Few businesses have endured as much volatility during the COVID-19 pandemic as restaurants. While some industries saw demand fall through the floor, quick-service brands had to deal with fluctuations of demand and an explosion in their fulfillment practices, as millions of orders went from in-store to take-away or delivery.

Yet the problems troubling restaurant owners today are not a major departure from challenges they have been grappling with for years. The challenges of digital transformation have left many restaurants at a disadvantage—unable to strategically plan for demand anomalies driven by external forces, leaving many businesses effectively “flying blind” while trying to manage staffing, inventory, supply chain complications. Amid a growing labor shortage and a seemingly endless string of new variants, there’s never been a more important time to look at these long-standing challenges with fresh eyes, and fresh tools.

Because leading quick-service and fast-casual brands are getting an edge on their competition by leveraging smart data in their demand forecasting and planning by pre-emptively identifying demand anomalies that are hard to predict and prepare for without the right external data. Understanding why demand fluctuates equips businesses with the intel to strategically map out their operations; making them more resilient, profitable, and successful along the way.

When we discuss measuring changes in demand patterns driven by external forces, most quick-serves start with planned events such as sports games, ticketed concerts and other scheduled moments in time. These are impactful and must be tracked and factored in, but the problem with focusing only on these attended, scheduled events is that it overlooks some critical blind spots for accurately qualifying the volume of resources that will be needed to ensure customers, staff, and your operation come out on top. In order to become truly operationally efficient, quick-service restaurants must look beyond the ticket booths and consider alternate factors like spikes in foot traffic driven by school holidays, weather changes, public health ordinances and college calendars, as disruptions around stores.

For instance, I typically grab a coffee after I drop my children off at school every morning. As loyal of a customer as I may be, when school is closed for a holiday or if it were to suddenly transitions back to virtual learning, the need to stop and purchase a hot beverage becomes obsolete. My demand, and that of thousands of parents just like me, disappears. While the dotted-line between my neighborhood coffee grinder’s bottom line and my children’s school may not be an obvious one, this minor adjustment in behavior actually impacts the bandwidth of the staff working that day, the amount of goods sold or wasted, and ultimately, the business’ ability to remain competitive. These patterns are everywhere: college in session has a big impact on many brands, as do people needing a quick bite before or after a sports game, festival or concert. Discovering exactly how these external factors impact your stores through customer demand and footfall reduces the risk of volatility and allows management to increase operational efficiency and grow revenue.

Understanding what drives demand around each specific restaurant location means business owners and managers can be competitive in the war for talent—particularly as an unprecedented 920,000 food service employees resigned in November 2021 alone. Many of these employees opted to quit because they got fed up with constantly being understaffed, and in turn dealing with frustrated customers that expect faster service. By using smart data to reduce forecasting and planning errors, businesses ensure staffing schedules accurately reflect the number of employees needed for the forecasted volume of demand that day, equipping workers with consistent schedules and access to the resources they need to succeed. It’s not only a good practice when it comes to employee retention, but also the business overall, helping many restaurants avoid reducing business hours and additional strains on an already overburdened staff.

And it’s not only employees who come out on top. Accurate demand forecasting enables quick service restaurants to optimize operations, which ensures consistent, high-quality customer experiences in all locations, all year-round. When it comes to profitability in fast food operations, all roads lead back to forecasting and planning accuracy. If a business is under-forecasting—forecasting less demand than there will actually be—this leads to restaurants being unprepared for a surge of orders and out-of-stocks, while over-forecasting could result in excess waste, high disposal costs, and other unsustainable business practices caused by errors in predictive data. In fact, it has been found that even a 1 percent in error reduction can result in $3.4 million in benefits per year for some businesses. By investing in their demand forecasting and planning today, restaurants can future-proof their businesses by increasing employee retention while delivering a great customer experience, leading to more efficient operations and improved profit margins.

Ultimately, while there is no “silver bullet” for restaurant success, better planning and forecasting goes a long way to becoming operationally efficient, saving restaurants millions of dollars along the way. As the pandemic continues to ebb, companies that are best able to anticipate and respond to demand mutability will not only be the most resilient to risk—they will also be primed for the best overall business outcomes.

Campell Brown is the founder and CEO of PredictHQ, the demand intelligence company that empowers global organizations to anticipate changes in demand for their products and services. PredictHQ’s demand intelligence API aggregates events from hundreds of sources and verifies, enriches, and ranks them by predicted impact so companies can proactively discover catalysts that will impact demand. With PredictHQ, businesses gain a leg up on the competition and remain confident in their ability to meet customers’ ever-changing needs. 

Business Advice, Employee Management, Outside Insights, Restaurant Operations, Story, Technology