Category: NDLS

NDLS – Noodles & Company Finds Omnichannel Approach Boosts Top Line Results


The pandemic may be easing, but a recent PYMNTS report in collaboration with Paytronix found 92 percent of vaccinated consumers said they plan to stick with mobile and online order-ahead, curbside pickup and delivery capabilities that gained traction during the pandemic. The study has raised the stakes on the customer data they collect. Each piece of information, such as order history, birthdays and time of day orders are placed provides more ways to create a seamless guest experience.

Digital transformation appears to have permanently altered consumers’ expectations for both in-pe

rson and digital food ordering experiences. This means that restaurants must offer the technologies, loyalty programs and other features that allow consumers to order, pay and receive the personalization they crave across all channels.

The July edition of the Order To Eat Tracker® examines how restaurants are working to meet consumers’ digital-first expectations and building multichannel dining experiences, as well as to drive more on-site restaurant spend as customers return to physical locations.

Around The Order To Eat Landscape

 New food services data reveals 25 percent of online orders placed last year were for delivery, but how the food got to its destination was a factor. The 2021 Paytronix Order and Delivery Report found that brands with in-house drivers reported 44 percent of orders placed for delivery, while those using third-party services saw 12 percent. Meanwhile, a Paytronix spokesperson told PYMNTS that sales generated via digital ordering platforms more than tripled after the pandemic’s onset.

Ghost kitchens are expanding. The nation’s fast-food chains, including Burger King, Wendy’s and Chick-fil-A, are interested in developing more cooking spaces that can help them fulfill online food orders that are then delivered by third-party delivery services. Dan Rowe, CEO of Virginia-based franchise development company Fransmart, recently stated that it is cheaper and faster to serve customers via virtual or ghost kitchens, as these third-party operations typically optimize food preparation.

A recent study examining

hot-button issues in the restaurant and food services sector is spotlighting an impending food fight between fast food and fast-casual eateries. The survey of more than 1,800 Americans in April found it’s unclear whether fast-casual brands can win back customers they lost to fast-food restaurants in the past year. So far, data suggests long wait times are making fast-food restaurants vulnerable as they compete for diners. However, brands that boosted technology and logistics investments to deliver fast and friction-free service during the pandemic are leveling the playing field.

For more on these and other stories, check out the News & Trends section.

Noodles & Company On Digitally Innovating To Help Drive Brick-And-Mortar Sales

The pandemic forced the restaurant industry to adapt overnight to higher volumes of mobile and online orders as well as skyrocketing demand for digital and contactless payment innovation. Investing in omnichannel approaches is helping these eateries not only meet consumers’ new digital-first expectations but also refuel brick-and-mortar sales as consumers begin to eat in public once again. Colorado-based fast casual chain Noodles & Company is one such eatery that has harnessed digital innovation to drive stability amid the restaurant industry’s ever-changing landscape, according to Brad West, the business’s chief operating officer. In this month’s Feature Story, West details Noodles & Company’s transition to a digital focus and how the chain is rising to meet consumers’ expectations, no matter the channel.

To get the full story, download the Tracker.

Deep Dive: Taking A Holistic Approach To Fueling Restaurant Spending

One of the best ways to keep customers loyal is to engage them with personalized offers and promotions. About 95 percent of loyalty rewards program members have expressed a desire to interact with their favorite restaurants using the latest technologies and digital channels. This means that restaurants must support tools that serve customers regardless of whether they are ordering in person, online or via app. This month’s Deep Dive explores the importance of taking an omnichannel, holistic approach to driving restaurant spending by using digital ordering channels to support both in-person dining and takeout sales.

Read the full Deep Dive in the Tracker.

About The Tracker

The Order To Eat Tracker®, a PYMNTS and Paytronix collaboration, is a monthly report that examines the restaurant sector.


NDLS – Noodles & Company Launches Test Ghost Kitchen In Chicago

Fast casual brand Noodles & Company has launched a test of its first ghost kitchen in Chicago’s Humboldt Park, the company announced.

The ghost kitchen, which joins 20 other Noodles & Company locations in metro Chicago, will allow fans of the eatery to order their favorite items through the chain’s app for quick pickup and delivery, or through third-party delivery services like DoorDash.

“As Noodles continues to accelerate its growth, launching a ghost kitchen creates a cost-effective option to expand the brand within an established market by introducing a location that doesn’t require the physical space of a traditional restaurant,” the company said in a news release.

Stacey Pool, chief marketing officer at Noodles & Company, said the ghost kitchen is “integral to our overall digital strategy as we work to develop faster service through our digital channels with lower overhead and labor costs, all without investing in a physical brick-and-mortar location. And because our food travels so well, guests never have to choose between quality and convenience.”

The company says its digital sales grew 110 percent in the first quarter of 2021, accounting for 62 percent of sales. The ghost kitchen, it says, supports the changing behavior of guests, even as diners go back to their pre-pandemic habits.

“We feel very encouraged by the growth of our digital business,” Noodles & Company CFO Carl Lukach told PYMNTS in an interview earlier this month.

“This did not happen overnight. We have been investing in digital for a while now, particularly building a very functional app and building a lot of frictionless ways for our guests to engage with us,” he said. So “whether they want to come in and pick up, whether they want delivery, whether they want to see us on a third-party aggregator, or whether they want to just do curbside … we’ve given our guests a true omnichannel approach.”

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NEW PYMNTS DATA: CRYPTOCURRENCY PAYMENTS STUDY – MAY 2021

About The Study: U.S. consumers see cryptocurrency as more than just a store of value: 46 million plan say they plan to use it to make payments for everything from financial services to groceries. In the Cryptocurrency Payments Report, PYMNTS surveys 8,008 cryptocurrency users and nonusers in the U.S. to examine the ways in which they plan to use crypto to make purchases, what crypto they plan to use — and how merchant acceptance can influence merchant choice and consumer spend.



NDLS – Noodles & Company CEO: Digital Shift Will Gain Momentum As Restaurant Industry Recovers

After an incredibly difficult 2020, many restaurants are beginning to have hope for the future. As more and more people get inoculated, with President Biden predicting that vaccines will be available to all adults before this summer, the new normal is beginning to come into view. Quick-service restaurant (QSR) chain Noodles & Company, for one, has expanded the following for its off-premises-friendly offerings. In the final quarter of 2020, despite suffering a year-over-year decrease in revenue, the company saw a remarkable 128 percent year-over-year growth in digital sales, with these making 62 percent of total sales, per the latest earnings release.

“Never discount the restaurant sector,” the chain’s CEO Dave Boennighausen told Karen Webster in a recent interview. “It’s the most innovative industry I can think of, and I think it’s actually shown great resilience. The fact that we’re roughly flat versus where we were pre-pandemic — I think ’21 will just be gradual improvement … [I’m] hoping for the new normal to show itself up probably around late Q3 and Q4.”

The new normal, however, will not be identical to the old normal. Boennighausen predicts that restaurants will see a weaker performance at lunch, a cost-conscious swing away from the “average check increases throughout the industry” seen during the pandemic. He also predicts that restaurants themselves will look different than they did in, say, February of 2020, with “fewer areas within a restaurant where you could see any kind of communal contact.” One of the more dramatic changes this will include, compared to pre-COVID dining, is that plexiglass partitions will remain a part of the restaurant experience “for the next year or two.”

The Lasting Appeal Of Digital

While the giant uptick in Noodles & Company’s digital sales might not be sustainable, Boennighausen nonetheless believes that digital channels will continue to make up a huge portion of total sales.

“We think digital is very, very sticky,” Boennighausen said. “The top 50 percent of restaurants that are above our average for dine-in are doing about 5 percent better than those that are in the bottom half … The story is that digital is sticky, that even as people started to go into the restaurants, we didn’t lose any of the digital sales.”

For one thing, Boennighausen maintains, consumers prefer the experience of digital transactions. “They’re simpler; they’re faster … A computer’s never going to get an order wrong.” Especially for a chain like Noodles & Company, which tends to attract a younger base, digital sales could well remain strong.

While the chain tries, through marketing and special promotions, to encourage customers to order through its own sales channels, it also believes it is important to preserve relationships with third-party aggregator users. Boennighausen reflected, “DoorDash, Uber Eats, and those folks, especially those two, they’ve done a very good job of getting brand loyalty into their own platforms. So it’s not without risk that people could just abandon the whole Noodles experience and go with somebody else.”

In fact, while some industry leaders predict that the aggregator model will be unsustainable in the long term, Boennighausen predicted, “There will eventually be some kind of equilibrium that’s a win-win. Right now, our intent is to work with those third-party providers, as well as with our consumers, to try to identify those wins.”

Next-Gen Kitchens

After working with industrial engineers in 2018 to identify inefficiencies in “500 different tasks that a team performed during the course of a day” and after implementing new, more time-effective technologies, Noodles & Company was able “to capture about seven hours per restaurant per day.” Additional food prep technologies being rolled out this year will bring “another couple hours of labor savings,” he said.

“Our team’s already in process of developing what’s the next kitchen of the future,” Boennighausen said. “Because we think there’s roughly a three-year cadence, where you’re evaluating what new technologies exist today that didn’t exist three years ago, what new equipment exists today that didn’t exist three years ago, [and] how has our operating model changed.”

To keep up with this three-year turnover period, the company is implementing ghost kitchens, both to try out the off-premises-only model in its own right and to use this technology to test new markets in a manner that poses “less risk than the full brick-and-mortar.” Boennighausen explained, “What the ghost kitchen allows you to do is really build brand awareness, start to create that infrastructure in a very low-cost way, in a very quick way …  this is a good opportunity for us to get some great learnings on, ‘How do we enter a new market?’”

Recalibrating To A Pre-COVID Mind Frame

Last year was, of course, in the most literal sense, an exceptional year. Routines were thrown into disarray, and consumers’ behavior was difficult to predict and incredibly variable across different markets and demographics. Accordingly, Boennighausen explained on the company’s recent earnings call, “While we will continue to report our 2021 comparable restaurant sales versus 2020, we will also be providing a comparison of average unit volumes relative to 2019, beginning with our Q1 earnings call.”

Three other restaurants have adopted the same system, Boennighausen told Webster, adding, “We just think it’s more informative and a more accurate way to look at things.” By measuring sales against the pre-COVID-normal, we will begin to see how the post-pandemic period compares to the restaurant industry as we knew it, rather than only the restaurant industry at its most volatile point.

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NEW PYMNTS DATA: HOLIDAY SHOPPING RETROSPECTIVE STUDY – FEBRUARY 2021

About The Study: The Holiday Shopping Retrospective Study: Merchant Insights For 2021 And Beyond, a PYMNTS and PayPal collaboration, examines consumers’ shopping practices and preferences during the 2020 holiday season and what these mean for merchants now and for holiday seasons to come. The report is based on a census-balanced survey of 2,070 U.S. consumers.