Bar & Grill at 12 N. Third St. Aldermen told Simpson on Monday that they welcome the “grill” part of his plan, but they aren’t big fans of the “bar” part. Simpson’s plan envisions a “restaurant-style sports bar that will serve American-style food, cocktails, beer and appetizers.” He plans on having live entertainment at the establishment as well. He’s even agreed to close his doors at midnight on Friday and Saturday nights just to win a more favorable view of his liquor license application. But aldermen on the city council’s government operations committee weren’t sold.

“I really don’t think St. Charles needs more bars,” Alderman Cliff Carrignan said…

[St. Charles resident] Amundson lives in the downtown area and said the family-centered community he moved to has evolved into a weekend destination for young people on drinking binges…

Amundson’s comments spurred the rest of the conversation about how many taverns is too many in the city. Staff estimated there are between 50 and 60 restaurants in the city that have liquor licenses. Alderman Jim Martin has long crusaded against city’s tavern density.

St. Charles is a relatively wealthy and quiet yet growing community. While having new business is good, the issue of bars clashes with the community’s character: there is a line between being “family-friendly,” which I think many suburbs would wish to be known as, and having a vibrant restaurant scene, which I think many suburbs would also want. This is the same sort of issue that was brought up in Naperville late last year with a request from Show-Me’s to open a restaurant.

A community could deal with this in a few ways but there are two primary methods of control: zoning and liquor licenses. Certain uses, like tattoo parlors, are often not allowed, but suburbs can go even further to restrict the opening of new banks (Wheaton in more recent years). Restaurants are quite desirable for small downtowns as they can bring in people from outside the community and patrons might also spend money elsewhere in the downtown. At its best, a downtown might create a downtown entertainment district that includes food and entertainment (music, movies, theater, etc.). It sounds like those who are opposed to more bars in St. Charles are not opposed to more restaurants so perhaps the businessman will simply have to drop his request for a liquor license (though this would likely impact his opinion of the profitability of his venture).

More broadly, it sounds like St. Charles needs to make some decisions about what exactly they want in their downtown. Either path, toward families or food and entertainment, could work out but addressing the issue on a case-by-case basis will quickly get frustrating.

More Americans eating at home

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One of the questions to emerge out of this recent recession is which pre-recession patterns will return once the economic climate improves. One report suggests that although spending levels have increased again, eating at home might be a more permanent pattern:

Restaurants traditionally have led other types of businesses out of a recession. This time, they’re at least a year and a half behind retailers. Sales of clothing grew 5 percent last year and autos rose 11 percent, as Americans started feeling better about their finances. At casual sit-down restaurants like Outback Steakhouse, the increase was just 1 percent. Some analysts say that could be the new norm…

Americans lead the world in restaurant spending. About 44 percent of food dollars are spent outside the home — a figure that started rising sharply in the 1970s, as more women joined the work force. Full-service restaurant revenue rose 5 to 7 percent a year in the decade leading up to the Great Recession, which halted growth. Over the next decade, visits to restaurants are forecast to increase less than 1 percent a year, according to the NPD Group. That’s less than the population will grow.

Instead of handing their money over to mediocre eateries during the week, people are saving up for the occasional nice meal, says Stifel Nicolaus analyst Steve West. Meanwhile, cooking has become hip, says Rick Smilow, president of the Institute for Culinary Education, where registration for recreational courses was up 10 percent last year.

It would be interesting to see more data on this: how many of these meals at home are made out of mostly fresh ingredients? What kind of food are people spending money on – taking that restaurant money to buy more expensive items or trying to eat on the cheap? How much less are people spending on food overall as they eat out less?

The perception about eating at home might be crucial. The idea that cooking is now “hip” could be tied to a number of factors including more upscale grocery stores (the equivalent of shopping at Whole Foods versus Wal-Mart), a number of celebrity chefs, and around-the-clock cooking shows. Eating at home may be good for the financial bottom line but it will appeal to a lot more people if it is cool.

Efforts to revive local shopping malls; how about an ice skating rink?

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The recent economic downturn has severely affected many retailers, especially shopping malls. One local mall, Charlestowne Mall in St. Charles, has been hit particularly hard and is looking for ways to bring in more shoppers. One idea: build an ice skating rink.

Barring an eleventh-hour change of heart, 94 employees at the Sears store at Charlestowne Mall in St. Charles will lose their jobs in two months. But the mall management and city officials hope to coax the retail giant to stay.

And the city and mall owners see hope in new business coming to Charlestowne, including an ice arena…

There might be reasons to be optimistic about the mall. Anchor stores Kohl’s and Von Maur both own the property they operate, making them less likely to leave. Aiston said the mall also disclosed it’s in negotiations to bring two or three new businesses to the mall, including a restaurant.

In addition, the mall may soon have a new headline attraction. Aiston and Kekatos said the city is reviewing plans the mall owners submitted to build an 18,000-square-foot ice arena at the mall to revive foot traffic.

“What I really want the public to know is our new ownership is fabulous,” Kekatos said. “You have to remember it’s only been going on seven months since they’ve purchased the mall. We’re updating the interior and the exterior of the mall. The community, the people in it, they just don’t understand that it takes time to do all this.”

This seems to be a common strategy for shopping malls: attract new kinds of businesses that will bring in a steady flow of potential shoppers. The restaurant strategy has been a common one – it moves malls beyond the world of the shopping mall food court with its quick food and may bring in a crowd with more time and money. But bringing in a shopping rink hints at another area of potential uses: recreational uses. Could the shopping malls of the future include things like ice skating rinks, gyms, climbing walls, and more? If so, this could help further transform malls from shopping spaces to community centers.

It is also interesting that the quest for developers and mall owners to add uses to shopping malls mirrors the efforts of many downtowns who have also been interested in increasing foot traffic. Of course, the shopping mall is often blamed for helping to kill off many downtowns but perhaps they are both now in the same boat. Are there enough retail and recreational and restaurant businesses to fill all of the space in shopping malls and downtowns?

Ranking the Big 4 in Chicago deep-dish pizza

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Recently, my wife had her first taste of Lou Malnati’s deep-dish pizza. With this pizza excursion, she and I have eaten deep-dish pizza in the last few years from all four of the big Chicago pizza restaurants: Uno, Giordano’s, Gino’s East, and Lou Malnati’s. Here is my ranking of the four pizza places (along with my wife’s thoughts as well):

1. Uno – and I’m referring to the Uno and Due locations just off Michigan Avenue in Chicago (and not the commodified version found all over the world). In my mind, this is the real thing: thick, greasy, and substantial and served in nearly claustrophobic spaces. On the downside (as my wife will point out), it is greasy, can disrupt your stomach, and is quite unhealthy. Still, I think if you had to have one taste of Chicago’s deep-dish pizza, this would be the place – and just make sure you don’t eat too much. (And, if I remember correctly from some things I have read, Uno was first and some of the other pizza places were founded by people who honed their craft here.)

2. Giordano’s. The taste of their pizza is different compared to Uno’s – it is lighter and sweeter. According to my wife, this is the number one pizza place because of its bready crust and the best sauce and cheese. A good pizza overall.

3. Gino’s East. Similar to Giordano’s but lacking in cheese and crust. And how come the customers can’t write on the walls anymore?

4. Lou Malnati’s. They have the thinnest pizza of the four, the cheese tastes a little different (perhaps a hint of Swiss?), and the sauce is lacking.

I can drive to each of these four restaurants within 45 minutes and they all seem to be quite busy on a Friday or Saturday night. I’m sure there are others with different opinions- Chicago pizza hasn’t exactly caught on big in other places and plenty of New Yorkers will tell you about their own pizza. But, it does seem like there are a lot of Americans that just like pizza in general and there is plenty of pizza to go around…

Don’t just ban Happy Meal toys; American food culture needs to be changed

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After San Francisco recently moved to ban the toys in Happy Meals (by tying the ability to include toys to certain nutrition benchmarks),  Josh Ozersky argues that more than just banning Happy Meals is needed: American food culture and what foods it says are good needs to be changed.

No, the problem with the ban is that it doesn’t go far enough. America’s tots aren’t getting supersized simply by eating Happy Meals…University of São Paulo professor Carlos Monteiro makes the case that “the rapid rise in consumption of ultra-processed food and drink products, especially since the 1980s, is the main dietary cause of the concurrent rapid rise in obesity and related diseases throughout the world.” And reversing that trend will be a lot harder than making Happy Meals a little less happy.

But still, you have to start somewhere, and I understand why the San Francisco supervisors picked Happy Meals as their beachhead…

Again and again, efforts to promote fresh fruit and produce in low-income urban areas have failed for the simple reason that Americans have been brainwashed. We have been conditioned, starting in utero, to prefer high-fat, high-salt, high-sugar concoctions rather than their less exciting, more natural culinary cousins…

Why? Because as Americans, we like highly processed food. It was invented to please us. Cheap flavor bombs will always trump healthier alternatives. Dangling a Transformer or Beanie Baby or some other toy du jour in front of a kid may help balance the playing field at least a little. But why can’t cheap, processed food be made healthier? Is that really impossible? Or is it just too expensive?

Ozersky doesn’t quite come out and say it but he is suggesting that Americans need to radically rethink their diets and food choices. This is not a matter of just eating less fast food but thinking about all processed food and why we eat it rather than more natural food. As other writers like Michael Pollan have pointed out, other cultures make different food choices where natural is the norm and meals are events that then five or ten minute periods where Americans try to relieve their hunger while also getting essential nutrients. American food habits are tied to a whole host of other phenomenon including cars (fast food), ideas about efficiency, technology (eating in front of the TV, microwaved food), ideas about how expensive food should be, and more. And these are patterns that start young.

The question of whether all of this could be changed through governmental intervention or through other means is another controversy for another day.

(Another thought: how come McDonald’s is the most common target of such actions? It is kind of like the attention that Walmart draws – neither McDonalds or Walmart are the only games in town and yet their size and reputation tends to draw the most attention.)

Zagat rates fast food and full service chains

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Zagat, the restaurant rating firm, has recently released results of a survey of 6,500 fast-food fans. The survey covers both fast food and full-service chains and has a variety of ratings including best burger and best value.

This quantification of the fast food and full service chain industry is interesting. Such food is considered by some to barely be real food. Zagat’s reputation is generally based on reviewing fine restaurants, not popular chains. So is the goal to help Zagat reach a broader audience? This is an example of an odd pairing of high-brow and low-brow culture.

After observing Dairy Queen’s 5th place spot in the popular quick-refreshment chains, one commentator says, “Of course, I can’t help but wonder: will we begin to see “Zagat rated” stickers adorning the take-out window at Dairy Queen?