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Service Perception Hurt Restaurant Traffic · Choppin’ It Up by Bloomberg Intelligence

0:13
Speaker 1: Welcome to Chopping It Up.
0:15
Speaker 2: I'm your host, Mike Hanlon, the senior Restaurant and Food
0:17
Speaker 2: Service Analyst at Bloomberg Intelligence. Our research and that of
0:22
Speaker 2: bi's five hundred analysts around the globe can be found
0:24
Speaker 2: exclusively on the Bloomberg terminal. If you enjoy the pod,
0:28
Speaker 2: please do me a solid and give us a five
0:30
Speaker 2: star review on Apple or Spotify. Today we're joined by
0:33
Speaker 2: Lisa Miller, founder and president of Lisa W. Miller and Associates,
0:38
Speaker 2: a consulting practice. She's also the founder and host of
0:41
Speaker 2: the Business of Joy podcast. Welcome to the pod.
0:44
Speaker 3: Thank you so much. It's going to be a joyful discussion.
0:48
Speaker 1: Yeah, I've been looking forward to it.
0:52
Speaker 2: All right, So what type of projects are your clients
0:54
Speaker 2: asking for coming out of a roller coaster of a
0:57
Speaker 2: year in twenty twenty five.
1:00
Speaker 3: I tell you the biggest is how are the consumers
1:02
Speaker 3: feeling right now? How do I drive value? And just
1:06
Speaker 3: trying to get top line growth back going again? And
1:09
Speaker 3: I'll just jump right in. Is that For those that
1:12
Speaker 3: don't know my research, I do one thousand consumer surveys
1:15
Speaker 3: each and every month and I've been tracking it since
1:19
Speaker 3: March of twenty twenty. Remember that, And so I have
1:23
Speaker 3: ninety thousand surveys I've done since March of twenty twenty.
1:27
Speaker 3: But here's the crazy thing is that the leading indicator
1:32
Speaker 3: in my data, I call it the joy over fear
1:35
Speaker 3: kind of model. And twenty percent of Americans as of
1:39
Speaker 3: two weeks ago say they're spending as usual, and that
1:43
Speaker 3: is down from November. I was hopeful that, you know,
1:47
Speaker 3: joy was going to be in the air for the holidays.
1:49
Speaker 3: So November was actually twenty three percent. And think about it.
1:53
Speaker 3: You know, you might say three percent, that doesn't sound
1:55
Speaker 3: like a big change, but think about your top line
1:57
Speaker 3: or your bottom line growth. Three percent would be pretty
2:00
Speaker 3: sweet right now. And so what's happening is people are
2:04
Speaker 3: fearful in about thirty two percent. A third, let's say
2:07
Speaker 3: a third are kind of anxious, very anxious about the economy.
2:12
Speaker 3: And that number actually stayed flat. So people just kind
2:14
Speaker 3: of landed in the middle. And so what does that
2:17
Speaker 3: mean from a restaurant perspective, you know, the share war,
2:21
Speaker 3: You know, we really need to have this mindset of
2:24
Speaker 3: you know, if the category we know from black box
2:27
Speaker 3: has been shrinking, you have to be able to make
2:30
Speaker 3: it worth it. For your guests. But what I'm going
2:33
Speaker 3: to be watching closely is with all of the insurance
2:37
Speaker 3: premiums and so on that are going to be hitting
2:40
Speaker 3: in January. My survey next week is going to really
2:43
Speaker 3: be watching that impact of you know, I call it
2:46
Speaker 3: the fund money effect, if you know, bills are higher
2:50
Speaker 3: credit card bills from the holidays. So I'm kind of
2:53
Speaker 3: cautious about January right now.
2:56
Speaker 2: Okay, Yeah, we just got our black Box intelligence data
2:59
Speaker 2: for Decay.
3:00
Speaker 1: It was weak.
3:02
Speaker 2: I would say it was largely impacted by an earlier
3:05
Speaker 2: than usual flu season, which is the worst in twenty
3:11
Speaker 2: five years, and some pretty cold weather along with some snow.
3:16
Speaker 2: So hopefully things can bounce back here, you know, as
3:21
Speaker 2: we lapped some pretty weak comps from December, I'm sorry,
3:24
Speaker 2: January of last year.
3:26
Speaker 3: Well, and I think what I always look at, you know,
3:29
Speaker 3: getting ready for the call, I wanted to think about,
3:31
Speaker 3: like what are the things that I think restaurant operators
3:33
Speaker 3: need to know right now? And I looked at frustrations
3:37
Speaker 3: and pain points. And so I've been again tracking this
3:40
Speaker 3: for a very long time, and a couple of things
3:42
Speaker 3: that I found interesting is that even today, about half
3:46
Speaker 3: of restaurant goers are saying that it's just the prices
3:50
Speaker 3: have gone up too much. So that's not really new,
3:53
Speaker 3: and it has been pretty steady for a long time.
3:56
Speaker 3: But then the quality of the food three and ten,
4:01
Speaker 3: I mean, think about that. Think for the operators out there.
4:04
Speaker 3: Think about the fact that in your restaurant or your
4:07
Speaker 3: drive through that three out of ten customers are saying that,
4:11
Speaker 3: you know, the quality of your food might have been
4:13
Speaker 3: going down. That's a lot. And what happens is, oh,
4:17
Speaker 3: let me just hit the other ones pressure to tip.
4:20
Speaker 3: What I looked at is that is the only one
4:23
Speaker 3: that has kind of been consistently going up the pressure
4:26
Speaker 3: to tip because if the price is high, the quality
4:30
Speaker 3: is not that good, and then I still have to tip.
4:34
Speaker 3: And then the last is not enough staff. Now I
4:37
Speaker 3: will say so about three and ten also say there's
4:41
Speaker 3: not enough staff. And that is as of two weeks ago. Now,
4:45
Speaker 3: compared to where we were two years ago or three
4:48
Speaker 3: years ago, these numbers are much better than they were
4:51
Speaker 3: two or three years ago. But we know the purchase frequency,
4:55
Speaker 3: the frequency of dining out has been problematic. So here's
4:59
Speaker 3: the golden answer to this. Okay, So you're like, what
5:02
Speaker 3: do I go do about it? Lisa. What I tell
5:05
Speaker 3: my clients is they've got to make it worth it.
5:08
Speaker 3: And so anytime that you say, gosh, you know, I'm
5:11
Speaker 3: feeling pressure, I need to take price increases, and I
5:15
Speaker 3: would recommend if you please avoid that if you can.
5:18
Speaker 3: But if you take two percent price, what are you
5:21
Speaker 3: going to do to the experience, to the quality, to
5:24
Speaker 3: the all of that. Because it's a simple math equation.
5:28
Speaker 3: You know, what I get for what I pay, and
5:31
Speaker 3: what I pay is not only my money, but my
5:33
Speaker 3: time and the value equation. So it's I say, it's
5:37
Speaker 3: a simple math equation, but that is one of the
5:39
Speaker 3: things that you have to think about. What can I
5:41
Speaker 3: give back to make it worth it?
5:44
Speaker 2: Yeah, it makes so much sense, and I think that's
5:46
Speaker 2: why we've seen such a wide gap between winners and
5:50
Speaker 2: losers over the last couple of years.
5:52
Speaker 1: Right. You know.
5:53
Speaker 2: A key talking point for some of the companies I cover,
5:56
Speaker 2: you know, namely Cava and Chipotle, has been that gen
5:59
Speaker 2: Z spending is down due to a tougher job market
6:03
Speaker 2: for younger workers.
6:05
Speaker 1: But some surveys I've seen show that they're still.
6:08
Speaker 2: Willing to spend. I know you've done a lot of
6:10
Speaker 2: work on that generation. What are you seeing in your data?
6:13
Speaker 3: So gen Z is a complex animal, as we know,
6:18
Speaker 3: and I go back to that worth it score is yeah,
6:21
Speaker 3: they might have less let's call it discretionary income, but
6:25
Speaker 3: since I'm all about joy, I call it the fun money.
6:28
Speaker 3: But they're really making choices about what types of restaurants
6:31
Speaker 3: that they want to go to and what I hear
6:34
Speaker 3: in as I'm out and talking and doing my research.
6:38
Speaker 3: What's fascinating is that gen Z is calling Chili's a
6:43
Speaker 3: fast casual restaurant. And I have actually shared that with
6:47
Speaker 3: the folks over at Chili's because for me, that is
6:51
Speaker 3: such a telling insight that gen Z is saying that,
6:56
Speaker 3: because now that the value you know, we all we've
6:59
Speaker 3: all been. It's so incredible the run that they're having.
7:04
Speaker 3: But they've unlocked the value equation and it's worth it.
7:07
Speaker 3: And so the fact of the matter is they're going
7:10
Speaker 3: to be stealing occasions. So it goes back to that
7:12
Speaker 3: share of wallet. Why do I choose you over another brand?
7:17
Speaker 3: But I believe that both you know, the Kavas and
7:21
Speaker 3: you know, uh, Chipotle and those guys, they'll figure it out.
7:24
Speaker 3: But they can't get they what drives me crazy is this,
7:28
Speaker 3: let's get back to basics. Well, back to basics is
7:31
Speaker 3: going backwards, not forwards. And you probably heard that in
7:35
Speaker 3: some of those earning calls. And there's nothing wrong with
7:39
Speaker 3: you know, amping up your service, amping up your quality.
7:42
Speaker 3: But even if you say the words back to basics,
7:44
Speaker 3: I want to say, how do I move forward? How
7:46
Speaker 3: do I provide the best experience? And I wish we
7:50
Speaker 3: could come up with something different than back to basics.
7:53
Speaker 1: Yeah.
7:53
Speaker 2: Well, Fred Leafronc, you know, always likes to say, if
7:56
Speaker 2: they're basics and they're so important, why'd you stop doing them?
8:00
Speaker 3: Right?
8:00
Speaker 2: Why you stop focusing on them? It's it's table stakes
8:03
Speaker 2: to run there. It is a good operation, right.
8:06
Speaker 3: Yeah, And I let me say one other thing about
8:08
Speaker 3: gen Z. This is kind of a shocking point to me,
8:14
Speaker 3: So I want to pause on this and get your thoughts.
8:17
Speaker 3: I have a survey that says twenty percent of gen
8:22
Speaker 3: Z have no memories of sitting around a table with
8:26
Speaker 3: friends or family when they were growing up. Wow, twenty percent,
8:32
Speaker 3: And so what does that mean? And let me add
8:34
Speaker 3: another data point that's also every restaurant tour. These are
8:38
Speaker 3: two numbers you should write down and think about. So
8:42
Speaker 3: the other number that is very scary is that parents
8:45
Speaker 3: of nine to twelve year olds, basically say twenty five
8:50
Speaker 3: percent of them say their kids do not want to
8:53
Speaker 3: go out to eat. Okay, so in the short term
8:57
Speaker 3: you say, great, I'm going to let's get them in
9:01
Speaker 3: the delivery, Let's get them in the carry out. You know,
9:03
Speaker 3: I have kids. I remember over they were nine to twelve.
9:05
Speaker 3: It's crazy, crazy, crazy, But there is a bigger long
9:09
Speaker 3: term implication. So one of the keys to twenty twenty
9:13
Speaker 3: six is figuring out the experience, in making it worth
9:19
Speaker 3: it to go inside your restaurants and I mean all restaurants.
9:24
Speaker 3: And I know people think I'm crazy. People thought I
9:27
Speaker 3: was crazy back in you know, twenty twenty when I
9:29
Speaker 3: was measuring joy or fear. But here's why. If we
9:33
Speaker 3: have gen Z that has no memory of sitting around
9:35
Speaker 3: a table, what's going to happen when they get older
9:37
Speaker 3: and have kids? Right, What's going to happen to those
9:41
Speaker 3: nine to twelve year olds when they go then they
9:43
Speaker 3: grow up and they have no memories of going and
9:46
Speaker 3: sitting around a table. That is a catastrophic shift in
9:51
Speaker 3: our industry, But it is in our control today. And
9:57
Speaker 3: here's another shocking statistic, And then I would like your
10:00
Speaker 3: thoughts on all these And I looked at this recently,
10:03
Speaker 3: maybe last year. Here's another shocker to me. There are
10:07
Speaker 3: more dining occasions in fast food happening than all of
10:14
Speaker 3: casual dining combined. And it makes sense because there's so
10:18
Speaker 3: many more units, right, But people are choosing to sit
10:22
Speaker 3: in a uncomfortable plastic chair or bent versus you know,
10:30
Speaker 3: going sitting in a restaurant. So those that's those are
10:33
Speaker 3: things that I think are just really important. And those
10:37
Speaker 3: that can really think about that and anticipate it, you
10:40
Speaker 3: can win in the short term, but then we're winning
10:43
Speaker 3: the long term.
10:44
Speaker 2: Wow, some of those numbers are pretty pretty crazy. I mean,
10:48
Speaker 2: twenty percent. I have a big family and everybody's close
10:52
Speaker 2: and so I mean I remember going to my grandmother's
10:56
Speaker 2: every single Sunday with the entire family and eating you know,
10:59
Speaker 2: pasta and meatballs and lasagna. So that is really interesting
11:06
Speaker 2: to me because obviously that's not my son's experience or
11:09
Speaker 2: my nieces right, nephews, right, So that's really interesting. Also,
11:14
Speaker 2: such a high percentage of kids not wanting to go.
11:17
Speaker 2: I wonder if that's a product of parents just plopping
11:20
Speaker 2: a kid down and giving them an iPad, right, Like
11:23
Speaker 2: kids are probably like I could just use my iPad
11:26
Speaker 2: on my bed. It's more comfortable than going to the
11:29
Speaker 2: restaurant and using the iPad.
11:30
Speaker 1: Right.
11:31
Speaker 3: Well, here's the thing. So that's a question I'm going
11:34
Speaker 3: to dig into in twenty twenty six because when I
11:36
Speaker 3: saw that data, it was an unexpected shocker for me.
11:40
Speaker 3: And again, the unintended consequences today are bad, but five
11:45
Speaker 3: years from now it's even worse because casual dining, I mean,
11:49
Speaker 3: the restaurant industry is built on serving families, right, I mean,
11:53
Speaker 3: that's the core of what it is. But I have
11:56
Speaker 3: a couple of hypotheses because you know, when I'm just
11:58
Speaker 3: out and about, you know me, I'm always talking to people,
12:01
Speaker 3: and what I hear is that sometimes kids will say
12:04
Speaker 3: there's too many rules. Right, there's too many rules when
12:08
Speaker 3: I'm sitting at a restaurant, And think about those nine
12:11
Speaker 3: to twelve year olds. They were quite young during the pandemic,
12:17
Speaker 3: and so during the five years you know that during
12:19
Speaker 3: the pandemic, there was no choice. So their early years
12:23
Speaker 3: of their let's call shaping their behaviors when you're out
12:26
Speaker 3: and about in public. They didn't have the opportunity to
12:30
Speaker 3: get those skills when they were super young. And I
12:34
Speaker 3: remember my kids, we you know, I worked at Brinker
12:39
Speaker 3: and you know, so we definitely even before I worked
12:41
Speaker 3: at Brinker, we just went out to eat a lot,
12:44
Speaker 3: and we did carry out a lot because you know,
12:46
Speaker 3: two parents working three children, you know, we did that.
12:49
Speaker 3: And I remember my mom said something when they were babysitting.
12:52
Speaker 3: My mom and dad just were babysitting. We were on
12:54
Speaker 3: vacation and they had the kids that they would just
12:57
Speaker 3: come back. When we came back, they would brag like, oh,
13:00
Speaker 3: oh god, your kids are so well behaved. And even
13:02
Speaker 3: the people at the restaurants were saying that. And it's
13:04
Speaker 3: because they grew up knowing how to behave at a restaurant.
13:09
Speaker 3: And I think that could be a simple part of it.
13:12
Speaker 3: There's rules they don't know what to do, Like if
13:15
Speaker 3: you sit down and you eat at a table, Oh
13:18
Speaker 3: my gosh, if you're eight years old and you have
13:20
Speaker 3: to wait fifteen minutes for your food and you're sitting
13:23
Speaker 3: at a table, that parents like, what do I do?
13:26
Speaker 3: So so I think that those you know, people are
13:30
Speaker 3: like well, behaviors are changed. No, I think it's there's
13:35
Speaker 3: so much desire for connectivity, especially among Gen Z. They
13:39
Speaker 3: want to put their phone down, so they want to
13:41
Speaker 3: have connections. And how can restaurants buck the trend? For
13:45
Speaker 3: every trend, there's a counter trend, and this counter trend
13:50
Speaker 3: is going to bite everybody in the butt if it's
13:52
Speaker 3: a blind spot.
13:54
Speaker 2: Yeah, and to your point, you know, we've seen not
13:57
Speaker 2: only the turnaround at Chili's, which has been you know,
14:00
Speaker 2: widely documented, but also some other casual dining chains.
14:04
Speaker 1: Did well last year.
14:06
Speaker 2: The Chili's has created a positive wave where some of
14:09
Speaker 2: these younger generations you know, tried it out and said, oh,
14:12
Speaker 2: this is pretty good for you know, in terms of
14:14
Speaker 2: what I get for what.
14:15
Speaker 3: I pay exactly, and that whole value equation is is
14:20
Speaker 3: really important. And let me just add on that now
14:22
Speaker 3: this number is for total US, not gen Z specific,
14:26
Speaker 3: but that worth it. So for my research, you know,
14:30
Speaker 3: I try to ask questions differently. Most research and restaurants say,
14:34
Speaker 3: how like, you know, how satisfied are you on a
14:36
Speaker 3: five point scale extremely satisfied to not at all satisfied?
14:40
Speaker 3: Are you coming back definitely or definitely not definitely will
14:43
Speaker 3: definitely not. So every one of my clients in their surveys,
14:47
Speaker 3: I always ask the definitely worth it? So on a
14:50
Speaker 3: five point scale, how how was it worth it definitely
14:55
Speaker 3: or not at all? So all the things we talk about.
14:57
Speaker 3: I try to put the consumer vernacular in my surveys,
15:01
Speaker 3: and that's how they talk about it. They don't say, hey,
15:04
Speaker 3: I was extremely satisfied when I was at a restaurant.
15:08
Speaker 3: That's not what people care about. So only twenty nine
15:12
Speaker 3: percent of Americans say their restaurant experiences are worth it.
15:18
Speaker 1: Wow, that's a problem.
15:20
Speaker 3: That is a massive problem. And that first impression, last impression,
15:25
Speaker 3: and lasting impression. If your lasting impression is that it
15:31
Speaker 3: only twenty nine percent said it was worth it, I
15:34
Speaker 3: want to ask you, so, do you have this conversation
15:36
Speaker 3: at your house? What do you want for dinner? I
15:38
Speaker 3: don't know what do you want for dinner? Does it
15:40
Speaker 3: ever happen?
15:41
Speaker 1: Yep?
15:43
Speaker 3: And if that happens and it wasn't definitely worth it,
15:47
Speaker 3: you're not going to be on the restaurant list.
15:49
Speaker 1: No, not at all.
15:50
Speaker 2: You know, I've I've always been this way, but probably
15:54
Speaker 2: more now so that since prices have gone up. But
15:56
Speaker 2: I've always been. You know, I have a list of
16:00
Speaker 2: names that you know, food I enjoy, Right, I get
16:04
Speaker 2: a good amount of quality food for what I pay,
16:07
Speaker 2: if it's delivery, it's delivered hot and quickly, right, And
16:12
Speaker 2: I go back to that list over and over. And
16:15
Speaker 2: you know, what we've seen in the data is that
16:18
Speaker 2: people are less willing to experiment. They're going to stick
16:20
Speaker 2: with them, you know, with the chains that they know
16:23
Speaker 2: they're going to get a lot of food for the money,
16:26
Speaker 2: and it's going to taste good and be delivered quickly
16:30
Speaker 2: and hot. And so you know, an interesting point that
16:34
Speaker 2: we continue to see is chains that spend more on
16:37
Speaker 2: food costs are driving more traffic, right, And it's because
16:42
Speaker 2: people notice it.
16:43
Speaker 3: Well, I couldn't agree more in the idea of that
16:47
Speaker 3: quality food. But consistency. So one of the things that
16:51
Speaker 3: I have in my data is I call it kind
16:54
Speaker 3: of the five c's of connection, because would I say,
16:59
Speaker 3: without connection, and you can't find the joyful experiences. And
17:04
Speaker 3: so I've tried, I've been I have quantified that. And
17:07
Speaker 3: so the first is care and so you your employees
17:12
Speaker 3: kind of Andrew Cathy's magic, which is you have to
17:15
Speaker 3: have employees that feel cared for before they can care
17:20
Speaker 3: for their guests. And so the idea of care I
17:23
Speaker 3: always ask companies, is your training budget higher or lower
17:29
Speaker 3: than it was before? And people sheepestly look away, which
17:33
Speaker 3: tells me the answer in a lot of cases. And
17:36
Speaker 3: you know, if that, if your team doesn't feel cared for,
17:40
Speaker 3: it's going to be hard for them to provide a
17:42
Speaker 3: joyful experience. So then the other thing is consistency. And
17:46
Speaker 3: so consistency is that I can count on you that
17:49
Speaker 3: it's going to be well executed each and every time.
17:53
Speaker 3: So if I don't trust you, I can't come back.
17:56
Speaker 3: And that's where if you know, every days of opportunity
17:59
Speaker 3: to surprising, to lie or to disappoint, and with the
18:01
Speaker 3: cost of things, it's so challenging now, so that consistency
18:06
Speaker 3: is really important. And then creativity. And so the creativity
18:11
Speaker 3: could be around the experience, it could be around a
18:14
Speaker 3: distinctive menu, but what is it that really is what
18:18
Speaker 3: do people talk about? And that's where Chili's, you know,
18:20
Speaker 3: has just been on fire with you know, there they
18:23
Speaker 3: are in the conversation and you know, I know their
18:26
Speaker 3: marketing team just got recognized by ad Week and it
18:29
Speaker 3: wasn't just among restaurants, It's like among all companies. And
18:34
Speaker 3: you know, it's that creativity to make it seem fun
18:38
Speaker 3: to like try something new or just some new experience.
18:42
Speaker 1: Trying to touch a picture of your cheese pull or whatever.
18:45
Speaker 3: I was just gonna say. And and the other thing
18:47
Speaker 3: about that, I'm sure it's again well documented, but you know,
18:49
Speaker 3: the cheese pool, you know, I heard George Felix speak,
18:53
Speaker 3: and you know it's like overnight success. You know, it
18:56
Speaker 3: took two years because you know, they nurtured that that
19:00
Speaker 3: cheese pull and definitely that was something that they needed.
19:05
Speaker 3: But then comprehension is another one. So that's another one
19:09
Speaker 3: of the five c's, and comprehension is really understanding the
19:12
Speaker 3: hopes once in dreams of your guests. But then the
19:16
Speaker 3: add to that is the hope once and dreams of
19:18
Speaker 3: your employees. And I have been doing so much more
19:22
Speaker 3: work and doing the same rigor that I do for
19:27
Speaker 3: consumer research among employees, and I think that that's fascinating.
19:33
Speaker 2: Yeah, for sure, and I want to get more into that.
19:36
Speaker 2: But I'd like to tie this with a bow. So
19:39
Speaker 2: where does gen Z's sentiment stand versus the other generational cohorts.
19:45
Speaker 2: Is there anything that sticks out in the data right
19:47
Speaker 2: now with any of them or any of the other generations.
19:50
Speaker 3: Yeah, So basically gen Z they on that sentiment scale,
19:56
Speaker 3: they are pretty average on that. So gen Z is
19:59
Speaker 3: a co doesn't stand out is different on that. But
20:03
Speaker 3: what I would say is income. Gen Z by income
20:07
Speaker 3: is where you can actually see some major differences. And
20:10
Speaker 3: let me tell you a little bit more about that.
20:13
Speaker 3: When I do the research, you have to think about, Okay,
20:16
Speaker 3: what does an average gen Z make, and then what
20:20
Speaker 3: is above average for a gen Z versus average and not?
20:25
Speaker 3: So let me give her for instance. So if you
20:27
Speaker 3: say fifty thousand dollars or sixty thousand dollars, that seems
20:31
Speaker 3: pretty average for all of us, but that's really high
20:35
Speaker 3: for gen Z. So within the gen Z cohort, you've
20:39
Speaker 3: got these different income groups, and the higher income gen
20:43
Speaker 3: Z groups are definitely still spending, but then the lower
20:47
Speaker 3: income gen Z feel more pressure. So I would encourage
20:52
Speaker 3: people to not think about gen Z as one single cohort,
20:56
Speaker 3: but think about them as a generationational cohort that has
21:01
Speaker 3: lots of opportunity. It's a bell curve of income, and
21:06
Speaker 3: we have to remember.
21:06
Speaker 2: That, Yeah, makes total sense with the k shape recovery
21:10
Speaker 2: we've had post pandemic due to all the inflation. All right,
21:14
Speaker 2: let's talk about employees. One of your weekly videos, you
21:18
Speaker 2: mentioned the only fifteen percent of gen Z had a
21:22
Speaker 2: job before they were sixteen. I wasn't really shocked by this.
21:28
Speaker 1: Number one.
21:28
Speaker 2: I have an eighteen year old and he's been working
21:31
Speaker 2: for you know, a couple of years plus now, but
21:35
Speaker 2: I know how hard it is for a lot of
21:36
Speaker 2: his friends to find a summer job, which is like
21:39
Speaker 2: crazy to me. And then number two, a higher minimum
21:43
Speaker 2: wage prices out on skilled labor. Just it's just what
21:47
Speaker 2: it does. Price floors, you know how they impact you know,
21:53
Speaker 2: employer decisions about who to hire. Right, is a sixteen
21:56
Speaker 2: year old worse twenty dollars an hour? Probably not?
21:59
Speaker 1: So what does.
22:01
Speaker 2: Your research tell you about those fifteen percent that start
22:04
Speaker 2: working before sixteen?
22:07
Speaker 3: It is one of my favorite topics. Honestly, I wish
22:10
Speaker 3: I could like shout from a pedestal and mountaintop on
22:13
Speaker 3: this topic. So here's a scoop. I kind of discovered
22:18
Speaker 3: this when I was talking to gen Z, and it's
22:22
Speaker 3: this it's this doom loop that you know, I'm applying
22:26
Speaker 3: for a job, but they ask for five year of
22:30
Speaker 3: five years of experience. But how can I get five
22:32
Speaker 3: years of experience if nobody will give me a job
22:34
Speaker 3: to start? So that's where this nugget came from. And basically,
22:39
Speaker 3: those fifteen percent that have the lawnmowing jobs and the
22:42
Speaker 3: babysitting jobs and lemonade stands, they are much more likely
22:48
Speaker 3: to feel confident in their current roles. They are statistically
22:52
Speaker 3: significantly happier, but they also make more money, They're more
22:57
Speaker 3: likely to be married, They're just all of these things. Now,
23:00
Speaker 3: I can't say correlation or causation because I don't have
23:05
Speaker 3: enough data to do that, but I can tell you that,
23:08
Speaker 3: again going back to some of those other statistics, that
23:11
Speaker 3: we're kind of shocking if we don't give young people
23:15
Speaker 3: an opportunity in the restaurant world, that will impact us
23:20
Speaker 3: in the future. And so think about for the listeners
23:24
Speaker 3: out there, think about the people that took a chance
23:27
Speaker 3: on you when you were younger in your career. And
23:31
Speaker 3: I know all of those things are problematic. About all
23:35
Speaker 3: those things you mentioned about the you know, the labor
23:39
Speaker 3: rates and you know should pay twenty dollars for a
23:42
Speaker 3: sixteen year old seems outrageous, But at the end of
23:45
Speaker 3: the day, I'll use Dave mccallops as an example at
23:49
Speaker 3: Chuck E Cheese, So he has a program to hire
23:52
Speaker 3: fifteen and sixteen year olds, And one of the biggest
23:55
Speaker 3: things is is that once they get past the like
23:58
Speaker 3: the ninety day retention, they are so locked in and
24:04
Speaker 3: we have got to change the narrative that gen Z
24:06
Speaker 3: is lazy. They're lazy because we're not taking the time
24:10
Speaker 3: and energy to train them. We put them in a job.
24:13
Speaker 3: Let me tell you this. Sorry, I could go on
24:15
Speaker 3: about this, Dovic whever. If you think about an eighteen
24:18
Speaker 3: year old getting a first job at a restaurant and
24:21
Speaker 3: they've had no experience, we take for granted that, you know,
24:25
Speaker 3: we grew up doing these jobs when we were thirteen, fourteen, fifteen, sixteen,
24:29
Speaker 3: all those things. So when we're eighteen, we kind of
24:32
Speaker 3: already know how eye contact works, we kind of know
24:35
Speaker 3: how things work. But these kids are showing up at
24:38
Speaker 3: eighteen and that's their first, first first job. But we
24:42
Speaker 3: expect them to already have all this other experience and
24:44
Speaker 3: they don't. So we like organizations like pro Start, you know,
24:48
Speaker 3: all the great work that the National Restaurant and Texas
24:51
Speaker 3: Restaurant Associations are doing. But restaurant tours have to take
24:56
Speaker 3: that leap and take a chance, and I believe it
24:59
Speaker 3: really will pay off. Now, are they going to become
25:02
Speaker 3: the thirty year veterans. Probably not, but they're going to
25:05
Speaker 3: be hard workers while they're there if you show you care.
25:09
Speaker 1: Yeah, I mean it seems to work pretty well for
25:11
Speaker 1: Chick fil A.
25:12
Speaker 3: Well that in Chuck E Cheese too, you know, and
25:14
Speaker 3: so and they're well cared for. They're just like Andrew
25:18
Speaker 3: Cathy says, they feel cared for. They can execute a
25:24
Speaker 3: process you know, my pleasure. Everybody knows that. But why
25:29
Speaker 3: is this such a hard concept? So I am I'm
25:31
Speaker 3: on a mission to change that. And can you tell
25:33
Speaker 3: the passionate and last topic for me?
25:36
Speaker 1: Yeah, it's awesome, it's awesome, you know.
25:38
Speaker 2: And Chick fil A, I mentioned they're committed to training
25:41
Speaker 2: them right, and so you know, they do a hell
25:45
Speaker 2: of a job. So what can restaurant chains do to
25:49
Speaker 2: get more out of their gen Z employees?
25:52
Speaker 3: So when you think about what can restaurants do to
25:53
Speaker 3: get more out of their employees, one of the biggest
25:56
Speaker 3: insights that I had is I developed this GENS the
26:00
Speaker 3: growth Framework, and what I found out of thousand, three
26:05
Speaker 3: thousand gen Z is that only sixteen percent fall in
26:10
Speaker 3: a group that I call confident and capable. Only sixteen percent,
26:16
Speaker 3: so eighty four percent are in this. Think of it
26:19
Speaker 3: as kind of a flower above the ground and then
26:22
Speaker 3: there's all the dirt and people are different levels waiting
26:24
Speaker 3: to come out of and bloom, right, and every all
26:27
Speaker 3: of our kids for those out there, we know all
26:29
Speaker 3: of our kids kind of bloom at different times and differently.
26:32
Speaker 3: And so what's interesting is I think the listeners can
26:36
Speaker 3: relate to this is there is a group that is
26:40
Speaker 3: kind of in survival mode. And so if they are
26:42
Speaker 3: in survival mode and you say give them a lot
26:47
Speaker 3: of pressure, like you know, just do this task, they
26:51
Speaker 3: will literally wilt. But let me tell you what's the
26:55
Speaker 3: problem is that I have an example where a friend
26:58
Speaker 3: of mine shared a story this one employee they had
27:02
Speaker 3: hired and they thought that this woman, young woman was
27:06
Speaker 3: just going to be a superstar in her role and
27:09
Speaker 3: it didn't work out, and so she got put on
27:13
Speaker 3: a performance plan. And what happened when she got put
27:16
Speaker 3: on the performance plan is She ended up knocking it
27:20
Speaker 3: out of the park. Out of the park, and the
27:24
Speaker 3: manager of course came back and said, like, we knew
27:27
Speaker 3: you had it in you and why why are you
27:31
Speaker 3: doing this now? And she said, she goes, well, first
27:36
Speaker 3: of all, I had nothing to lose because I thought
27:37
Speaker 3: I was going to get fired. But I was afraid
27:40
Speaker 3: to start and I was afraid to fail. So she
27:45
Speaker 3: just didn't try. And what a tragedy, right, But you
27:50
Speaker 3: don't want to get somebody to get to a point
27:53
Speaker 3: where you're on a performance plan and what ninety percent
27:56
Speaker 3: of those are going to be out the door and
27:59
Speaker 3: you know, may those superstars are there and you just
28:01
Speaker 3: don't know it. But it goes back to what we
28:04
Speaker 3: were just saying, is that if you presume they know
28:07
Speaker 3: how to do some of the basic stuff, maybe they don't.
28:11
Speaker 3: But when you fail in the gen Z world, everything's
28:15
Speaker 3: videoed everything, you know, everything is just so public. They
28:19
Speaker 3: just don't want to start and they so they're paralyzed
28:22
Speaker 3: by not wanting to start. And so if you have
28:26
Speaker 3: kids too, it works for your employees or your kids. Honestly,
28:29
Speaker 3: it's like you know, like you know, find a job,
28:33
Speaker 3: just go out there and do it. They know practically
28:36
Speaker 3: what to do, but they're kind of stuck on go
28:40
Speaker 3: to not be able to do it. And then so
28:43
Speaker 3: that's kind of at that bottom group of survival mode,
28:46
Speaker 3: and then I feel boxed in. The Other thing is
28:49
Speaker 3: is there's a group of gen z that says, the
28:53
Speaker 3: curiosity got sucked out of me at school. This generation,
28:58
Speaker 3: you know, standardized testing. You know, you know if you
29:02
Speaker 3: have parents that were like, go take all the AP
29:05
Speaker 3: and it was like resk to college, you know, work work, work,
29:08
Speaker 3: standardized tests, and so they're like, curiosity got stripped out
29:11
Speaker 3: of me. So how do you motivate them? Give them
29:14
Speaker 3: find out what they are interested in, and give them
29:17
Speaker 3: a project that somebody can even don't have time to
29:21
Speaker 3: get to, give them something that is curious, they solve
29:24
Speaker 3: a problem. I mean how simple is that. So allow
29:28
Speaker 3: them to have their curiosity and creativity. And then there's
29:32
Speaker 3: going to be a group that's like close to blooming
29:34
Speaker 3: close to their and they're the ones that want the mentors.
29:38
Speaker 3: But if you try to give a mentor, whether it's
29:40
Speaker 3: a manager or even somebody that you want to get
29:44
Speaker 3: into that manager rank or headquarter rank. If you give
29:47
Speaker 3: somebody in that afraid to start a mentor that's not
29:50
Speaker 3: going to work, But if you have to make sure
29:53
Speaker 3: that they're ready to be able to get to that.
29:56
Speaker 3: So I developed this growth framework to help companies be
30:00
Speaker 3: able to understand their gen Z audiences to help them
30:03
Speaker 3: be more successful.
30:05
Speaker 2: That's great, there's a lot of good nuggets in there.
30:08
Speaker 2: I'm gonna have to have my eighteen year old son
30:10
Speaker 2: listen to the podcast.
30:13
Speaker 3: Well. And one of the things I'm working on is
30:16
Speaker 3: so I've been working I have these tools to help companies,
30:19
Speaker 3: but because I have gen Z kids, what I found
30:22
Speaker 3: when I did this survey it was crazy. At the end,
30:24
Speaker 3: They're like, what else do you want to tell in
30:26
Speaker 3: my survey? So when I'm asking the gen Z all
30:28
Speaker 3: these questions, They're like, this survey was the best ever.
30:32
Speaker 3: You know, you get me, I actually have hope, you know,
30:36
Speaker 3: good luck in your research. So it was so I
30:38
Speaker 3: think there's an opportunity for me to do something directly
30:41
Speaker 3: for gen Z. So stay tuned for that.
30:43
Speaker 1: Very cool.
30:45
Speaker 2: Can restaurants glean anything from the New Year's resolutions of
30:49
Speaker 2: the coveted gen Y and gen Z consumers?
30:53
Speaker 3: Oh again, you were just hating on some of My
30:55
Speaker 3: favorite topics is as I mentioned earlier in my work,
31:00
Speaker 3: I think companies need to always say there's trends and
31:04
Speaker 3: counter trends, and so every comp you know, we always
31:08
Speaker 3: joke at you know, conference, how long in a in
31:10
Speaker 3: a session before somebody talks about AI. You know, it
31:15
Speaker 3: could be like the college drinking game every time somebody
31:17
Speaker 3: says I AI. You know, it's just everywhere, but the
31:22
Speaker 3: idea of putting your phone down. Gen Z, they are
31:28
Speaker 3: fourteen points more likely to say their new year's resolution
31:32
Speaker 3: is just to be happy by you know, fourteen points higher.
31:36
Speaker 3: And it's why there's so much pressure on them right now.
31:40
Speaker 3: All the you know, gen Z is unemployable, the job market,
31:44
Speaker 3: AI is taking my jobs. You know, they're the loneliest generation.
31:48
Speaker 3: They're two times more likely to be lonely than the
31:51
Speaker 3: total US population, and so they have a pretty basic
31:54
Speaker 3: need to be happy and understanding that it's you know,
31:58
Speaker 3: there's this trend right now, the analog bag. So gen Z,
32:03
Speaker 3: you know, instead of pulling out their phone and their bags,
32:06
Speaker 3: they're basically have like a crossword puzzle or maybe a
32:10
Speaker 3: good old fashioned print magazine. I know it's hard to
32:14
Speaker 3: remember those, but yes, hard copy magazines or even knitting
32:20
Speaker 3: or coloring books. I mean, coloring books are having a
32:22
Speaker 3: moment right now because they're trying to use their mind
32:25
Speaker 3: instead of just the doom scroll, you know, if you're
32:28
Speaker 3: at the airport or you're just have some downtime. And
32:32
Speaker 3: I think that that's a very telling trend for restaurants,
32:35
Speaker 3: which is how do you have a space that actually
32:38
Speaker 3: is inviting to have a conversation. Gen Z, they have
32:42
Speaker 3: another trend where they put their phones down in the
32:45
Speaker 3: middle of the table while they're eating, So like at
32:49
Speaker 3: a restaurant, they put their phones down. So gen Z
32:53
Speaker 3: is trying to be disconnected so they can become connected,
32:58
Speaker 3: and that's a really big one. But they're also trying
33:01
Speaker 3: to save money, and so that kind of goes along
33:03
Speaker 3: with you know, restaurant pullback is they are trying to
33:06
Speaker 3: save some money too. But the big counter trend is
33:10
Speaker 3: you know, really seriously getting disconnected.
33:14
Speaker 2: Yeah, that's that's great. I was surprised to see, but
33:17
Speaker 2: not surprised to see. I guess thirty two percent, and
33:19
Speaker 2: we're looking to reduce screen time. But I guess it's
33:23
Speaker 2: a little bar because I feel like they are always
33:26
Speaker 2: on their phone.
33:26
Speaker 3: Well, they're going to be most on it. But I
33:28
Speaker 3: think the implication, you know, my favorite line, since I
33:30
Speaker 3: know you watch my little videos is I always say, well,
33:33
Speaker 3: what's the so what now what? Right? So the so
33:36
Speaker 3: what now what for this gen z is what investments
33:40
Speaker 3: are you making and training and feeling cared your employees
33:44
Speaker 3: cared for? Because if they don't feel cared for, then
33:50
Speaker 3: they're going to be disengaged in you know, the whole
33:52
Speaker 3: quiet quitting and blah blah blah. So cared for is
33:56
Speaker 3: going to be a big part of it. That's a
33:57
Speaker 3: so what now what? But then the other part of
34:00
Speaker 3: it is how much money are you investing in to
34:03
Speaker 3: make it? You know, all this word frictionless and all
34:06
Speaker 3: the digital transformation and all the AI going back to
34:11
Speaker 3: what are you spending on the counter trend to make
34:13
Speaker 3: the in restaurant experience better and and not to have
34:19
Speaker 3: a you know, digital free world. But how do you
34:22
Speaker 3: create spaces? You know, Starbucks did it a million years
34:26
Speaker 3: ago with the you know, the third space concept, and
34:30
Speaker 3: that is something that restaurants need to think about it.
34:33
Speaker 3: You know, there we've I think the trend to shrinking
34:35
Speaker 3: dining rooms needs to stop because that was all about efficiency,
34:39
Speaker 3: and so restaurants that can create spaces that's the so
34:42
Speaker 3: what now what for gen Z?
34:44
Speaker 2: Yeah, Starbucks is moving back in that direction, right, This
34:49
Speaker 2: was great.
34:49
Speaker 1: Thanks for doing it.
34:50
Speaker 3: Lisa, absolutely, thank you so much for having me. I
34:53
Speaker 3: know it's been a long time coming, but always a pleasure,
34:56
Speaker 3: and you know, I love sharing all these insights with everybody.
35:00
Speaker 1: For sure.
35:00
Speaker 2: I have to have you back on. If there's any
35:02
Speaker 2: gen Z listeners, listen, I'm gen x or. We were
35:05
Speaker 2: called lazy on the cover of Time magazine. You probably
35:07
Speaker 2: don't even know what that is, but back in the nineties,
35:10
Speaker 2: So don't feel so bad. All the younger generations always
35:14
Speaker 2: tend to catch some shade.
35:15
Speaker 3: I feel like they do. They sure do.
35:19
Speaker 2: I want to thank the audience for tuning in. If
35:21
Speaker 2: you'd like to contact Lisa, sign up for her weekly research,
35:24
Speaker 2: or just see what else she's up to, go to
35:27
Speaker 2: lwm dash Associates dot com. If you liked our discussion,
35:33
Speaker 2: please share it with your friends and colleagues. Check back
35:36
Speaker 2: soon for an interview with Lyle Tick, CEO of BJ's Restaurants.
35:41
Speaker 2: We'll be doing that from the ICR conference in Orlando.