Here’s how Yelp says restaurants are changing this year
Notes from the company’s annual report on restaurants
What can we learn from Yelp reviews? It’s easy to eye-roll at the sometimes overzealous diner diatribes that surface on the ratings site, but taken together, the type of information that diners are willing to (freely) provide says a lot about how restaurants are changing. This year, Yelpers clearly noticed technology at restaurants, especially when that tech affects their final bill.
Yelp’s data supports the current industry narrative. In its annual State of the Industry report, the National Restaurant Association predicts restaurants are on track to achieve over $1 trillion in annual sales this year. Yes, this number represents restaurants’ biggest year ever, but the 13-figure estimation doesn’t necessarily mean business is booming.
Just this week, industry insights company Technomic changed its own forecast for the year. Previously, it projected a 5.3 percent increase in restaurant sales; it’s since revised the number to a smaller, 3.8 percent increase. Tl;dr: When prices go up, people cut back.
This phenom shows up in real time at some of the nation’s largest chains; last quarter, for example, McDonald’s revenue increased thanks higher menu prices, but customer traffic fell. To counter this, company execs promised a renewed focus on “value” messaging, including a nationwide marketing campaign, to win diners back. (Other big foodservice companies, like Starbucks, are focused on bringing more people through the door, too.)
It shows up on Yelp, too, which has come to serve as a kind of real-time trend tracker full of customer insight.
Tech up front:
Technology inside restaurants has become a big part of what diners notice and review. Mentions of the word “kiosk” in Yelp reviews is up 324 percent over the last year as compared to the same period three years ago. Mentions of the phrase “iPad checkout” have quadrupled, “order kiosk” mentions have tripled.
I read this as an endorsement: technology has become an integral and important part of the customer experience at lots of restaurants. In its report, Yelp likens touch-screen ordering to cost savings, a connection that kiosk companies corroborate. In fact, according to Yelp’s numbers, diners are noticing, and talking about, any part of the restaurant experience that’s perceived to cost more money. Enter tipping, seemingly always the most polarizing restaurant industry cash conversation.
The tipping point:
Of course the gratuity pile-on has found its way to review sites. Like references to touch screen ordering in restaurants, mentions of the phrase “tip screen” are up significantly. Unlike references to kiosks, mentions of the phrase “tip screen” have increased over eight hundred percent in the same timeframe — that’s close to a ten-fold increase.
“This rise may be driven by consumers, who, due to high inflation, are more conscious of their spending and opting for more affordable dining options, yet still feeling the impact of the added tip,” Yelp’s report states.
Technomic’s aforementioned revised forecast echoes this. An exec who worked on the study puts the same concept in different terms. “[Customers are] cutting back frequency. We’re also looking at our total spend, and maybe we’re not buying that carbonated soft drink along with our meal,” Technomic managing principal Joe Pawlak told Restaurant Business.
Talk about tipping on Yelp is most pronounced at restaurants with lower price points, those that Yelp labels with one $. Mentions of gratuity in this category have more than doubled over three years.
Everyone sees it. A few weeks ago during an interview with well-known restaurateur, author, and hospitalitarian Will Guidara on the podcast I co-host1, he (rightfully!) lamented a recent tip-screen experience with preset gratuity options of 28, 30, and 32 percent.
“It is getting a little insane,” he conceded.
Going viral:
Of course pop culture trends show up in reviews; that’s essentially the definition of “going viral.” So what’s the opposite? Restaurant reviews mentioning “no photos” and “no photography” are up 66 and 44 percent respectively. The anti-viral goes viral? Take New York’s Frog Club, whichhas become more known for the stickers it makes you put over your phone’s camera lenses before you enter than its food or service. But maybe that’s all part of the plan — according to Yelp’s data, views of listings for no-photos-please restaurants including Frog Club are up.
And finally, a kicker: Don’t underestimate the power of posting the influencer status order du jour. Yelp searches for the term “flat croissant,2” a trend that originated in Korea, are up over five thousand percent. Touché, flat croissant. A tip screen could never.
Here’s a link to Yelp’s full report.
What else?
The New York Times and Instacart partnered on making restaurants shoppable. New York Times Cooking subscribers can add recipe ingredients to Instacart fast, and get special offers and discounts from the grocery app. Maybe related: New York Times president and CEO Meredith Kopit Levien serves on Inscart’s board3. — AdAge
The World’s 50 Best restaurants were announced in Las Vegas last week. But are they really, objectively the world’s best restaurants? The answer to that question probably depends who you ask. But, according to Pete Wells in the New York Times, “The list’s website is a model that should be studied by anyone who wants to arrange words that sound important and don’t mean anything.” — NYTimes
Speaking of lists, Robb Report just dropped its list of the top 10 new restaurants in America. They’re ranked and include spots in both San Francisco and New York City, both of which were shut out of yet another awards program, this week’s James Beard Awards, or “the Oscars of food.” — Robb Report
I am proud to say I didn’t know this was a thing.
“CEO” does not mean “editor” and this deal does not represent an editorial conflict of interest. It’s not a bad idea. Still…