Former VP at Sweetgreen
- North America QSR technology landscape – outlook for H2 2022 and beyond
- Competitive dynamics and digital investment outlook across operators – Sweetgreen (NYSE: SG), Chipotle (NYSE: CMG), Starbucks (NASDAQ: SBUX), McDonald's (NYSE: MCD) and others
- QSR technology investments – operational and cost implications, noting potential impact on third-party aggregator relevancy
Could you share your outlook for the North America restaurant industry over H2 2022?
Looking at the near-term demand environment across industry segments, so full-service vs fast-casual vs quick-service restaurants, do you think demand has improved, deteriorated or held steady year-to-date for each, and relative to year ago?
Has anything stood out within QSR in terms of demand? It’s obviously up against a challenging consumer environment.
Do you consider the industry broadly technologically sophisticated today or is there still a lot of opportunity or runway?
Can you outline some of the key technology capabilities you mentioned briefly? What key features separate the most formidable from the least competitive restaurant players in the medium term? How do you assess the QSR technology landscape around the tools that should be front and centre for operators in the space?
Are any capabilities, tools or technologies worth noting that may have been nice to have a few years ago but are must-haves today?
How would you frame the results that come from digital boards? Do these boards tend to drive conversion, tickets or volume?
You mentioned the cost savings or benefits to digital boards. What’s the magnitude of those savings?
Do you think any operators might be lagging on adopting some of the key capabilities and features we’ve discussed, perhaps due to lack of investment in building out the systems to release key features?
Is there anything overly complex about the technology to enable delivery within the Starbucks app?
Which QSR players do you think are leading on the tech front? What key criteria would you use to force rank the top three?
Is there a particular reason why Starbucks, McDonald’s or even Domino’s – which is known to be very tech-forward – didn’t make your top three players on the tech front?
How would you respond to someone that believes McDonald’s has overinvested but under-delivered on technology?
How might the leading or lagging operators approach their next digital phase strategy? What key focus areas might be prioritised or de-emphasised over the next 3-5 years? What drives these focus areas? Are operators looking to achieve more in-store traffic, off-premise sales or upsell for both channels?
Are there any hardware or software vendors or providers you believe have contributed to digital success for players that are winning in digital?
What are your thoughts on LevelUp and its place in the industry, noting it was acquired by Grubhub in July 2018?
You mentioned dark kitchens, also known as ghost kitchens. What are your thoughts on these and how much of a threat or opportunity are they to the major QSR players we’ve discussed?
Do you have any thoughts on technology budgets or estimates for allocations, perhaps as a percentage of overall budget that goes to technology investments? Could you quantify the averages for major QSR operators?
How would you frame the risk of third-party aggregators’ disintermediation, given some QSR operators’ off-premise channel technology investments? Domino’s seems to be waging war against third-party aggregators with its 2021 ‘straightforward delivery fee’ campaign, which incentivised customers to order on the company’s platform. I think it gave away more than USD 50m in free food to random customers who placed an order through its platform.
You don’t think there’s a broader risk with many operators thinking like Domino’s and potentially looking to become less dependent on third-party aggregators?
Amazon shut down its Amazon Restaurants food delivery service in 2019. What are your thoughts on its potential next move in the QSR space?
Do you see any potential QSR industry disruptions or disruptors in the medium-to-long term?
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