Restaurant Industry Market Update with Sam Oches

In this insightful episode of The Restaurant Report, host Paul Barron and Sam Oches from Informa's Restaurant & Food Group analyze the critical challenges and opportunities facing the restaurant industry in 2025. They dive into corporate layoffs affecting major brands, the impact of Trump's tariffs on supply chains, tech integration challenges, and the evolving role of third-party delivery. The conversation balances concerns about declining margins and consumer price sensitivity with optimism about hospitality's importance and potential growth opportunities later in the year, providing restaurant professionals with valuable perspective on navigating the current market landscape.

RestaurantIndustry #FoodServiceTrends #RestaurantTechnology
Get Your Podcast Now! Are you a hospitality or restaurant industry leader looking to amplify your voice and establish yourself as a thought leader? Look no further than SavorFM, the premier podcast platform designed exclusively for hospitality visionaries like you. Take the next step in your industry leadership journey – visit https://www.savor.fm/

Capital & Advisory: Are you a fast-casual restaurant startup or a technology innovator in the food service industry? Don't miss out on the opportunity to tap into decades of expertise. Reach out to Savor Capital & Advisory now to explore how their seasoned professionals can propel your business forward. Discover if you're eligible to leverage our unparalleled knowledge in food service branding and technology and take your venture to new heights.

Don't wait – amplify your voice or supercharge your startup's growth today with Savor's ecosystem of industry-leading platforms and advisory services. Visit https://www.savor.fm/capital-advisory

Episode Transcript

Speaker 1 (00:00):
Welcome back to another episode of the Restaurant Report. Today,
we're going to be looking at a market update and
mainly looking at what is going on from a brand side,
also some consumer trends where the market may be leaning
in terms of sales and profits, and some of the
challenges that we'll be facing here in the industry. Today
is going to be a good one that I don't

(00:20):
think you guys are going to want to miss. I'm
going to be joined here by Sam Ocus, who is
the editor in chief of Nation's Restaurant News. You guys
know them over there at Informa. It's going to be
a good, lively discussion and I want you guys to
stick around. We'll be right back. This episode is brought

(00:46):
to you in part by Gusto, the number one rated
HR platform for payroll, benefits and more. With Gusto's easy
to use platform, you can empower your people and push
your business forward. Over four hundred thousand business is choose
Gusto every day. And let's get into it, guys. There's
a couple of things you can do with Gusto that
you should check out. Some of the solutions that you're

(01:08):
just absolutely going to want to know about is of
course their business type new businesses and startups. You guys
are welcome coming in small businesses. Maybe you have a
mid sized business that needs an all in one payroll
and benefit program as well as HR all of this scaling.
The cool thing about this is it's an all in
one platform. They can also select and punch in right

(01:32):
to your accountants. So check it out. You've got a
Gusto Pro platform. You can become a partner with them
if you're an accountant, So if you have a CPA already,
this is the place for you. And of course the
best thing is pricing. The thing about Gusto is flexible
plans and features honest pricing, no hidden fees. This is

(01:52):
the plan that we use, which is the Plus plan
sixty bucks a month. Guys, you cannot go wrong. It's
about nine bucks a person, so you guys can definitely
afford it. Get in there and choose Gusto with a
full suite of tax services, HR services, time tracking, scheduling, expenses, reimbursements.
You get the picture. Gusto is the place for you.

(02:14):
Check it all out. Just go over to Gusto dot
com use our link down below to get started. See
you there. All right, We're back here on the Restaurant
Report and I've got Sam Olcus coming in with me
today and Sam, how are you.

Speaker 2 (02:29):
I'm good, Paul, thanks for having me.

Speaker 1 (02:31):
Nice to see you. Very good. Likewise, listen, I wanted
to you know, we talked a little bit about this
on pree of the show. Tell me a little bit
about where Informa is today. You mentioned there's some changes
in the roles and you guys got some team changes.
Give us an update a little bit of what's going
over there.

Speaker 3 (02:48):
Yeah, sure, so if you don't know, Informa is a
global event management company primarily based in London, but over
the years they've grown to encompass also immediate side of
the business as well. So we have our division is
called Informa Food Service, and in Forma food Service encompasses
six publications. Nation's Restaurant News and Restaurant Hospitality are two

(03:12):
of them. Those are the two ioversee. We also have
Restaurant Business and Food Service Director, and then we have
two retail publications, Supermarket News and CSP. So it's all
food related publications for the industry within Informa Food Service.
But we are a part of the bigger event management
company that is in Forma.

Speaker 1 (03:29):
Okay, so Informa has events obviously multi sectors that you
guys track. Obviously, the food side is the big one
that we're going to be diving in today. I want
to kind of lead off with the topic around the
layoffs because that's probably the biggest news that's been hitting
here recently. Starbucks went in had some layoffs. We saw

(03:51):
Brian Nickel kind of make a pretty drastic move in
the space right now, and he also did a big
kind of callback to his team saying, Hey, we're really
focused on getting the job done. We want people to
come back in the office. Are you seeing any other
brands that are really kind of in that position right now?

Speaker 2 (04:09):
Yeah, certainly.

Speaker 3 (04:10):
You know, we've seen layoffs across the industry, Panera, Bloomin brands,
a number of companies have announced they're going to do that,
and you know, this is part of a broader trend
across industries. I think, you know, post pandemic. To be
honest with you, I'm surprised it didn't happen earlier. I
think a couple of years ago we started to see
a lot of layoffs at technology companies in particular, right.

Speaker 2 (04:31):
So, I think it was early twenty twenty three.

Speaker 3 (04:33):
You know, we were calling twenty twenty three the Year
of efficiencies.

Speaker 2 (04:37):
Meta.

Speaker 3 (04:38):
The Facebook owner was I think laying off ten thousand
employees something like that, you know, So we thought at
that time, oh wow, so lots of layoffs coming all
of the glut of the pandemic, especially in the tech sector,
was going to have a domino effect and we're going
to start seeing more layoffs as companies try to leverage
technology to achieve efficiency. And it didn't happen as much

(04:58):
in the restaurant industry then, So I think to some
degree what we're seeing now is that kind of pushed
back to where here in early twenty twenty five, companies
are saying, look, we are too fat at the top,
We've got too much especially you know on the corporate
side of things, We've got to get a leaner ship here.
We've got to have some efficiencies to improve our profitability because,

(05:20):
as I think we'll probably talk about here, you know,
profitability is taking a hit as costs of everything go.

Speaker 2 (05:26):
Up, as consumers pull back because of inflation.

Speaker 3 (05:29):
So in order to improve profitability, this is one of
the ways companies are looking is at the corporate.

Speaker 1 (05:34):
Layoffs well, and I think you're hitting on it is
the profit side of this. We'll look at some Chipoli
numbers here in a minute, but this is something that
has mostly been at the corporate level. However, I've also
talked to a lot of operators here recently in the
fast casual space. They've even talked about trying to slow
their growth in terms of hiring and looking to hire

(05:57):
more quality. So I'm kind of curious, do you think
we're going to see a little bit of a shift
in possibly the workforce and is this being aided in
by maybe some of the improvements that we've seen from AI.

Speaker 3 (06:13):
Absolutely, I mean I think no doubt about it. For
the last five to ten years, as we've watched a
lot of the tech innovation come forward that in a
lot of ways is doing the role of some employees.
I mean, I think a very easy thing to look
at is voice activated ordering and putting that in the
drive through. So, just using that as an example, QSR

(06:33):
brands in particular tend to do seventy to eighty percent
of their business in the drive through lane, which makes
the drive through order taker one of the most important
people in that building, and if you replace that person
with AI, if that's a voice activated AI that is
taking your order, you're you're maybe not necessarily getting rid
of that position, but you're going to reallocate that labor.

(06:56):
And even as you reallocate the labor with your strong
employee who was previously to making orders in the drive through,
it's going to have that domino effect to where you
aren't going to need that many employees in the restaurant.
So that's just one example of throughout the operation, particularly
in the back of house, I think you see a
shakeup of technology taking over some of the roles of employees,
a reallocation of labor, often toward the front of the

(07:18):
house to provide hospitality. But it is affording the restaurant
companies the ability to pull back on their labor, which
of course is one of the biggest cost on your
p and l anymore and getting more and more expensive,
and of course the quality talent just isn't there when
you're hiring, so tech makes a lot of sense in

(07:38):
relieving the pressure of labor.

Speaker 2 (07:39):
So I think that's what you're talking about, Paul Is.

Speaker 3 (07:41):
I think a lot of companies are saying, okay, well,
we're going to pull back on hiring. We're going to
look for ways that tech can you make our operation
more efficient, pick up a lot of the responsibilities that
our employees previously were doing, and that's going to have
the net effect of a couple of positions getting cut.

Speaker 1 (07:57):
Yeah, I think the key here when you look at
the percentage of savings. I'll go in and I'll share
this portion of the article. Let me kind of zoom
in on that here as well. What you'll notice is
Denny's CFO. This is Robert Verstek. He said that just
the corporate support centers, which goes back to here. Now, granted,
support centers are usually supporting maybe the operation side, but

(08:20):
still saying that this would result in about a three
and a half to four percent savings in their general
administrative expenses. So I'm kind of curious if that is
being impacted just by work that it's kind of like
doze for the restaurant industry. Are we seeing kind of
a cycle of saying, well, we just had some jobs

(08:41):
that were a little bit more fluffed than they were productive,
or do you think, oh, no, we're doing that on
an AI by which is it or is it a
blend of both.

Speaker 3 (08:51):
Probably a blend of both. I mean, if you look
at what Brian Nicol has done at Starbucks. You know,
when he announced that there would be layoffs, before they
announced the scope of those layoffs, he said that they
were going to target employees at the corporate level who
you know, weren't in any kind of meaningful leadership position
where they you know, they didn't necessarily have ownership of
any particular project or division, which is you know, basically

(09:13):
stripping out layers. Right. So I think that this is
what a lot of private equity will do well to
go exact bliness, they strip out the layers, right, And
I think that's what some of these companies are doing,
you know, and what perhaps DOJE is doing at a
broader federal level. And so and whether you think that's
right or wrong, by the way, that that has the
effect of lowering your GNA. As the Dennis CFO was

(09:34):
alluding to their finding hopefully some efficiencies, I mean, because look,
you don't want to strip out the layers and then
you know, in the months after that, find out oh,
like those were actually quintessential employees that we needed to
run this business. Yeah, so there is a danger to it,
but I think if you're a little bit more precise,
you're a little bit more calculated on who the people

(09:56):
we need to have and who are the quintessential employees
to running this company versus those who are maybe we
have a little bit of fluff, maybe there's a little
bit of glut here. There is a way I think
you can do it to make it where you are
saving and you are finding efficiencies as well. Yeah.

Speaker 1 (10:10):
I think the you know, the brands that I've talked
to who have done and gone through the process of
at least setting up a plan for twenty twenty five
for reducing corporate workforce, most of them have kind of
pointed it at, hey, we are getting to more AI
tools that possibly I don't need as many people. In marketing,
I don't need as many people. Maybe enfranchising A lot

(10:32):
of that is being done now in new places. But
to your point is if they just overreach, that could
be obviously an issue for the brand going forward, especially
on growth.

Speaker 3 (10:42):
Yeah, and I think yeah, and I to point out
to just you know, the support part of support center,
which is, if you have a company, let's just use
McDonald's as an example, McDonald's is ninety five percent franchised
and they have thousands and thousands of franchises or thousands
of franchise operators. If you, as a sport center, cut
the people who are supporting the franchisees, that of course

(11:04):
has a trickle down effect, right sure, and you're going
to start having disgruntled franchisees. You're going to have the
restaurants start start falling apart, frankly, because the role of
a support center is to do exactly that, is to
support the restaurants. So that's where it's I think restaurants
must be very very careful. They must say, we're not
going to cut the part of this business that is

(11:26):
ensuring a great experience at the restaurant level. Perhaps we're
just cutting the parts of this business that I think, Paul,
to your point, if you look at AI and data
and how it's affecting, for example, supply chain, if you
had a whole team of people who were in charge
of the supply chain and managing supply and logistics, and
suddenly you have AI that can do that very effectively, well,

(11:49):
maybe you don't need as many people on that team
because you have those tools that can do it for you.

Speaker 1 (11:54):
All Right, We're going to continue on the challenges in
the industry. Obviously, this isn't a doomsday podcast, we do.
We're going to talk about some good stuff too. Yes,
in the end to kind of get into that, I
want to talk about sales and profit. Obviously, one of
the biggest issues that we're already faced with as recording today.

(12:15):
We actually saw President Trump come in with not an extended,
a more amped up tariff on Canada on aluminum steel
went up to like fifty percent. But here's the point
I'm getting at is that this unsettling feeling I think
is probably in the gut of a lot of CEOs
right now, even in the food space, because they're like, hey,

(12:36):
what do we get from Canada? Because there could be
another target, whether it's Mexico or Canada. We've already seen
this will play a clip here from Scott Boat Ride.
But if you look at just the inflation impact on
American consumers, because this is going to trickle down probably
into a lot of other areas, not just steal in
an aluminum. But you'll notice here a couple of points

(12:57):
that this article is hitting on right here from Bloomberg
is they're really going after some of the core things
low income households. And this is where I'm going on this.
Let me kind of zoom in on that for everybody
that's watching this over on YouTube. Low income households who
spend a larger share of their budgets on goods, they're
wealthy and tend to favor cheaper imports. This is going
to bear the brunt of the hit on a lot

(13:18):
of these So this being the FAE the face of
potentially the restaurant industry as well, because QSR, fast casual
target that household. And if we do see some pressures
here from these other ancillary tariffs, do you think that's
going to have an impact on the industry here in
twenty five.

Speaker 2 (13:37):
Yeah, there's no doubt. There's no doubt.

Speaker 3 (13:39):
The National Restaurant Association wrote a letter to the Trump
administration saying that it would be about twelve billion dollars.
It would cost to the industry about twelve billion dollars. Now,
I cannot keep up with what wave of tariffs are
being proposed, and so that was perhaps a previous wave.
That number might actually be higher now I'm not sure,
but I think what you know, the Association is trying

(14:00):
to point out is you know, we import a lot
of food to this country. And if you think about
something like Mexico and avocados, I believe it's something like
ninety percent of the avocados in America are grown in Mexico. Something,
you know, incredible like that. So you know, tariffs they
have of course a huge impact on the food industry.

(14:22):
And so when you think about twelve billion dollars, you know,
you might say to yourself, Okay, in a one point
five trillion dollar business, is twelve billion dollars just to
drop in the bucket. But I think what you're getting
at here, Paul, is the fact that that twelve billion dollars,
especially if you hit a company, say a Mexican chain
that serves a lot of avocados, and they have no
choice but to increase their prices because of what they're
paying on those imported avocados, for example, then yes, that

(14:45):
will have a big impact on the low income consumer.
And I think to that article's point, you know, the
low income consumer, we are already seeing them pull back.

Speaker 2 (14:55):
You've already seen that inflation. Has they finally had enough
with inflation?

Speaker 3 (15:00):
With menu prices going up twenty five thirty thirty five
percent at a lot of chains. They can't take it anymore.
They're tidening the belts, they're pulling back. And if you
add this an additional layer in the tariffs on top
of it, if you have to increase cost of goods
that are imported from other countries getting these tariffs, yeah,
they're going to have had enough and they're going to
say I'm going to call it now.

Speaker 2 (15:21):
They have to eat so they you know, supermarkets are also.

Speaker 3 (15:24):
Selling goods that are affected by tariffs. So the unfortunate
reality is that there's not a great solution for low
income consumers. But we've seen throughout history that historically they
will they will cut back on restaurants first, if they're
cutting back on any expense.

Speaker 1 (15:39):
Well, and there are some there are some indicators out
there that restaurants are trying to almost position themselves as
an alternative option to even going grocery, to the grocery
side of things, or blending, because I see this in
a lot of families where they order something from a
takeout restaurant and then they'll backfill it, you know, at home,

(16:02):
whether it's a dinner or a lunch you know thing.
I mean, even our family does that and it's pretty effective.
I want to play a clip though for you. This
is Scott Boatwright coming in from Chipotle and he has
some interesting statements that he did in this in this
interview here with Bloomberg. Let me play this for you.

Speaker 4 (16:20):
Let's start with tariffs, because we can't avoid the elephant
in the room here, the single biggest way that tariffs
are making your life actual potlein more difficult.

Speaker 5 (16:29):
Of course, tariff's impact everyone here in the US as
we think about I know avocado supply is on the
top of mind for a lot of US consumers. It
is for us as you can imagine, we've gone through
what we believe to be a very sound vendor diversification
program as it relates to buying avocados. We buy everything
that we can possibly pick up here in the US

(16:50):
during the growing season that's here in California. But we've
also moved out of Mexico, which was about eighty percent
of our supply, to other countries like Dominican Republic and
even Colombia, and reduce the reliance to about fifty percent.
With further diversification efforts underway.

Speaker 4 (17:08):
So the diversification effort and the sourcing inside the US.
How has that affected the cost? Has it increased costs
for you?

Speaker 1 (17:16):
All right, I'm gonna pause it there. That was a
crazy question. Increased costs? Why would you if you're increasing
your costs? All right, but they are talking about diversification.
So that's at least one you know, tool in their
in their bin that they can go fight.

Speaker 3 (17:31):
Now.

Speaker 1 (17:31):
One thing it went on in that in that article
and then that video to say is that Chipotle is
not going to raise prices. My question to you how
long can they hold the line?

Speaker 2 (17:41):
That's a great question.

Speaker 3 (17:42):
And you know that that is a bet that this
is a short term thing. That's I think that's a
bet to say, Okay, you know, the tariffs are coming in,
maybe for as a short term uh you know thing
that happens, but eventually, perhaps whether it's you know, consumer
outcry or whatever it is, that perhaps they'll pull back
on the tariffs eventually, or if it's some political stalemate

(18:03):
that President Trump is you know, trying to get Mexico
in Canada to do something, you know, and they've bend.

Speaker 2 (18:08):
To his will, you know, whatever that is.

Speaker 3 (18:11):
I think Chipotle's probably betting that this is not a
long term thing that they're going to have to face
and that they can go back to their preferred avocado supply.

Speaker 2 (18:21):
So who knows.

Speaker 3 (18:23):
I think if there's one thing about this administration, it's unpredictability.
Nobody really knows. But to point out about the supply
chain diversification, I mean, one of the luxuries I guess
you could call it, unfortunately of the pandemic is the
flexibility with which companies were able to get around supply
chain you know, challenges because of course in the pandemic

(18:47):
we saw as the borders shut down, companies had to
get very creative in their supply They had to figure
out logistically, you know, how can I get avocados, how
can I get you know, vegetables, fruits, whatever it might be.
And they developed that muscle of okay, let's diversify our
supply chain. So that's a good tool to have in
your toolbox now when you face tariffs and you can

(19:10):
do as Scott was saying, which is okay, we're going
to go you know source of course from our local
California avocado growers, or go to Peru or Colombia, you know,
So that is a solution. The unfortunate reality is that's
also a logistical headache to have to do that. And
the fact of the matter is there are also parts
of this world that are you know, the soul growers

(19:31):
and certain goods.

Speaker 2 (19:32):
Right.

Speaker 3 (19:32):
So, Mexico is one of the premier avocado growers. It's
not the only one, but it's one of the premiere
avocado growers. So, and we all know what supply chain.

Speaker 2 (19:40):
Two.

Speaker 3 (19:41):
The other thing is, depending on how much you might
need of a certain good, you can't snap your fingers
and make a supply chain appear there. You know, growers
in years in some instances to get a crop planted
and harvested. So it's not so easy as to say, okay,
well I'm going to move my supply from Mexico to Peru.

Speaker 2 (19:58):
There we go. I've figured it out.

Speaker 3 (20:00):
You have to figure out things like, okay, well, who
are the growers, how long do they have before this harvest?
You know, how much volume is there, how much does
it cost? How do we do you know, do we
plan three years in advance and say we're going to
go and plan that we're going to have Columbia supply
some of our avocados instead. That is a headache. It
is logistics a nightmare really to some degree. So you

(20:21):
don't want to have to do it, but it is
a possibility that you can do it.

Speaker 2 (20:25):
Well.

Speaker 1 (20:25):
Okay, So with that being the case, we'll stay on
Chipotle here for a second because I want to show
some data to you, because this is to me, I
look at this, you know more from an analyst side
of things. I'll talk about that in a second. I mean,
we've been Saver has shifted a little bit of our
business model here recently into from really a podcast in

(20:45):
thought leadership only platform. We have another division where we
do investment and here recently we also opened up a
fund to do some investment in the restaurant space. I'm
paying a lot more attention to these these data points,
and one that I wanted to show you was this
right here. This is coming in from Chipotle's basically their
last quarterly and you'll notice here over twenty twenty three,

(21:11):
especially in Q one of twenty four, it's continuing to rise.
This of course is during price and for those of
you that are not watching this on screen, let me
zoom in on that. For you, Sam, looks like you're
maybe and maybe people aren't seeing completely exactly what I'm
showing here, but I want to make sure that in
twenty three we start to see pricing rising. You'll notice
here net margin continued to increase. So it's like fifteen

(21:33):
three three this was in Q two that was their
high point. Q three of twenty four drops to thirteen
eighty seven. This is net margin, and then Q four
I'm sorry, Q three Q four of twenty four it
drops to eleven point sixty six. So I'm looking at
declining margins here. In general, if you have declining margins

(21:58):
and now you have potentially enough pressure from this administration
that could push us into a soft recession, I don't
know if that's a word, but you're going to see
less activity, which obviously is top line sales. Yeah, how
can Chipotle not raise prices? It just seems like your
margins are down and your sales may be next. So

(22:20):
how would you be able to avoid that?

Speaker 3 (22:22):
That's at some point something has to give, and you
can hold the line as long as you possibly can.
And I love the you know, I love the optimism
and say no, no, we're.

Speaker 2 (22:31):
Not going to raise prices.

Speaker 3 (22:32):
We're not going to pass that cost on to the customer.
But again with the inability to you know, nobody has
the crystal ball to see what's going to happen six
months from now, much less even just a month from now.
You know, at some point, if this drags on longer
and longer, if in fact, we do go into a recession,
if that margin continues to drop, they have no choice.
They will have to raise prices because, you know, you

(22:55):
just something has got to give at some point. You
have to have marchin to be a viable business, and
especially a business like Chipotle. So it's not what they
want to do in a lot of instances, it's the
last ditch effort, but something's got to give.

Speaker 1 (23:08):
Yeah, I think this is the factor that almost every
restaurant chain is going to be looking at in twenty
twenty five because there is some shift here. There may
be maybe a silver lining here in the sense that
maybe there's some softening in the labor market which could
open up at least the ability to operate the labor
line a little bit better. We're definitely going to talk

(23:29):
about that here in a second. On the back half,
we're going to be talking about opportunities. So make sure
and stick around on that. And of course if you
guys did not know, this is something that you should
be aware of, is that Saber Capital is now out there.
We are out there taking deals. One thing that we
are doing more and more with SAVER is looking at

(23:51):
where the restaurant industry is growing. We think tech and
early stage fast casual are the markets. So if you
guys are interested, if you're whether you're a tech founder
or may be a fast casual operator and you're looking
to either get advisor or capital services, jump over to
Saber dot FM and just hit that services section right
there at the top. You'll see our capital and advisory page.

(24:13):
Get there, bill out the form. Maybe there's something that
we can do for you guys. Never know. All right, Sam,
let's get into the next section here, and I want
to talk about opportunities and there's several areas that potentially
could really shift the business a lot. This year, everybody's
been talking about AI. I mean, we've had so many
podcasts just on that topic alone. Do you think technology

(24:36):
integration this year twenty twenty five, not down the road,
can have a true impact on this bottom line for
the industry.

Speaker 3 (24:47):
No doubt, no doubt that technology will have an effect,
especially if you look at again, if your margins are
decreasing but labor costs are increasing, and you find a
way to invest in technology that can and again perhaps
replacer or reallocate some of your labor, you could potentially
save on your labor costs with the help of technology.

Speaker 2 (25:07):
So one very easy way to look at that.

Speaker 3 (25:10):
Of course, you could also, you know, say, well, in
your capital expensure expenditures, as you're growing and you want
to shrink the footprint of your box, leverage technology for
the sake of enhancing off premises business and ordering. You know, again,
there's lots of ways in which you can weave tech
into your business to save on your costs. And that
is a good thing. That's you know, that's been true

(25:32):
for the last many, many years. It continues to be
the case. Of course, ramped up in twenty twenty with COVID,
everybody started looking more and more at technology and how
it could help your business. And the fact of the
matter is there are a lot of ways now in
which technology almost has to be the solution if you
can't give anymore again on maybe your goods, but also
your labor or your buildout costs and you can instead

(25:54):
invest in some technology that that is maybe a one
time investment that you know will replace some of your
ongoing costs and labor. I think you have to do that.
So yes, this year, that technology is there, it's available
to you. It's more and more affordable, I think, especially
for some of the emerging brands, because before it was
kind of this playground for the maker chains. Yeah, I
mean young brands McDonald's are out here acquiring AI businesses

(26:15):
and building you know, young built to that new byte
division where you know they put everything under that one umbrella.
And that's great and they can do that as the
largest restaurant company in the world, But what can that
five unit burger chain do?

Speaker 2 (26:28):
What can that mom and pop do?

Speaker 3 (26:30):
And the fact of the matter is there's a lot
more now that they can do in twenty twenty five
than they could do even in twenty twenty two or
twenty three. There is technology that is affordable and available now.
I would caution we are also seen to some degree,
I think, some tech fatigue. An interesting study from the
National Restaurant Association that came out a few weeks ago.

(26:52):
It was their State of the Industry Report, they found
that I think it was twenty eight percent of restaurant
operators said that they were not getting proper ROI out
of their tech investments. And that was really fascinating because
it was something like it was eighty something percent who
said they're investing in technology, but only twenty eight percent
said they were getting any kind of ROI out of it.

(27:14):
And that's fascinating to me because I think your problem
here is there's a lot of bells and whistles that
you can become infatuated with in food technology. You think, oh,
customers want you know, voice activated AI, customers want this
shiny new toy, and you go in that direction. You
invest in that technology only to discover, well, it's not
really improving my profit margin substantially. It's not really you know,

(27:38):
doing anything for me aside from you know, moving this
business from here over to here. The customer once was
giving their order to a person, now they're giving the
order to technology, and it's really not you know, making
any extra money or anything like that, or not saving money.
So I think there is a little bit of the
fatigue in saying, look, we got top heavy with our
tech stack. We added all these layers we were told

(27:58):
we needed to have We fell for some of these
bells and whistles, and we're not making substantially more money.

Speaker 2 (28:05):
So what now?

Speaker 3 (28:06):
And that's the tech fatigue I think we're starting to see.
And so technology is not going to go away. They're
not going to you know, divest in the technology. But
I think as an industry, we all have to take
a step back, look at the technology we have that's
been developed and find out ways to take out layers
of the tech stack to integrate those you know, tech

(28:27):
the tech platforms that brands have already invested in, and
make it all work to the benefit of the bottom line.

Speaker 2 (28:34):
Because if you don't do that, operators will move on,
they'll give up.

Speaker 3 (28:37):
Last thing Paul say is more and more restaurants are
saying that hospitality is a differentiator. So it's sort of
ironic that in this day and age, where so much
technology is available to restaurant companies, they're talking more and
more about how the human experience is actually what drives
their business or drives their experience. And so I think

(29:00):
in twenty twenty five there will be a continued push
for more technology to improve the bottom line through efficiencies
and through cost savings, but I think you have to
find a way to leverage it in such a way
that you're not replacing that human experience, that hospitality that
can be a differentiator.

Speaker 1 (29:18):
Okay, so there's a couple things to unwrap there. One, yes,
I would agree. On the tech side, there's a lot
of technology out there that isn't really a product, it's
like a feature. And you're right, there's a lot of
these ninety nine dollars SaaS products. I talked to a
brand that last week. They said they started to go
in and try to figure out what was working. This

(29:38):
was a small, small brand, and he said because so
many of the operators they kind of let their guys
run on their own, they ended up turning credit cards
off to see what would break because each one of
them had so many of these ancillary charges of different products, features, marketing,
this all sorts of back office integration stuff that's been

(29:59):
out there. So I would agree. I think we're probably
going to see either a consolidation or maybe some roll
ups in terms of the tech industry, or at least
the food service space for twenty five. As far as hospitality,
this is something that this is a conundrum to me,
because you look at what happened after COVID, you would

(30:21):
think that hospitality would have really accelerated, like people were
just ready to go back and workers were ready to
serve customers and all that. And it feels to me
like third party got in the way of hospitality because people,
It shifted the dining habits, It definitely shifted the behaviors
of consumers, and now I think it's shifted the expectations

(30:46):
of operations because we've seen declining sentiment around consumer satisfaction
numbers not necessarily coming back for food service operations. So
my question would be to this is if you've note
if tech is being pared down and AI isn't necessarily
ready just yet to pick up some of the slack

(31:08):
of hospitality, and you have a workforce that now looks
at the restaurant industry. I mean, I think we've done
more damage to the industry in the last three to
four years than we've done maybe in the last three
decades in terms of worker perception of working in the industry,
and they don't really want to work here. So how

(31:30):
is hospitality going to come back without the aid of
tech or at least some sort of big shift in
the workforce. What are your thoughts.

Speaker 3 (31:39):
Yeah, I mean it has to be aided by tech.
And I'll give you an example. So Denado's Pizza based
here in Columbus where I am. You know, they have
invested in automated pizza equipment, automated kitchen equipment that will.

Speaker 2 (31:55):
Sauce and cheese and slice a pizza.

Speaker 3 (31:58):
And I've seen it firsthand here in kitchen and Columbus,
and you know it's it's robotics for sure, and it's
it's fancy and fun and they're rolling this out to
some degree throughout their system. But you know, I spoke
with CEO Kevin King recently, and you know, he's very
careful to point out, as a lot of restaurant companies
are always very careful to point out when they talk
about investing in AI. They don't want to say we're

(32:19):
not replacing employees. This is not becoming a fully automated,
no staff kind of thing. He's saying, it's it's you're
again reallocating that labor to the.

Speaker 2 (32:30):
Front of the house.

Speaker 3 (32:31):
And Denado's is you know, it's a QSR pizza joint.
You know, you walk in for the most part, people
are placing their order on their app or online and.

Speaker 2 (32:40):
They walk in. All they need to do is pick
up a pizza.

Speaker 3 (32:42):
But if before you know, somebody is having to rush
out of the kitchen to say, what's your order? Oh yeah,
here's your pizza, you know that there's that experience. Now,
perhaps with more automated equipment in the kitchen, you have
a couple of smiling faces at that table and say,
let me know your order.

Speaker 2 (32:57):
How's your day going, by the way, while I get
that order.

Speaker 3 (33:00):
So the point is is that in picking up a
lot of the responsibilities of your kitchen staff, AI gives
you the ability to really emphasize the experience, the hospitality,
the smiling, friendly employee in a way that I don't
think we have before because I think Paul to talk
about perception of the industry and working in this industry,

(33:20):
of course, it was always the industry of burger flippers, right,
and you know, you had this perception that it's the
bottom rung and I'm going to stand there flipping burgers
for hours just to make a buck, right and by
and large, to make minimum wage. And the fact of
the matter is that today it's easier than ever to
run a restaurant kitchen, right, there are so many of
these things in some instances, at some restaurants, the burger

(33:41):
flipping itself is robotic. You know, that's not widely available,
but that's that's a thing you can have if you want.
And so if you replace some of these menial tasks
with robotics in AI and instead tell the employee, you know,
why don't you come out into the front of house
and you know, refill some beverages and smile and say
hello to the customers, then you're creating that great experience.

(34:05):
And so so again, the tech is complementing your labor
and giving your employees, you know, a little bit of
an easier job, maybe a more fun job, even so
that they can feel like they're empowered to go give
great hospitality.

Speaker 1 (34:21):
Yeah, I totally agree that the industry has a bad rap,
but it's one that you know, has been kind of
earmarked over the last you know, the last decade or so,
especially when we lost so much of the industry during
the pandemic. But I would agree, I think there are
maybe some shifts occurring, especially as you see the transition

(34:42):
of the current C suite, because we are starting to
see a bit of a transition in terms of demographic
that's that's sitting in these C suite jobs, which in
my opinion, is probably going to be the gateway to
possibly drawing in a different kind of workforce. That to
your point, Listen, we've got a lot more different jobs

(35:03):
now that completely are much more attuned to maybe doing
some other startup work or you know, other industry, fintech,
you name it. It might be more fun, and I
think that that would be the draw in. I want
to stay on topic here on the positive side of things.
When you look at consumer trends and then also growth
projections for twenty twenty five right now, I know you're

(35:25):
looking at a lot of numbers and a lot of
data from a lot of the big brands in terms
of unit growth, et cetera. If you could sum it
up and say, is twenty twenty five a growth here
or not a growth here?

Speaker 2 (35:36):
I would have given you a different answer six months ago.

Speaker 3 (35:39):
Right I think that at the end of twenty twenty
four there was a lot of optimism for twenty twenty five.
We all thought, oh, it's going to be a growth here.
Inflation has surely peaked, you know, all signs point to
more capital flooding the market, you know, more emerging brands
getting that deal they were looking for, you know, more

(36:00):
more opportunity, right. You know, I attended the Finance show
in Las Vegas the week after the election, and I
mean I think you were there to Paul maybe it
was very positive, Yeah, very positive they were getting and.

Speaker 1 (36:14):
Nobody was like over the moon. Yeah totally.

Speaker 3 (36:17):
And look, you know not this not a political statement,
right or left. I think the the opinion at the
time was just a business friendly administration is coming in
and is going to improve a business climate for restaurants
in all industry, and that is going to be a
good thing. The unfortunate reality has actually been that again,
there's a lot of volatility. There's a lot of unpredictability

(36:39):
with the Trump administration. You know, no matter whatever his
endgame is here, the decisions so far have been kind
of all over the map.

Speaker 2 (36:47):
And when you know, it creates that volatility.

Speaker 3 (36:49):
I mean, you and I are talking a day after
or two days after, you know, the Dow plunged eight
hundred some points.

Speaker 1 (36:55):
Well it just took another hit this morning because of
the increased tariffs on aluminium steel.

Speaker 3 (37:01):
So yes, yeah, yeah, so you see the direct impact
of what's going on just politically in the administration, but
also on top of that, you have consumer confidence has plunged.
You see, inflation has not in fact peaked, and in fact,
you know, there are some indications that maybe it goes
back up again. Now we're talking, oh, maybe we're going
to go into a recession in twenty twenty five. So

(37:23):
you know, the unfortunate reality is that there was a
lot of optimism and perhaps that on that optimism was unmerited.
And I don't think twenty twenty five is going to
be a growth here in the long run, although I
will say it depends on what metric you look at growth. Right,
we may may see yet some top line growth. Some
companies are going to be just fine with top line,

(37:45):
but as we've already talked about, you know, the bottom
line is probably not going to marketly grow. Unit growth
will be pretty stubborn. As you know, capital kind of
stays on the sidelines. So it's really hard to say,
you know that this will be a growth year unless
you're trying to look into some of the minutia of
things and say that that might be growth.

Speaker 1 (38:06):
Okay, so I have a maybe a contrarian position on
that only because it's possible. And then this again is
more it's not I wouldn't call it conspiracy theory level,
but you know, it's looking at the market and also
the guy who's leading the market, which is Trump, and
you consider some of the positions. This is a business guy,

(38:27):
that's you know, he understands financing, probably more so than
anything other than real estate. And one thing that is
happening later this year is the government has nine point
two trillion in government debt that's going to be I
think it. It's going to need to be refinanced later
this year. So if he is constructing I'm not saying

(38:47):
that this is happening, but if he is constructing a
push on the market enough to get the Fed to
lower the federal funds rate, meaning interest rates, and we
see interest rates start to decline, which means potentially for
businesses and people investing in businesses, Okay, interest is coming down,

(39:08):
I can start building again. It's possible we could see
an almost about face on this now. Granted we are
definitely teetering on the line of going too far, I
would agree. I did a poll this morning on x
let me see what was the results so far? It
is about four hundred votes in there. And I asked

(39:28):
the question, I'm looking at the poll right now. Trump's
knew fifty. This was on THEA and the Canadian steel
and aluminum terraffs, but it was just in general, should
he continue to push on terraffs? And right now the
audience is split. Right now, it's fifty one point two
percent no and forty eight point eight percent yes. So

(39:51):
that's that surprised me a little bit. I thought there'd
be more of people still pushing no. You know, the
US is getting a bad rap, that kind of thing.
So maybe Trump will pull back a little bit. And
if he does and the FED does lower rates, I
mean that's good for franchises. It's good for capital expenditure CAPAX,
which always usually means more jobs. The question is is

(40:15):
does it mean more revenue into the bottom line. So
I'm kind of with you on that is, we may
not see the revenue numbers, but we may see growth
in terms of building units. Are you seeing any of
that right now? Yeah?

Speaker 3 (40:26):
I mean I would say what you just described is
absolutely a possibility. Right that is, I think there is
a best case scenario here, that leads to interest rates
coming down, that leads to more investment in the space,
that leads to more willingness to grow one hundred percent.

Speaker 2 (40:43):
I think you're right.

Speaker 3 (40:44):
I think the hard part about this is again some
of the unpredictability, but also the fact that you know,
so far tariffs are more an idea than they are
you know, an actual thing that's hurting our wallet. Right,
So I think once tariffs do be you know, come
into place and actually impact the market, which could take months,

(41:06):
is the big one.

Speaker 1 (41:08):
Yeah, that's the date that almost all this stuff goes
into effect. So that's most right now it's market allegedly second,
and then this might have been an April fool's joke
all along.

Speaker 2 (41:22):
Nothing surprises me anymore, Paul, I will say.

Speaker 1 (41:24):
That a trillion off the uh yeah, Like, you.

Speaker 3 (41:28):
Know, look at the end of the day, the consumer
is is what what the consumer feels is what goes.
And what the consumer is going to potentially feel is
strained in their expenses and they're going to feel hit
on all sides. I mean, look at the auto industry
and if some of these tariffs come down for auto

(41:49):
and you know, for the automotive industry and and you
know new cars cost is up to twelve thousand dollars
more or whatever they were reporting. You know, the fact
is on all ends we could feel you know, cost
go up, and if that happens, and if consumer sentiment drops,
then the administration will respond to that presumably, right, So

(42:10):
like it's I think there is a perfect version of
what you explained where this could end up being a
positive for the economy and it does lead to more
investment and growth because of interest rates coming down. But
the sad reality is is that you know, you pull
one lever and it affects you know, eighteen different things
over here, so you run over and pull this other
level of effects eighteen different things over here. And it's

(42:32):
just almost like a game of whack a mole that
it's just really hard to read what it will actually
do to the consumer marketplace.

Speaker 1 (42:41):
And I've never seen anything like this. I've never seen
anything like this market right now, the way that it's
responding to these just these blurts. It seems like from
the White House that's coming in. Let's continue on the
track because I have two other questions that I want
to get to you before we end up here. Sure,
a couple of things is around value and loyalty and

(43:03):
really kind of this shift toward how And there's two areas.
One is on the B two C side, how businesses
are getting consumers to create more loyalty to their brands.
And then ironically on the B two B side. And
this is something that I wanted to show because this
was over on your website. I'm not sure who wrote this.

(43:25):
Let me was it was it you that wrote this
or who was the author of this Katie Kate Finley? Okay,
so Kate wrote this article over on Nation Restaurant News
and it is called B to B influencer marketing gains
gains traction? All right, So this is on the B
to B side, which was really got my attention because
this is something that we talk about all the time.

(43:48):
And it's interesting because I've started to see a reach
out mostly from food companies and tech companies to even
companies like us that are that are I would say
we're more of that B to B influencer because we
talked with a lot of brands and so we could
easily drop a name. But what do you guys see
in terms of the influencer market? Do you feel like

(44:09):
this is a thing. Is it a fad? What's going
on here? And is it even meant for the restaurant industry?

Speaker 2 (44:16):
Yeah?

Speaker 3 (44:17):
I wish I could tell you it was a fad,
because now that I'm an old man, I don't understand
the influencer marketplace nearly as much as my younger counterparts.

Speaker 2 (44:25):
But no, it's not.

Speaker 3 (44:27):
It is is certainly here to stay in some form
or fashion. Of course, things change every single day when
it comes to social media. Whatever trend or you know,
whatever anybody's talking about on social media changes every single day.
But the format of certainly video, of the social media apps,

(44:47):
the community that you have in your social media app,
the format of personal brand, so the influencer as the brand,
these are things that are not going away. It's something
that even in media we're contemplating. Because for us, I'm
sure you are, Paul, like, we're figuring out okay, you know,
we media, we transition from print to digital, We transition

(45:07):
from digital to you know, sort of the first version
of social media, which was just posting on Twitter and Facebook. Yep,
this is version two and it is very video driven
and as you and I speak here, right, this is
a visual video mo.

Speaker 1 (45:22):
Oh yeah, this will get club clipped into several shorts
and totally that I see the impact obviously, we you know,
we're zeroing in on Saver. We've got almost two hundred
thousand subs on YouTube. We just clipped on our other network,
which is Finance and Tech Crypto, we clipped over one
point two million subscribers. And I am amazed every day

(45:47):
at the amount of outreach to our company that our
brands or businesses asking us to do stuff. You know
that our influencer based. So I would agree. I think
it's going to stick around. The question to me has
always been, you know, where does the line draw? You know,
where does that line I get that, you know, sponsorships

(46:08):
and you know sports listen, the sports industry has been
laden with this forever. You know, Nike signs Lebron, he
does a shoe, and you know, I get it. I
understand that that's you know, but in the area of
the restaurant industry, I'm often wondering if if it truly
I just don't know. I'm still I'm still at a

(46:29):
quandary with this one.

Speaker 2 (46:31):
Yeah, and it's a couple of things.

Speaker 3 (46:32):
I mean, the first thing I'll say, is that social
media really kind of flattens the media world in that
everybody is media now, right. So you have your traditional
role of take nations restaurant news, for example, as a
BDB publication, we have that traditional role of being between
the restaurant brand and the restaurant manufacturer.

Speaker 2 (46:52):
And we still are.

Speaker 3 (46:53):
We still happily serve that role, and I you know,
I'm optimistic that we will continue for generations to come.
But the fact of the matter is is is when
we look around us, you know, we of course are
not the only game in town. And that is not
just other traditional publications that we compete with. It is
just people out there who decide I'm going to have
a sub stack.

Speaker 2 (47:13):
I'm going to have a lind I'm going to have a.

Speaker 3 (47:15):
Podcast, and you know what, power to them if they
find their audience. That's the great thing about social media
and multimedia in general is that you can go find
the resource that speaks to you in the best possible
way that you understand and that informs and educates and
enhances what you're doing.

Speaker 2 (47:32):
And that's great.

Speaker 3 (47:33):
So I would never take away from anybody who's building
their own little brand as media even if they're outside
of a traditional media organization. But but it's also makes
up for a lot of noise, and so.

Speaker 1 (47:47):
Yeah, how do you identify the signal from the noise?
That's the that's the challenge that I often see is
that if you don't, maybe it's going to go like this, Sam,
maybe we're going to see a layer of influencers that
are high, high quality that could compete, I won't say compete,
but could rival or at least get in the same

(48:07):
discussion with traditional media outlets. Because I think that's probably
happened in the political news arena. I think we're there now.
Maybe it will happen in food or retail possibly, But
to your point, yeah, how do you discern the just
the noise that's in yeahdustry, some.

Speaker 2 (48:26):
Other factors at play here.

Speaker 3 (48:27):
I mean, one thing is I've read studies about burnout
among influencers.

Speaker 2 (48:31):
And you know, this is.

Speaker 3 (48:32):
A while ago that I read this, but at the time,
this was maybe two years ago. They said that the
average influencer burns out after about three years. So there's
a problem inherent to this, which is if I'm an
influencer and I gain a huge audience and it's my
face at the center of that. Well, when I decide
it's time to give up that brand is gone, I
don't pass it on to the person who is in

(48:52):
line for that job. So that is one factor at
play that influencers will burn out because the pressure to
create is in tense, and especially in this day and age,
where you have to kind of say the right thing
or you're going to offend somebody, like you're walking a
tightrope at all times. So that will burn people out.
But the other thing is is that the pendulum is

(49:13):
always swinging right. I mean, this is true politically, this
is true with a lot of things, which is right now.
We're all about the personal brands, the influencers, and at
some point the pendulum may swing back to where it's like,
you know what I want, not an individual personal brand,
I want just you know, a media brand, a reliable source.
My loyalty goes to nr N because I've read them
for decades, you know. So either way, we have to

(49:36):
meet them where they are. We have to meet them
on social media where they're looking for video, or we
have to meet them in the print publication. We still
print every single month, and we have to trust that
the audience will find their way depending on how they
tend to learn best. But it is that noise that
is really hard for us to deal with and the consumer,
you know, especially when you're trying to figure out who

(49:58):
do I follow, who do I believe?

Speaker 2 (50:00):
It's it's all over the place.

Speaker 1 (50:02):
Well, it's a cycle.

Speaker 2 (50:03):
You know.

Speaker 1 (50:04):
I've been in media since the mid nineties, and I
remember when we first started publishing in the mid nineties,
we launched a website and at the time, you know,
media was still mostly print and it was when in
our end was Lebar Friedman. I think at the time
it was still Lebar Friedman. And I remember when that

(50:24):
was a weekly magazine. Yeah, crazy, right, I imagine that
every week it was like the little Bible that would
always come in the mail. And you just said, it's
a monthly publication. Now it's monthly monthly. Wow, times have changed.
But my point being is that, you know, we started
off with the web. Nobody thought that even the Internet

(50:44):
was going to be a thing. And then I merged
our business at the time, which was fast Casual and
QSR Web, and we merged over the NetWorld. Things started
going more digital. But even then, my partners at NetWorld
because at that time it was I think twenty two
thousand seven or eight, and I said, guys, we've got
to double down on podcasting and video. We just have

(51:07):
to do it. We just got to double down on
podcasting and video right now. We cut our first podcast
in two thousand and seven and it did terrible.

Speaker 2 (51:15):
No no listeners.

Speaker 1 (51:17):
Nobody was listening. We had like five listeners. Yeah, so,
and I think they're all our friends.

Speaker 2 (51:23):
Yeah.

Speaker 1 (51:24):
But my point is is that maybe that we are
entering an era like that, is that we don't know
what we don't know yet because who knows what's going
to happen with AI. The integration of even media itself
is probably going to speed up. Short is already going
like crazy. So yeah, I don't know. It's going to
be a funky next decade.

Speaker 2 (51:45):
All right.

Speaker 3 (51:46):
When I'll just real quick on that, I'll say that
one thing that my my boss, Joe Donnelly, our president,
he and I talk about all the time is if
we don't if we don't follow this path into video
and social media, ten years down the line, we're irrelevant
because today's Jenry, you know, audience member, is tomorrow's CEO.

(52:07):
And if tomorrow's CEO wants video on TikTok to inform
them on the restaurant industry. We have to start that
now for sure.

Speaker 1 (52:13):
Hey, listen, we'll be happy to help you.

Speaker 2 (52:17):
I noted.

Speaker 1 (52:18):
Listen, let's hit on the last question here, and this
is about third party delivery off premise. You know, catering
has grown. We you know, it was a fairly good industry.
We saw a little bit of the explosion again during
the tougher times of the industry, but third party really
made its its statement. It probably is what I still
believe it's what saved the restaurant industry because we would

(52:42):
have had a lot more casualties had that not been
a potential, even though we had a lot of casualties.
But here's my question to you. Now, I feel like
third party continues to take advantage of the industry in
terms of these fees. Do you think we're going to
see these fees come down? And do you think they're
going to openly start sharing data with the industry without

(53:06):
some pressure, because right now, I mean, other than grub
hubbling off some people last year and Postmates and Uber
still fighting it out to a certain extent, what are
your thoughts on third party Do you think it sticks
around for a long time or what's your position.

Speaker 3 (53:22):
Well, the answer to your first question is nope. I
don't see fees coming down. I don't see the sharing
of data. I don't see them sharing data because why
would they, Why should they?

Speaker 2 (53:30):
They don't have to.

Speaker 3 (53:30):
They have all the leverage in the world, alizaar, I mean, yeah, look,
if you take a step back and look at this,
it's amazing because in you know, I agree with you
on the fact that if the pandemic had happened in
twenty ten, eleven twelve, what would this industry be because
it didn't have that in its back pocket. But when
it happened was almost like bizarrely perfectly timed that door,

(53:53):
Dash and grub have had just come up and they
became this great solution. So I agree with you that
they really saved the industry in a lot of ways.
The problem is is even then we were talking about
it as the necessary evil, because it was like, well,
what other option do you have?

Speaker 2 (54:06):
This is where the consumer is going. You must be
where the consumer is.

Speaker 3 (54:10):
These are marketing platforms as much as anything to get
in front of people. And if you're not doing it,
you're going to lose out. And you know, for a
little bit there in the pandemic, I wondered about, you know,
maybe there will be alternatives come up. Maybe there will
be I always thought maybe if you could figure out
some sort of CoSystem where local business come in together
and they invest in delivery drivers or something.

Speaker 2 (54:28):
There's got to be something. It never embers happened.

Speaker 3 (54:31):
And so until the alternative emerges, what you're going to
see is third party can continue to consolidate, continue to
gain the leverage, and continue to use that as a
cudgel in the industry and say, wow, we can keep
charging these fees and not share our data because there's
literally no other option that you have but to do so.

Speaker 1 (54:51):
It's that the consumer might put some pressure on that,
because I mean, pricing right now on a Chipotle bowl
through Uber this is out of hand. Guys, come on.

Speaker 3 (55:00):
I agree, well, and I think it changes consumer behavior
and you decide to get in your car.

Speaker 2 (55:03):
At least that's what it has been for me.

Speaker 3 (55:05):
I will look at I'll go through the door dash thing,
I'll look at what it's going to cost me in fees,
and I say, well, it's two miles five minute drive
versus ten dollars in fees?

Speaker 2 (55:15):
What do I value more?

Speaker 3 (55:17):
And it depends on my mood or money, and yeah,
and I think the consumer, the average consumer is probably similar.
I think it was the Domino's earnings call recently where
they talked about the fact that they see some indication
that the low income consumer is pulling back on delivery
in particular. And I think that's where we're going to
have to watch very closely. Is I mean the low

(55:37):
income consumers is pulling back on restaurants spending in general.
But I mean, of course they would pull back on
something that comes with layers of fees, like third party delivery.

Speaker 2 (55:47):
So it will be fascinating to see what.

Speaker 3 (55:49):
Happens with that in twenty twenty five, because I think
that's the only thing that forces the hand of these
third party companies is if consumers just say forget this,
this is.

Speaker 2 (55:58):
Not worth it.

Speaker 3 (55:58):
I'm gonna drive the mind and get off my couch.
And if that happens, they will be forced to make
some sort of change.

Speaker 1 (56:04):
Well, and I think it's been a you know, it's
a hard business to make money at these logistics companies.
There's a lot of overhead in it, and granted a
lot of them are trying to go into more automation.
If we do see some sort of robotic, real true autonomy,
whether it's in vehicles or in the actual robots themselves
that are coming, maybe we get to a commodity product,

(56:26):
but it's probably a decade away, you know, before pricing,
you know, because the competitive nature I think of AI
could get you into a layer of building out a
logistics system as elaborate as what Uber and Postmates have
you know now in the marketplace. So, man, Sam, this
has been a good one. I love chatting with people
that really dive deep on this, so it has been

(56:48):
great having you on the show today, and thank you
so much for stopping in. We appreciate it.

Speaker 2 (56:52):
Thanks for having me, Paull You.

Speaker 1 (56:54):
Bet all right, you guys. As I said, if you're
not tuned in to us over on the YouTube channel,
if you're watching this you are, make sure and hit
the like and subscribe button right now. And of course
if you are listening to this over on Spotify or
Apple iTunes or iHeartRadio, just give us a like over there,
or if you want to jump over here and catch
the video version, because we do a lot of sharing,

(57:14):
you know, data and video and all that kind of
stuff here on the show. Check us out over there
just at saber FM. Search that and we'll catch you
guys soon. Right here on the restaurant Report,