10% of all restaurants have closed since the beginning of the pandemic in 2020, including hundreds of locations of major chains, according to food industry research firm Dataessential’s new report.
No sector of the industry was safe. Closures affected fast food, fast casual, casual, and fine dining. Subway closed more stores than any other large chain examined by Dataessential, closing out the period with 1,557 fewer stores, a 6.6% loss. Dunkin’ lost a net 559 stores, the report said.
Even fast food staples were hit by the pandemic. Burger King closed 319 locations, while McDonald’s closed 173. However, that only amounts to a 1.2% loss for McDonald’s, which still has well over 13,000 locations. Baskin Robbin’s, Hardees, and Steak N Shake each closed restaurants, while Little Caesar’s bucked the positive trend for pizza chains this year, closing 120 locations.
Some restaurants did manage to open new locations. Domino’s came out on top, opening 358 new stores. This isn’t necessarily surprising: pizza and wings were hailed as early winners in the pandemic as Americans increasingly ordered from brands that were already set up to accommodate delivery, like Papa John’s and Wingstop.
The rest of the pizza industry saw huge losses, up to $30 billion in March and $50 billion in April. The trend doesn’t apply to all pizza chains, though, as Little Caesar’s shows.
Starbucks, Taco Bell, and Chipotle all also all ended the year with over 200 additional stores apiece. Each of these chains has invested in drive-thrus throughout the pandemic.
Starbucks is making efforts to improve drive-thru efficiency with digital drive-thru screens for ordering and handheld devices for baristas to input orders on. Taco Bell cut more than a dozen items in 2020 to make drive-thru lines move more quickly, and sales grew as a result. Chipotle is opening hundreds of Chipotlane drive-thru lanes, with plans to more than double locations.
Most restaurants that added locations have embraced drive-thrus and mobile ordering, while chains that didn’t suffered, though this doesn’t explain every chain.
A recent tweet from Burger King UK that read “women belong in the kitchen” on International Women’s Day left a bad taste in the mouth of social media users.
It was part of a campaign intended to promote the chain’s launch of an initiative to help increase the number of female head chefs in restaurants. But the initial tweet, which was part of a larger thread, was met with anger and confusion from thousands of social media users, with some describing it as tone-deaf.
As anger mounted, the chain said it was a “mistake” to not include the entirety of the initiative in its first tweet. It later apologised in a follow-up tweet, saying: “We hear you. We got our initial tweet wrong and we’re sorry.”
Read on for other examples of brand campaigns that went off the boil.
Pepsi’s “Live for Now” ad was arguably one of the most controversial ad campaigns of the decade. In it, supermodel Kendall Jenner took part in a protest and handed a police officer a can of Pepsi, as reported by Sky News. The ad was met with scathing criticism as it was perceived to be trivialising social justice movements, such as the Black Lives Matter protests, as well as capitalising on them.
Luxury department store Bloomingdales faced tremendous condemnation back in 2015, when they released an advertisement that appeared to be inspired by date rape in their holiday season catalogue, per The Wall Street Journal.
The ad featured a woman laughing with her head turned away while a sharply dressed man stared at her. The ad copy read: “Spike your best friend’s eggnog when they’re not looking.”
Consumers took to social media to criticise the inappropriateness and creepiness of the ad, which prompted the firm to issue a public apology via its Twitter account.
“We heard your feedback about our catalog copy, which was inappropriate and in poor taste. Bloomingdale’s sincerely apologizes,” the company tweeted.
Appliance manufacturer, KitchenAid set themselves up for a complete corporate Twitter fail, after tweeting a joke about former president Obama’s dead grandmother during the 2017 presidential debate, as Insider previously reported.
“Obamas gma even knew it was going 2 b bad! ‘She died 3 days b4 he became president’. #nbcpolitics”.
The tweet was incredibly offensive, which prompted the company to immediately delete it and issue an apology for their actions.
In the summer of 2015, more than 700,000 people called on department store chain Macy’s to cut ties with Donald Trump, who was president at the time.
Macy’s began selling Trump’s menswear clothing including, $70 dress shirts, $65 ties, cufflinks, and watches in 2004, as reported by Fortune.
The decision to terminate its relationship with the businessman-turned-president came after he referred to immigrants from Mexico as “killers and rapists,” CNN reported.
Lingerie and clothing retailer Victoria’s Secret was heavily criticised for an ad that featured the slogan “The Perfect Body.”
The tagline, which referred to the brand’s Body’ lingerie line, featured images of Victoria’s Secret Angels on the company’s website and stores in the UK.
The ad sparked the Twitter hashtag #iamperfect as it played on women’s insecurities and sent out damaging messages about female body images, The Huffington Post reported.
Good morning and welcome to Insider Advertising for March 9. I’m senior advertising reporter Lauren Johnson, and here’s what’s going on:
First, our reporter Ashley Rodriguez is hosting an hour-long chat with execs from Molson Coors, Roku, and UTA Marketing about the future of advertising-supported TV tomorrow. Register for the event here.
The fast-food chain tweeted the message on International Women’s Day as part of its launch of an initiative to help increase the number of women in head-chef roles. But many on Twitter said the company’s initial tweet, which was followed in a thread by an explanation of its initiative, was tone deaf. Some told the Burger King UK account to delete the tweet, and others vowed to not eat at the chain anymore.
Following the backlash, the company said in an emailed statement to Insider that, “Our tweet in the UK today was designed to draw attention to the fact that only a small percentage of chefs and head chefs are women. It was our mistake to not include the full explanation in our initial tweet and have adjusted our activity moving forward because we’re sure that when people read the entirety of our commitment, they will share our belief in this important opportunity.”
Global Chief Marketing Officer Fer Machado said on Twitter the company is “indeed sorry” about how the tweet came across. “The intention behind the activity is actually good. Taking it down would give even more attention to it. Believe it or not I deeply care about doing the right thing. Will do better nxt time,” he said.
In its emailed statement, the company said it is committed to helping women break through the male-dominated culinary culture in the world’s fine dining restaurants. It’s doing this by creating the Burger King Helping Equalize Restaurants, or HER, scholarship to support employees pursue a degree in culinary arts.
“This is a start in doing our small part to help women in the culinary field achieve their ultimate goal,” the company said in the press release, adding that women occupy only 7% of head-chef positions in restaurants.
The messaging wasn’t the work of a social media manager going rogue. It’s tied to the chain’s Monday launch of a new initiative to help narrow the gap of women in head chef roles, but the messaging struck people on Twitter and Facebook the wrong way.
Some expressed the tweet was tone-deaf on a day meant to celebrate women; others said they wouldn’t eat at the restaurant anymore, and others joked at how the fast-food chain’s marketing team thought the message would be a good idea.
One of Burger King’s competitors criticized the word choice. A Twitter account associated with KFC said Burger King should have deleted the tweet after sending it. The restaurant replied, “Why would we delete a tweet that’s drawing attention to a huge lack of female representation in our industry.”
Gender stereotypes are still alive today. In fact, people are even more likely to believe in traditional “female” roles, like cooking and cleaning, in today’s world as they were decades ago, according to a 2016 report from Women’s Health Magazine.
In her own response to the tweet, Chelsea Peretti, a comedian and actress from “Brooklyn Nine-Nine,” said “Burger King belongs in a trashcan.” Another unverified tweeter said the same thing. Still, the Burger King UK account added 10,000 followers Monday following the tweet.
On Facebook, people largely reacted with the laughing emoji. Several commenters said those who didn’t find it funny were soft, and others said there should have been a better way to promote the new initiative.
Burger King did not immediately respond to Insider’s request for comment on the tweet.
Burger King echoed it’s “women belong in the kitchen” messaging in a bulletin and a press release, which added that “they belong in fine dining kitchens, food truck kitchens, BK Restaurant kitchens, award-winning kitchens, casual dining kitchens, and ghost kitchens.”
The fast-food chain said it’s creating the Burger King Helping Equalize Restaurants, HER, scholarship to support female team members pursuing a degree in culinary arts. “This is a start in doing our small part to help women in the culinary field achieve their ultimate goal,” the company said in a press release, adding that women occupy only 7% of head chef positions in restaurants.
Narrator: This is a No. 3 from McDonald’s: a burger, fries, and a drink. It costs $11 in New York City.
Fast food is supposed to be cheap and convenient, but do you ever find yourself spending more on fast food than you expected to?
You’re not alone. According to one study, Americans spend about $1,200 on fast food every year. Places like McDonald’s and Burger King do everything in their power to get you to spend more money, and it turns out fast food isn’t as cheap as you think.
1. The menus.
Fast food is all about the deals. Value meals, combos, coupons – oh my. But the seemingly simple menu actually hides most of the options. Compare a fast-food menu to a fine-dining-restaurant menu. The restaurant menu is simple and not very stimulating, but the fast-food menu is a noisy mess of options and categories, and fast-food restaurants grab your attention with bright reds or oranges along with big appetizing photos of their food. There’s a hierarchy. The pictures are big, but the prices are small. They keep your attention on the items that cost more by showing these really big on the left side where you start reading. You’re not wondering if that burger is worth $6, you’re just looking at those big juicy patties.
Hans Taparia: Food pictures, they light up the brain, you know, particularly when you’re hungry. Large food pictures for a food company are key.
Narrator: That’s Hans Taparia. He’s a health-food entrepreneur and a professor of business and society at NYU.
Hans Taparia: The playbook has been around for a while, I would say since the ’80s, which has been centered on simplicity, cheap, and bold and bright.
2. The pricing format and dollar menu.
Narrator: Fast-food restaurants use other tricks too, like not showing a dollar sign or using a 9.79 or 0.89 pricing format. Pretty much $10, but you still think it’s $9 because you read left to right. But what about the dollar menu, right? Well, dollar and value menus do exist, but they’re often small and far off to one corner where they are harder to see.
Hans Taparia: And if you buy multiple items off the value menu, it won’t necessarily be cheaper than a Happy Meal. So it’s not necessarily less profitable for them, but it accomplishes two things. It keeps the consumer coming, and it’s catering to a consumer that is increasingly poorer in the case of these conventional fast-food outlets.
3. The combo.
Narrator: And even though fast-food menus are big, their confusing layouts make it difficult to find exactly what you’re looking for. It’s easiest to read the menu when you’re close to the counter. But then it’s time to order. The pressure is mounting, and you just pick that big, bright, juicy No. 3, and that No. 3 is where the real secret of the menu lies: the combo. The star of the menu is the combo meal. You can order an entree, a side, and a drink just by saying one easy number. It takes a lot less time to order the No. 6 than a 10-piece nugget, medium fry, and a medium drink, but have you actually done the math to see if that combo is saving you any money? Take McDonald’s. If you buy a No. 3, it costs $10.39, but if you were to buy the Double Quarter Pounder, medium fry, and medium drink, it costs $10.48. You’re only saving 9 cents, and often you’ll end up with things you didn’t even want in portions that are way bigger than what’s healthy.
Hans Taparia: And creating this perception, which is quite real actually, that the per-ounce cost of something bigger is lower, and so I’m just getting better value for my money, forget the fact that I’m buying 32 ounces of soda, which has half a cup of sugar.
Narrator: The convenience of ordering a preselected meal gives fast-food restaurants control over what you order. Combine this with multiple size options and cheap upgrades, and it’s hard to walk away with a small in every category.
When was the last time you went to a place like Taco Bell and just bought one taco? Fast-food restaurants make more money from customers buying multiple items. Items like soda have a much higher profit margin compared to burgers, so fast-food companies do everything they can to get you to buy a drink.
5. What you want, when you want it.
They’ve added things like 24-hour locations and all-day breakfast to make sure you can get whatever you want whenever you want it. If you think you have more control at an ordering kiosk, you’re wrong. According to McDonald’s CEO Steve Easterbrook, customers spend more on average at kiosks because they linger longer. Guess what those kiosks also have. Lots and lots of pictures. And that’s just the tip of the, um, Frosty.
6. Free food.
Fast-food companies are experts at getting customers in the door. They advertise the most outrageous deals on signs, posters, and TV commercials. They can get you in the door for some “buy one, get one free” nuggets, you’ll probably buy a drink too. Oh, look! You can make that a meal and add fries for just a dollar more. Companies also use brand tie-ins like Doritos Locos Tacos and coupons that expire in a week, like the ones you may have seen on the bottom of your receipt, not to mention app reward points or special daily deals found only in the app, just like the old-fashioned punch card. You’ll eat at a restaurant more often if each purchase brings you closer to free food.
Hans Taparia: Any one thing in isolation itself may not have a huge impact. The power of marketing is when you overlay things.
Narrator: But there’s a deeper issue here. Fast food isn’t as cheap as it used to be. According to Bloomberg, the average price of a fast-food burger has increased by 54% in the past decade, outpacing fast-casual and fine-dining restaurants. But fast food is sometimes the only option in low-income food deserts, and your environment has a big impact on your health and weight.
7. The more affordable option?
Healthy fast-casual offerings are often so much more expensive than fast food that they no longer target the same demographic, especially if you’re feeding a family. KFC will give you a lot more food per dollar than an organic-salad chain. Fast-food restaurants are able to lure consumers into spending more money on large unhealthy portions because it’s more affordable than healthier options.
Fast food can be cheap and convenient, but you have to fight off all the psychological tricks that are engineered to get you to spend more money. You shouldn’t be paying a premium for low-quality unhealthy food.
EDITOR’S NOTE: This video was originally published in March 2019.
The lockers vary in size, and they can be different temperatures, too. Some are heated, while others are chilled, to keep food at the right temperature until customers can collect them. More high-tech models even use UV light to kill bacteria.
Fast food restaurants have rolled out food lockers during the pandemic
Though some restaurant chains already had them in the works pre-pandemic, many have pivoted to food lockers over the past year, as they focus on new methods for delivery and collection.
Customers can order food in advance online or via the restaurant’s app and then pick it up from the locker.
Food delivery drivers can also use the lockers to collect orders.
Restaurants are experimenting with different ways for customers to unlock the lockers. In some cases, the lockers have a pinpad or touch screen. Cstomers need to enter a code sent to them when they placed their order. Other lockers can be opened by scanning a QR code or even by replying to a text message.
Food lockers can also help facilitate in-store social distancing during the pandemic. They remove the need for customers to interact with restaurant staff when it’s not necessary. Many restaurants also let customers select a collection time when they place their order, which reduces the amount of time they spend waiting in the restaurant and the number of customers waiting there at the same time.
KFC trialed food lockers at four restaurants in Japan in October, and it also uses similar lockers at its dubbed “restaurant of the future” in Moscow. The automated store, which involves minimum human contact, uses conveyor belts and robots to put food orders in lockers at the front of the store.
Customers retrieve their food using a code, and can pay either by card or using a biometric facial recognition system.
North Carolina-based chain Rise Southern Biscuits & Righteous Chicken is rolling out heated food lockers in some of its stores, too. The lockers are stacked on top of one another with individual heating systems.
“We just want people to feel safe, regardless of how they perceive the virus,” Rise CEO, Tom Ferguson Jr., told Insider. “Not only do the food lockers provide a contactless transaction, they also add convenience. The biggest plus for us at Rise is it’s freed us to focus on the culture in our kitchen that makes running a restaurant worth it.”
Though the trend has been accelerated by the demand for contact-free collection, food lockers aren’t a new phenomenon. Some fast food outlets were considering them before the pandemic.
Back in November 2018, Dunkin’ said it was testing pickup lockers at its innovation lab. After placing an order for pickup on the Dunkin’ app, users would simply go to the lockers, scan a QR code, grab their order, and go. Dunkin’ said it envisioned locating the lockers in busy stores in cities like New York, so that customers on-the-go wouldn’t have to wait on any lines.
Wingstop said in January 2019 it was looking to introduce the lockers to cut labor costs, noting that 75% of its business was collection.
Automats are like vending machines for hot food
Before restaurants started using them for customer pickup, automats were already using rows of food lockers to sell hot food. The world’s first automat was opened in Berlin in 1895, though it looked very different to modern ones.
With a notable presence in countries including Spain, the Netherlands, and Japan, automats are like self-service vending machines where customers insert coins or use their card to buy hot food.
Individual food lockers sit on top of each other and are lined up in rows. Staff top them up throughout the day.
Automats require fewer employees and a smaller real estate footprint than standard fast food restaurants.
The popularity of automats has since dwindled in the US, and Horn and Hardart’s last NYC site closed in 1991. As software and hardware progressed, San Francisco chain Eatsa developed a chain of more high-tech alternatives, but it closed its doors in July 2019, too.
The pandemic, however, is giving automats a new lease of life. Some companies are trying to innovate beyond the traditional automat models, and “the time certainly seems right,” according to Tim Sanford, editor of trade publication Vending Times.
While automats typically sell pre-made food, a new automat restaurant opened in New Jersey in 2021 that makes food to order. Automat Kitchen has a patented ordering and pick-up system that delivers items to customers through a wall of lockable LCD boxes.
Customers order in advance via its website and get texted a code when the order is ready. Rather than enter this code into the locker, they can also reply to the text message to open the locker – making it an entirely touch-free experience.
The Boston Dumpling Shop is rolling out new-look automats, too. Its 24-hour locations, set to open in the spring, will let customers control their orders using their phone. The sites will range in size from 500 square feet to 1,000 square feet, and the lockers light up in blue for chilled items, and red for hot to-go orders.
Front- and back-of-house automation mean the restaurants could roughly halve their labor costs, developer Stratis Morfogen told Insider’s Nancy Luna. The company plans to open a site at the Oculus at the World Trade Center with mega-mall developer Westfield, Morfogen said.
Food lockers are being brought to residential buildings, workplaces, and university campuses, too
Food lockers aren’t limited to just restaurants.
Alchemista, which formerly provided corporate catering to clients including TripAdvisor and Moderna, has pivoted to providing patent-pending food lockers. The company is currently focused on expanding them to residential buildings, CEO Christine Marcus told Insider, but also plans to roll them out to offices, sports centers, and university campuses.
You scan the QR code to unlock the locker and then pay via your phone, meaning you don’t even need an app to use them – and the whole process takes just four seconds, Marcus said.
Before the pandemic, companies were trying to boost their corporate perks with offerings such as free meals for staff. Marcus said these trends would continue after the pandemic but companies might pivot to food lockers rather than on-site catering to reduce their real estate footprint.
It will be a “very different world when people go back to work,” she said.
Kevin Reilly: Fast food is cheap and convenient. But hidden in between the burgers and tacos are some “healthy” options: salads, grilled chicken, yogurts, oatmeal, power burritos. Doesn’t sound too bad, right? I spent a week eating nothing but these “healthy” fast foods and I lost six-and-a-half pounds. But even though I lost about a pound a day, it didn’t really go well.
I live in New York City, a place with every possible food you could want. Eating healthy here, it’s a breeze. But across America, there are more than 200,000 fast food joints, and they’re bringing in more than $200 billion a year in sales. And no matter where you go, you’re never far from a place like McDonald’s or Taco Bell. But in recent years, consumers want better, healthier choices, and the traditional fast food places have been losing customers to those fast casual healthy options.
The rules were pretty simple: Eat every major meal at a national fast-food chain and stick to the healthy options. McDonald’s, Wendy’s, Burger King, Taco Bell, Dunkin’ Donuts, Subway, and Chick-fil-A; nothing but them for a week. Yeah, I lost almost seven pounds, but let’s take a close look at the numbers.
On a normal day, I’m eating around 2,500 calories. An adult man should be having about 2,400 to 2,600 calories a day. But on this fast food plan, my calories plummeted. Most of these meals came in under 400 calories, and that was one of my first problems. I’d eat and just a couple hours later, I was starving. And I had days when I didn’t eat more than 1,000 calories.
Now, some of these meals were really good. My favorite was this grilled chicken market salad from Chick-fil-A. It had blueberries, strawberries, apples; it was delicious and it was actually healthy. However, a lot of the other salads from Burger King, McDonald’s, and Wendy’s were loaded with salt, often more than 50% of what I needed for the entire day, from a salad. In fact, excess salt was a problem the entire week. I thought I had hit the jackpot with Taco Bell’s al Fresco menu. They take off all the cheese and mayo-based sauces and replace it with lettuce and pico de gallo. One night I got tacos, another night I got a power cantina burrito, and these were meals with more protein than usual. So, I felt like I was getting enough food. They were good, too good. It was all salt. In fact, just one burrito had almost as much salt as I needed in just one day. The American Heart Association says we should limit our sodium to about 2,300 milligrams a day, but the ideal is closer to 1,500 milligrams a day, especially for a person like me with high blood pressure. But if you look at my sodium intake, it was high every day, yet I was barely getting the calories I needed. If I wanted to keep the sodium down, I was starving. If I wanted to feel full, salt through the roof. You see, that’s an issue in the fast food industry. Wendy’s even acknowledges on their website that there’s going to be a trade-off between salt and flavor.
It was weird. I didn’t feel healthy at all throughout the week, even though I was eating healthy foods and losing weight. And on the last day, I had this massive headache that was just infuriating. These places, they’re supposed to be tasty, cheap, and convenient. But it wasn’t cheap. Every healthy option was expensive, but left me hungry. For eight grilled nuggets and this tiny kale salad at Chick-fil-A, $12. For the power Mediterranean salad at Wendy’s, it was almost $8, yet I could get a cheeseburger, nuggets, fries, and a soda for only $4. That brings me to another problem. Walk into McDonald’s and you get hit with that sweet, sweet french fry smell, and I had to get a salad.
Would I recommend this to anyone? Nope, unless you’re stuck on the road with no other options. Though there was a bright spot: breakfast at Subway. They have these egg-white-and-cheese sandwiches, which I got covered in spinach and peppers. And let me tell you, it was good. But after all this, I just want a cheeseburger.
EDITOR’S NOTE: This video was originally published in May 2018.