Digitalizing The Restaurant

According to McKinsey, the global market share of food delivery has tripled since 2017. Online ordering has become a major preference of customers who can afford it. However, the introduction of new technologies can introduce demand shocks to quick service restaurants (QSRs) and lead to critical changes in their daily operations and logistics. A partner firm with over 70 QSRs in Colombia implemented online ordering via a third-party platform. We measured the impact of the tech-enabled delivery demands on the restaurants and employees, both before and after the platform’s integration.

How do QSRs adapt to technological changes? What impact does this have on workers’ wellbeing? How do managers allocate resources and workers during periods of demand shocks?

Restaurants saw an overall increase in demand which was concentrated during peak hours (lunch and dinner). This shift, coupled with the fast-paced nature of the food service industry, can create challenges for workers and managers. The phased roll out of the service gave little control to managers as to when the delivery channel was implemented, and hence little opportunity to prepare for the shock caused by increased demand. Since each store implemented the app delivery service at different times, we can measure the impact of the app on an array of store performance indicators. Almost all production processes, employee and manager functions, and capital are, by design, identical across the restaurants in our sample. This made our empirical research reliable and consistent. We were also given access to records of how managers allocated shifts and trainings to workers. This personnel data allowed us to understand the social dynamics that may be playing a role in worker wellbeing and productivity.

Our research shows that:

• Managers dealt with volume increases by rescheduling employees’ shifts to better meet times with peak demand.
• This meant increasing the number of shifts and the number of short notice reschedules per employee.
• Managers also chose to increase investments in refresher trainings, aimed at diversifying the skill capacities of workers so that they can be easily allocated in different roles.
• Interestingly, we found that QSRs which achieved a gender balance between management and workers did better in driving sales and productivity.
• Gender imbalanced QSRs, on the other hand, see higher turnover and absenteeism along with lower productivity.
• This suggests that ensuring gender equity can play a big part in navigating sudden changes to a restaurant’s operation without losing workers to an environment of stress.