from APT's Restaurant Practice

8 Tips for Improving Your Testing Process

February 3rd, 2015 | Posted by Admin in Restaurant Analytics - (Comments Off)

Most restaurant chains use in-market tests to help inform decisions. But just running tests isn’t enough. Based on our work with dozens of restaurant brands, here are eight tips for improving your testing process. (more…)

What’s on tap for restaurants in 2015?

January 15th, 2015 | Posted by Admin in Restaurant Trends - (Comments Off)

In 2014, more restaurants introduced digital ordering, new labor laws caused executives to re-evaluate their staffing models, and restaurants continued to focus on growing sales in slower dayparts. In 2015, we expect the importance of digital to grow, enabling restaurants to focus more on offering customizable options and sending targeted offers to their guests. Meanwhile, as restaurants continue to streamline their menus, new calorie laws will likely lead to healthier options and new menu layouts. From 15 years of experience working with top restaurant organizations, here are key trends for restaurants this year. (more…)

APT Co-Founder and Chairman, Jim Manzi, recently co-authored a Harvard Business Review article with HBS Professor Stefan Thomke about how experimentation can help companies de-risk new ideas and drive innovation. The article details a “checklist” for running business experiments and identifies how Big Data can dramatically improve the experimentation process.

Click here to download a full copy of the article.

Restaurant same-store sales increased 3.4% in October 2014 compared to October 2013, according to data from the APT Index. Performance was better in areas where unemployment decreased, where temperature increased, and where median income was less than $75K. Click here to view the top and bottom performing cities.

Variable Pricing: How will guests respond?

November 11th, 2014 | Posted by Mckenzie Harper in Pricing - (Comments Off)

APT SVP Jonathan Marek discusses the trend of variable menu pricing, and its implications for restaurants.

APT Index Reports September Restaurant Sales Up 2.1%

October 14th, 2014 | Posted by Mckenzie Harper in APT Index - (Comments Off)

Restaurant same-store sales increased 2.1% in September 2014 compared to September 2013, according to data from the APT Index. Areas that performed better included those with less rainfall, those where median income was less than $50K, and those where median age was less than 35. Click here to view the top and bottom performing cities.

Key Analytic Challenges for Restaurants

October 10th, 2014 | Posted by Mckenzie Harper in Restaurant Analytics - (Comments Off)

APT SVP Jonathan Marek discusses a key challenge for restaurants: isolating the incremental impact of each action from the noise inherent in day-to-day operations.

5 Things to Consider Before Removing Menu Items

September 30th, 2014 | Posted by Mckenzie Harper in Menu Strategy - (Comments Off)

Many restaurant organizations make menu rationalization decisions based on basic financial metrics like item sales and number of checks. However, incorporating more robust check- and guest-level metrics into the analysis can help restaurants make more profitable decisions. Five important metrics for executives to consider when identifying which items to rationalize are:

  1. Item Profitability: Start by identifying items that have low sales and margin. With this list, executives can begin digging deeper into the analysis.
  2. Attached Sales / Margin: Consider the sales and margin associated with checks containing each item. If an item has low sales and margin on its own, but high sales and margin in the rest of its check, restaurants could be losing much more than they initially realized if they delete that item.
  3. Item Loyalty: Focus on items with lower item loyalty to increase chances that demand will transfer to other, similar items (e.g., guests who used to order a Grilled Salmon sandwich might switch to a Grilled Chicken sandwich).
  4. Guest Lifetime Value: Make sure to recognize your best guests. Take into account not only item loyalty on its own, but also which items are ordered by your most loyal guests to reduce the risk of losing those guests.
  5. Guest Satisfaction: Encourage guests to shift to higher satisfaction items by removing those items with lower satisfaction.

Click here to read about how one restaurant evaluated these metrics to create a new menu to build guest loyalty.

Restaurant same-store sales increased 3.3% in August 2014 compared to August 2013, with check size up 3.2% and transactions up 0.2%, according to data from the APT Index. Areas that performed better included those where unemployment decreased and where median income is less than $50K. Click here to view the top and bottom performing cities.

APT Index Reports Restaurant Transactions Down 1.5% in Q2

September 17th, 2014 | Posted by Mckenzie Harper in Uncategorized - (Comments Off)

Restaurants continued to struggle to drive traffic in Q2 2014, according to data from the APT Index. The APT Index showed that same-store restaurant transactions were down 1.5% from the second quarter in 2013, while same-store sales were up 0.8% and check size was up 2.4%. The APT Index, generated based on actual sales data from tens of thousands of restaurant locations, provides additional insight into restaurant sales performance, showing that the five worst performing states were in the Northeast. These states were New Jersey [-4.6%], New York [-2.9%], New Hampshire [-2.6%], Connecticut [-2.3%], and Pennsylvania [-1.0%]. We can break these comps down further to understand how performance varies by local market characteristics. In areas where temperature increased in Q2 2014 versus Q2 2013, the APT Index reported that same-store sales increased 1.1%, whereas sales were up only 0.4% in areas where temperature decreased. Additionally, the Index showed that areas where median income was less than $50K had a 2.0% sales increase, while areas where median income was $50K or greater had a sales decrease of 0.2%. With specific data points like these, at the national level and for each specific restaurant, executives can begin to understand their “true comps” after accounting for uncontrollable factors in the surrounding environment.