The effects of COVID and government actions to address it have sharply affected the hospitality industry since 2020. Moving through 2022, restaurants and bars are still reeling with an inability to staff their businesses. When hospitality jobs disappeared in March 2020, business owners thought they’d return with the conclusion of COVID as a pandemic into an endemic. This hope has now turned into an unfortunate fallacy only two years later. Furthermore, the effects of inflation and world events have raised the price of produce, energy, and labor – all of which a hospitality business needs to keep its doors open.
Automating the front-of-house is a path for restaurateurs to take to address current industry challenges. Contactless ordering, robot deliverers, and mobile payments can help restaurants ease the current labor and inflation crisis American restaurateurs now face. When all used together, an automated front-of-house with contactless ordering creates more accurate orders and reduces food cost. Increasing speed of service with robot food deliverers enhances customer satisfaction and return visits. Mobile payments reduce theft and allow staff to serve customers, not wait by the credit card reader to close a check.
Restaurateurs now have a critical choice: remain on the same path that they are on now or evolve. Try or, worse, struggle to wait out the storm of labor shortages and inflation… or… innovate and pave their business’ path towards the future. Take the next step by reducing costs, increasing profits, and implementing a game changing automated front-of-house.
Let’s look at a few steps towards automating the front-of-house for a table service restaurant, including the problems being faced, the solutions for them, and a financial return on investment analyses.
Assume that you are a restaurant with $5.00 beers, $8.00 appetizers, $20.00 entrees, and an average check of $50.00 per table.
Problem: Restaurants are currently unable to find sufficient labor to fill their front-of-house. This goes for all staff, predominantly bussers and servers. This has caused slower speed of service, affecting the number of sales a front-of-house can create during dinner service. More work and less workers can also increase stress on the front-of-house and lead to less accurate order taking, resulting in a higher food cost due to dishes sent back to the kitchen.
Solution: Contactless ordering can help ease the stress of finding staff. Customers can order directly through their phone, have it sent through the point-of-sale system and into the kitchen. This can increase speed of service and allow customers to order at will, plus customers are more likely to upsell themselves while ordering than when a server is present. Front-of-house staff can now focus more on customer service and reduce stress of taking orders. Food ordering accuracy is also increased, resulting in less mistakes and lower food cost.
Return on Investment: Sell 4 more appetizers during 4 peak hours 5 days per week. 4 More Sales X $8.00 Appetizers X 4 Peak Hours X 5 Days per Week = $640.00 more per week, $2,773.00 more per year, and $33,280.00 more per year.
Reduce food ordering mistakes by 2 entrée orders per day 5 days per week. 2 Less Mistakes X $20.00 Entrée X 5 Days Per Week = $200.00 saved per week, $866.00 saved per week, and $10,400.00 per year.
Total Annual ROI: $43,680.00
Robot Food Deliverers
Problem: Again, labor shortages are an issue facing most restaurant owners, especially for positions like food runners. Aside from not being able to fill the labor, the estimated labor cost of a food runner position according to Zippia is an average of $23,500.00 per year in Pennsylvania, New Jersey, and Delaware. Inflationary pressure on other segments of a restaurant’s business means that supplementing a food runner wage cost could be beneficial towards maintain or expanding a restaurant’s bottom line. Additionally, a lack of labor can slow speed of service and decrease a business’ sales.
Solution: Robot food runners can help decrease pressure to fill a position that no job seekers are currently taking. A business owner can take that position that is no longer being filled and replace the labor cost with a robot. A purchase of a robot averages a 5–7-year usage with a starkly lesser cost than a food runner labor cost over the same period. Finally, filling the vacant food runner position allows a restaurant to return to faster speed of service.
Return On Investment: Over a 5-year period, replace an average $23,500.00 annual labor cost with a $10,000.00 robot. $23,500.00 Annual Labor Cost X 5 Years = $117,500.00 5 Year Labor Cost – $10,000.00 Keenon Robot Cost = $107,500.00 in labor cost savings over a 5-year period. Replace two labor costs over a 5-year period and a restaurant will save $215,000.00.
Increase table turnover by 1 more table during 4 peak hours 5 days per week with faster speed of service. $50.00 Check per Table X 1 More Per Hour X 4 Peak Hours X 5 Days per Week = $1,000.00 per week, $4,333.00 per month, and $52,000.00 per year.
Total Annual ROI: $65,500.00. Total 5 Year ROI: $367,500.00.
Problem: A restaurant checkout times can end up running too long with the back and forth for an employee to go to a table, retrieve payment, go back to the point-of-sale, complete the transaction, and go back to the table. That’s four different points the employee must go to during a checkout process. Restaurant checkouts can affect a waiter’s tip if they take too long. Theft can also be an issue during checkouts committed by employees or with stolen credit cards.
Solution: Mobile payments, such as scan-to-pay and QR Code payments, can help reduce all these factors. Reducing checkout times can allow servers to serve and sell their other tables rather than closing out a customer. Mobile payment software also permits suggestive tips to help increase tip averages. Taking a credit card out of your employee’s hands can help reduce theft.
Return On Investment: Increase beer sales by 5 more beers during 4 peak hours 5 days per week. 5 more beers X $5.00 per beer X 4 peak hours X 5 days per week = $500.00 per week, $2,166.00 per month, and $26,000.00 per year.
Increase tip amount from 15% to 18% per $50.00 table during 4 peak hours 5 days per week. $50.00 Table X .15 = $7.50 average tip. Increased to $50.00 Table X .18 = $9.00 average tip. A 15% tip average over 4 peak hours 5 day per week is $150.00 per table; increasing the check average by 3% to 18% allows server to earn $180.00 per table during 4 peak hours, or $1,560.00 more per table per year. Multiply that number by the average amount of table a server may have per hour during dinner service, and you’ll have a much happier employee.
Average restaurant theft by employees is 7% per year according to Rewards Network. Say that you are a restaurant that makes $500,000.00 annually. Annual theft would equate to $35,000.00 per year. Implement mobile payments and reduce employee theft by 2% per year down to 5%. That’s $10,000.00 in decreased theft on an annual basis.
Total Annual ROI: $36,000.00 per year plus higher tips for employees.
Total Return On Investment
Now, let’s add these automated front-of-house ROI points together…
Contactless Ordering: $43,860.00
Robot Deliverers: $65,500.00
Mobile Payments: $36,000.00
Automated Front-Of-House ROI Year 1 Total: $145,360.00
Automated Front-Of-House is the Future of Restaurants
That’s a massive chunk of revenue that a restaurant can recoup or generate by implementing an automated front-of-house! Innovating for the future and using contactless ordering, robot deliverers, and mobile payments can help restaurants continue to operate despite the labor shortage and inflation challenges present in the current industry.
What could $145,360.00 mean for your business? A new kitchen set? Interior renovations? Or, even more stark, continuing to operate? It’s all possible with our automated front-of-house solutions at Advanced Hospitality Systems. Our industry leading point-of-sale and robotics solutions will change the way your business operates for the better. Contact us today for a free consultation on how your restaurant can become the future today.