Restaurant dining rooms are reopening in most of the US, but Americans are still drive-thru devotees.
Major fast-food brands reported quarterly earnings this week, and executives made it clear that drive-thrus are still huge for business.
Yum Brands Chief Financial Officer Chris Turner emphasized Taco Bell’s drive-thru success over the last quarter to investors in an earnings call. “The drive-thru experience is an increasingly critical competitive advantage for our brands,” he said, noting that drive-thru times improved by six seconds year over year even as the chain served four million more cars.
Taco Bell has increasingly prioritized drive-thrus over the last 18 months and made some major changes to improve the drive-thru experience. To some customers’ dismay, last year the chain cut over a dozen items, including potatoes and and Nachos Supreme, to shorten wait times. The cuts paid off – in the third quarter of 2020, Taco Bell served 30 million more customers than in all of 2019, and each order was completed 17 seconds faster.
Starbucks similarly credits its drive-thrus with the chain’s strong recovery as pandemic restrictions eased. “We continue to see strong sales recovery in the rural and suburban areas of the business, and in particular drive-thru,” Group President, North America and COO John Culver told investors.
Culver said that Starbucks is focusing on decreasing drive-thru wait times for customers. The chain has been testing new strategies for keeping drive-thru wait times down, even as customizations remain popular and average ticket size is elevated. Baristas can take orders through digital drive-thru screens, which the company previously said are installed at about 3,800 stores. Finally, Starbucks is also renovating 150 US drive-thrus that are space-constrained to make them more efficient, Culver said.
McDonald’s also emphasized the importance of drive-thrus in an earnings call. CEO Chris Kempczinski began the call by talking about the “iconic” McDonald’s experience and referencing how the chain pioneered drive-thrus in the early 1970s. He touted McDonald’s improved drive-thru times, which have shortened by 30 seconds in the last several years, with a slight three-second setback this year. He says times are still improving, though hurt by the labor shortage.
Like its competitors, McDonald’s is also investing in drive-thrus to make them even fast and more efficient. McDonald’s corporate has been pushing franchisees to upgrade drive-thrus since 2019 after years of increasingly long wait times. Since then, many of the chain’s 14,000 US drive-thrus now have double lanes, which are key to reducing bottlenecks. McDonald’s is also still working with AI technology in drive-thrus from the startup it bought in 2019, Aprente. Kempczinski said that the technology is in ten drive-thrus right now.
Starbucks is known for offering some of the best benefits for workers in the fast food world, and a new insight about internal meetings shows how seriously the chain takes this.
Company meetings and conferences always have two empty chairs, one for the customer and one for the employee, Starbucks veteran Vivek Varma told Bloomberg. The empty chairs are there as a “reminder not to give shareholders outsize consideration,” over workers and customers, Varma said.
“Making our partners proud and ensuring they have ownership in the company has always been our approach dating as far back as when we served our first latte,” a spokesperson told Insider.
Starbucks workers are called partners because they are granted company stock after a certain period of employment.
The idea dates back to former CEO Howard Schultz, who referenced it in his goodbye speech in 2018. “During all my years at Starbucks, in every weekly leadership meeting and quarterly board meeting, I always imagined two empty chairs in the room. One was for a partner and one for a customer,” the executive wrote.
“When I had to make a decision, I asked myself if the choice would make both proud. Today, I ask that you continue this tradition, and let the answer guide you. I promise the two chairs will serve you and the company well.”
Starbucks just reported record earnings and plans to invest more resources into cold brew and other cold drinks, which have proven hugely popular with customers.
Starbucks has pioneered many benefits for workers in the quick-service restaurant space, like full tuition coverage at Arizona State University and extending healthcare benefits to part-time workers back in 1988, making sure it also included domestic partnerships. The chain’s impact on the industry is evident as other businesses follow suit; Chipotle covers tuition for certain degrees, and Colorado chain Noodles & Company says it looks to Starbucks for leadership in benefits, Nancy Luna reported for Insider.
Starbucks is serving a limited-edition luxury afternoon tea in Tokyo, Japan – and it’s so popular that the chain says it may have to hold a lottery to decide who gets a spot.
Starbucks’ afternoon tea is called the “Roastery Pasticcini Flight.” Pasticcini is the Italian word for colorful bite-sized cakes and sweet baked goods.
Starbucks’ afternoon tea includes eight types of pasticcini and three small savory items, such as savory scones. It also comes with a pot of Teavana tea from a choice of four types: pineapple tea, hōjicha green tea, strawberry oolong, and a citrus, lavender, and sage tea.
The afternoon tea costs 4,620 yen ($42). A standard tall cappuccino will set you back around 418 yen ($3.80) at a Starbucks in Tokyo, roughly the same as US stores.
The other Reserve roasteries are in Seattle, Chicago, New York, Shanghai, and Milan.
The 32,000-square-foot, four-story upmarket store sells espresso martinis, cream sodas, and whiskey. It also houses a Princi bakery that serves breads, pizzas, and salads – as well as the cakes from the afternoon tea.
The afternoon tea launched on July 7 and is available from 1 p.m. to 5 p.m. weekdays. Starbucks says that it’s so popular that it can’t keep up with demand, and will hold a lottery for spots on its busiest days to make sure it has enough ingredients.
Starbucks launched the afternoon tea to celebrate 25 years since it opened its first store in Japan. It also launched a unique frappuccino for each of Japan’s 47 prefectures, such as a corn, white chocolate, and cornflake frappuccino available only in Hokkaido, and sweetened soy sauce, coffee, and cream frappuccino that you can only get in Chiba.
Dunkin’ just added popping bubbles to menus, and it’s the latest entry into Dunkin’s experimentation with trendy food items.
Bubble tea, the Taiwanese milk tea drink with tapioca pearls, has surged in popularity in the last few years, even leading to a nationwide shortage this spring. Variations on the drink, including popping bubbles like the ones at Dunkin’, are riding the wave of popularity. They’re also now on the menu at Sonic, which is owned by Dunkin’ parent company Inspire Brands.
“Dunkin’ has been working hard to bring in a younger demographic,” Mark Kalinowski of Kalinowski Equity Research told Insider. “Part of that is putting things on menu that appeal to younger customers.”
Kalinowski says that Dunkin’ looks to be making a conscious effort to draw in younger customers, who will ideally be loyal to the brand for years to come. Some competing brands have less of a need to concentrate on attracting young customers because they’ve grown that market over years, he said.
“Dunkin’ is always being inspired by different trends to create new and delicious ways to bring Dunkin’ to our fans. Offering innovative choices to our guests is a key part of our efforts to transform and modernize the brand, and we are proud to stand apart as the brand that democratizes trends and finds new ways to keep Americans running,” Jill Nelson, Vice President of Marketing & Culinary for Dunkin’ told Insider.
“When considering potential new menu items, our focus is on offering our guests authentic, high-quality options that first and foremost taste great. Our guests have made it clear that they appreciate that we offer such a wide variety of choices for customizing their beverages, which has encouraged us to continue to introduce ways to personalize and plus-up their favorite drinks. For example, we have introduced dairy alternatives like oat milk, and a non-coffee product Popping Bubbles, small flavored bubbles that can be added to any Dunkin’ iced or frozen beverage,” Nelson told Insider about the chain’s process for updating menus.
Dunkin’ is privately held and does not release quarterly financial results, but Kalinowski says he believe Dunkin’ is likely benefitting from the resurgence in sales across the restaurant industry right now.
A TikTok video that apparently showed a bizarre cash-register glitch at Starbucks has garnered more than 5 million views.
Initially posted on July 12 by TikTok user and apparent Starbucks employee @themondanadiaries, the video has now gone viral. It shows a malfunctioning register after a customer ordered a bagel with butter.
But a glitch in the system caused a seemingly endless stream of receipts printed with the word “butter” to flow out of the register.
In the video, @themondanadiaries and her colleagues watch in disbelief. Another video shows one of the workers turning off the machine – but the glitch just shifted to another register.
Text on the video says: “He broke it. It won’t stop printing this.” The user added in a caption that the event left her colleague “panicking.”
One barista in Tennessee said he makes “at least 15” TikTok iced white mochas each day. But staff told Insider’s Grace Dean they were feeling the strain of making so-called “TikTok” drinks, which are inspired by viral trends. One worker said customers get “very mad” if their drinks are not made perfectly – making staff feel like they are “coffee-making robots.”
Restaurant workers are quitting at record levels, but employees at some chains are more unhappy than others.
UBS analysts used Glassdoor employee reviews and an analysis of wages and benefits to determine which restaurants had the most dissatisfied workers, and would therefore likely have the most trouble finding workers given the national labor shortage.
UBS looked at chains in five categories: traditional quick service, pizza, coffee, fast-casual, and casual dining. Starbucks, LongHorn, and Texas Roadhouse had the highest employee satisfaction levels across all categories, while Dunkin’, Sonic, and Chipotle were on the lower end.
Full-service workers had higher average satisfaction scores than fast-food workers. The analysts tracked scores from 2019 to 2021 to see changes over time. Jack in the Box and Taco Bell had the greatest improvement in employee satisfaction, while Chipotle and Popeyes declined. UBS also noted that Chipotle has one of the highest wages of its competitors, and recently raised pay.
Surprisingly, overall restaurant workers’ satisfaction is higher than it was before the pandemic, UBS found. Despite workers saying they are happier, they’re quitting more than ever. The quit rate, which refers to the percentage of people who voluntarily leave their jobs over the period, reached 5.6% in April for the foodservice and accommodations sector. That number is an all-time high for the industry, according to Gordon Haskett Research Advisors, and it was more than twice the rate of the economy as a whole, not counting farming jobs.
The high quit rate is an “indication that restaurant sector employees are leaving their jobs to pursue higher wage rate opportunities – in both other sectors and other restaurant concepts,” Gordon Haskett’s analysts said in a report.
In other words, restaurant jobs didn’t necessarily get worse, but other opportunities available to workers got better. Some workers are taking these conditions as an opportunity to leave retail and restaurant jobs to get away from low pay and difficult customers, and a growing number of openings in the labor market is making it easier to transition to new careers. Some workers who were furloughed or laid off early in the pandemic may never return to fast food and customer service work.
Meanwhile, restaurants are struggling to keep jobs filled. Restaurants and stores are looking to staff up and return to normal as COVID-19 restrictions lift and the country slowly reopens. As some businesses report a lack of candidates for open positions, many are offering perks, bonuses, and benefits to new employees just to get them in for interviews.
“One iced white mocha with vanilla sweet cream cold foam and extra caramel drizzle.”
It may sound like a highly specific, complex coffee order – but some Starbucks workers hear it a dozen or more times a day.
Starbucks workers told Insider they’re inundated with orders for the same TikTok-inspired “secret-menu” drink. It’s based on Starbucks’ iced white mocha, but with the whipped cream substituted for vanilla sweet cream cold foam, and with an extra pump of caramel drizzle on top.
One barista in Tennessee said that he makes “at least 15” of them each day. “It’s the typical TikTok drink,” he said – “the biggest one.”
A grande version of the drink – Starbucks’ medium size – cost $7.60 to order from four separate Starbucks stores on Uber Eats.
“I cannot stress this enough, I have made it dozens of times on just a single shift for the past two to three months,” a former Starbucks shift supervisor in Baltimore said.
Both people spoke to Insider on the condition of anonymity.
“That to me is a really funny order,” a former barista in Los Angeles said. She wanted to remain anonymous because there’s a chance she’ll work for Starbucks again, she said.
She said the cold foam had the same ingredients as whipped cream, but a “slightly different texture” because the air is whipped into it in a different way.
Sometimes baristas read the stickers wrong and made the drinks with whipped cream instead, she said. Some customers would be fine with this, but others would ask the baristas to remake the drink over what she called a “meaningless” distinction.
Baristas’ opinions are split on how good the drink tastes.
“I can’t blame the customers [for ordering it], it’s good if you’re got an extreme sweet tooth,” the former Baltimore shift supervisor said.
But a barista at a different store in Baltimore, who spoke on the condition of anonymity, said the drink was too sweet.
“It’s just overly sweet, definitely gross,” she said. “But people will pay $7 for that drink.”
‘The TikTok drinks are absolutely ridiculous’
When orders first started trickling through for the iced white mocha modification, the former Baltimore shift supervisor said that they were “bewildered.” But they said that they got used to making bizarre drinks with lots of modifications, they said.
“I’m just gonna accept it, and I’m just gonna make them,” they said. “My job was to just make the drinks.”
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Starbucks is testing a new way for customers to order popular drinks through social media, and some baristas are not happy.
The coffee chain just launched a limited test that will let some customers order the off-menu drinks through Facebook and Instagram, according to an internal memo viewed by Insider. The program spotlights a recent trend of customers ordering elaborate Starbucks drinks and sharing the recipes on social media, so others can replicate the concoctions. The program will at first be limited to two such drinks: the Pink Drink Remixed and the Moon Drink.
Insider spoke with four current and recent Starbucks workers, who said that the test could add pressure and complexity to their jobs at a time when they already feel understaffed.
The Pink Drink Remixed is a venti Pink Drink – a Strawberry Acai Refresher with coconut milk – topped with Vanilla Sweet Cream Cold Foam. The Moon Drink is made up of a grande iced matcha latte and two pumps of chai. They will cost $6.25 and $5.55, respectively. The two drinks were selected to “reduce complexity but still test the function,” a Starbucks spokesperson said.
Some Starbucks baristas have spoken out in various outlets about the difficulty posed by drinks that get popular on TikTok and other social media platforms.
“Custom drinks from social media like TikTok are also increasing the need for labor. These drinks are getting more and more complicated,” one Pennsylvania supervisor previously told Insider.
Starbucks says the test could make things easier for workers.
“Testing a solution that gives customers and partners a way to easily order popular social media beverage customizations is just one example of our approach,” a Starbucks spokesperson said. “This test was created with input from baristas and the beverages selected for the test are not complex builds. The test size is intentionally limited in order to not impede lines or create complex beverages.”
As elaborate drink orders become popular on platforms like TikTok and Instagram, baristas acknowledged that tapping into those trends is a smart business move.
“They’re totally cashing in on social media viral drink trends,” one Starbucks employee in Seattle, who asked to remain anonymous due to fears of retaliation, told Insider. He said he is “livid” about the test.
“What they aren’t taking into account is the toll it will have on their baristas,” he told Insider. The barista said his store feels understaffed and overworked, and that the company should address more pressing needs like additional staffing, training, and updated store designs, instead of making it easier to order potentially complex drinks through social media.
A Texas Starbucks worker of five years, Bailey, told Insider he quit the chain recently due to what he described as increasingly overwhelming demands.
“Now, with the way they want to do all these modifications, not to mention promoting it and encouraging it from customers,” drive-thru times will get even worse, he told Insider. The combination of drive-thru, in-store, and mobile orders made it impossible to stick to the standards set by corporate, he said, while growing wait times and shortages lead to angry customers.
The Seattle worker also said he worried that the program could lead to further ingredient shortages, which tend to lead to more frustrated customers.
“I haven’t seen strawberry inclusions in weeks,” he said, which goes into the base of the Pink Drink Remixed, one of the promoted beverages.
Customization has become increasingly crucial to Starbucks’ brand, especially as the chain relies on fewer customers who spend more money on drinks. In the second quarter of 2021, US same-store sales increased by 9% despite a 10% decline in the number of transactions. The growth was driven by a 22% increase in average ticket size as orders grow larger and more complicated.
“They have a ton of customization, and that’s not going away. They believe it’s a strength,” Kalinowski Equity Research founder Mark Kalinowski told Insider in a previous interview. As most other fast-food chains are cutting menus to become more efficient, he doesn’t expect Starbucks to follow the trend. “Customization is much more meaningful for Starbucks,” than speed Kalinowski said, even if it means slightly longer waits.
A recent Reuters report found that at least nine restaurants and fast-food chains, including Subway and Chipotle, were out of stock in some items at certain locations.
A Wendy’s franchisee in the south told Reuters that it had received only half of the lettuce it had ordered. A Subway location in New York was out of roast beef, rotisserie chicken, ketchup, and spicy mustard, it told Reuters.
One Chipotle store in New Jersey had no barbacoa or carnitas during a busy lunchtime slot on Thursday, Reuters reported.
Meanwhile, a Starbucks in upstate New York told Reuters that it had been short on various items for several months, including green iced tea and cinnamon dolce syrup. Earlier this month, Insider’s Mary Meisenzahl reported on a leaked Starbucks memo that said the coffee chain would stop ordering at least 25 items because of supply-chain issues. A spokesperson for the company told Reuters that these shortages were temporary, and varied by store.
Earlier this month, burrito chain Chipotle said it was putting prices up across its menu by 4% to offset wage hikes and the rising cost of ingredients, such as avocados and corn, that were hit by shipping delays.