Data Intelligence

How Restaurants Are Using Data

Businesses increasingly rely on data to help improve efficiency, boost productivity, streamline operations, and stay competitive. Many are leveraging predictive analytics to inform many, if not all, of their decisions.

Restaurants also use data to improve the customer experience and revise menus. Today, nearly every aspect of the industry can be improved by gathering and analyzing the massive data it creates.

The question is, are restaurants taking advantage of this powerful ally? With the digital onslaught, restaurants are producing more data than ever before. Is it being transformed into useful and actionable insights?

A recent study in November 2023 by Nation’s Restaurant News Intelligence took an extensive look at the metrics operators are paying attention to and how they’re using them. Let’s explore a few of their many key findings and what they mean to the restaurant industry. 

More Restaurants Are Using Data Than Ever Before

Compared to Nation’s Restaurant News’ last survey in January 2023, in which 30% said they were confident in their data optimization and usage, a whopping 55% laid claim to this ability in their most recent study. It’s clear more restaurants are tackling the sometimes-challenging data arena. Fast-casual and chain restaurants were the most confident in their data optimization, while casual dining and independents came in the least data savvy.

Almost Half of all Operators Use Data for Menu Optimization

The survey found that almost half of the respondents used data to optimize their menu to increase profits, from changing items to prices. Are you leaving money on the table? 

F&B Insights helps restaurants and bars identify pricing opportunities to maximize profits. You’ll know your competitors’ menu items and pricing by leveraging nationwide and local market intelligence.

Digital Operations and Quality-Driven Data

Another finding was the importance of quality data. Those who optimized data reported that only 3 percent of their data sets were poor or unusable, compared to 31 percent of all respondents.

Digitizing is, of course, the key. Digital orders from websites and apps, tableside tablet ordering, QR codes, loyalty programs, and marketing strategies that engage customers all offer actionable data. Data leaders expect that, by the end of 2025, at least 20% of their sales will come from loyalty members.

Gathering and Implementing Data

The study also found that those who took advantage of data gathered it from numerous sources and implemented metrics that included spending habits, personal preferences, and dining frequency.

Interestingly, the top spot for gathering and organizing data came from online reviews and ratings, where they measured customer satisfaction. Two other top contenders were collecting data from social media mentions and competitors’ menu prices. 

The Biggest Challenge to Implementing Data

Repeatedly, it was noted that siloed data needed to be integrated, from POS systems to loyalty programs. For those serious about implementing data, a customer data platform that integrates with your POS, loyalty program, and other areas you capture data may be in order.

Interestingly, the survey revealed the biggest challenge for restaurants was the lack of tech-savvy staff. Despite this knowledge, only 1 in 10 are looking to invest in people with this skill set. The top four technology categories they’re the most likely to invest in are social and online reputation management tools, inventory management systems, POS systems, and digital loyalty programs or CRM systems.

The bottom line: digital fluency will, one day soon, no longer be an option, but a necessity.

Benefits of Digital Fluency

Two of the many benefits of digital fluency include the following: 

Hyper-personalization: Going from fragmented to integrated data enables restaurants to provide a personalized experience, from knowing a guest’s preferred table to their favorite menu items and having this information available to servers. 

Using Data for Expansion: Knowing your VIP customers, those who drive over 50% of sales, and then using this information to expand your brand. At EMERGING Concepts, we evaluate real estate opportunities across the country using data analytics, including VIP customer trends. As real estate experts, we negotiate with developers and landlords on our clients’ behalf.

When asked how they used the data they’d analyzed, the top two answers at over 45% were changing menu prices and items. Coming in a distant third and fourth, at about 25%, were improving staff training and adjusting their loyalty program’s incentives or rewards. 

The top KPIs monitored to determine the success of their data strategies were food cost percentage, total revenue, customer satisfaction ratings, and labor cost percentage.

For restaurants looking to embrace data, a closer look at this study may be warranted. It offered a wealth of information, going deep into recommendations by some of the top players in the field. 


How are restaurants using data?

The insights provided by data are being used in nearly every aspect of the restaurant industry. A few of the many ways they’re implementing data include personalizing the guest experience, reducing food waste, revising menus, developing expansion plans, and customer segmentation for targeted messaging.

How can data improve my business?

Data has long been used to improve operations, reduce costs, and increase productivity. Predictive analytics forecasts customers’ behaviors and market trends, enabling you to stay ahead of the competition. Today, data can inform and support almost every business decision.

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