Q&A with JAMCO Interests’ Founder: 5 Issues Facing Today’s Fast Casual Restaurant Industry

5 Issues Facing Today’s Fast Casual Restaurant Industry

Many things in the restaurant industry have changed since the pandemic’s onset. For businesses that survived the past two years, considerable hurdles continue to test even the savviest management teams.  

We spoke to industry veteran, John Antioco, who is founder, investor, and executive chair of JAMCO Interests, LLC, to get his thoughts on what he sees as the biggest challenges facing the industry and what restaurants need to do to thrive.

Q. How important are drive-through lanes to fast-casual and quick-service restaurants in today’s highly competitive marketplace?

 John: Single-purpose drive-through lanes are obsolete! The growing consumer demand for convenience has been relentless. This trend has been turbo-charged by the pandemic. But now, taking single orders one at a time is too slow for today’s needs, and it simply doesn’t work for casual dining. Increasingly, it’s about ordering via mobile apps: double drive-thrus, with pickup-only lanes, and hybrid approaches that incorporate curbside will address the demand for speedy service. The industry must innovate around prepared meals that are fast and consumer-friendly, no matter what sector of the business we do business in. Prepared or semi-prepared meals for off-premise consumption anywhere will be the future growth driver. And we’d better find a way to up the experiential aspects of our on-premise dining because that’s the reason consumers chose that option.

Q. The entire U.S. economy is facing hiring and job retention challenges. How is this great resignation, as some are glibly calling it, impacting the fast-casual and quick-service restaurant industry, and what can businesses do to address this problem?

 John: I love this problem! We are in the middle of a perfect storm of pent-up consumer demand and increased access to discretionary cash, which is leading to robust business in the restaurant industry.

That’s normally a good thing, however, the shortage of skilled and unskilled workers is making it difficult to fully staff stores, or to hold on to existing personnel. The biggest factor may be a fundamental mindset shift in today’s workforce, which has workers exploring other options.

An unrelenting focus on your people and making them the priority is key to retaining staff who in turn take care of your customers. There are several shining examples in the restaurant space where ownership invested money in people; those businesses fare better. It’s a simple formula: the better you treat your teams, the better they will treat your customers and the more those customers will be inclined to return again—period.  

Q. How do you see innovation shaping the future of the restaurant industry?

John: I was at a recent restaurant innovations conference and determined that there really are no new ideas, just better ways to bring them to life.

Innovation in our industry is often driven by four factors: 1) creative entrepreneurialism, 2) technology advances, 3) societal change, and 4) economic necessity. The seeds of innovation often start long before we realize it.

It may sound overly simple but consider my experience as a milkman’s son and helper. We were doing home delivery long before it became an innovation for the grocery industry. I also worked as a part-time packer for a home frozen food delivery company. Simple businesses like these were the precursor to colossal online home delivery businesses today. What’s old can be new again, with a contemporary twist and economic viability.

The key to innovation in any business starts by focusing on the customer's need and then identifying a better way to meet that need. We must determine what the limitations of the status quo are and seek alternative solutions to find new approaches. Always examine the risk of doing nothing versus what future vision can look like and what it can bring. Being curious and taking risks is key to facilitating innovation.

Innovation can be incremental, as well. It’s not as sexy, but there’s a tried-and-true management method where you improve it, test it, study it, learn from the tests, and then implement the improvements!

Q. What are the management and leadership skills you view as vital in meeting the demands restaurants face today?

John: Marketing! But not just in the conventional sense. One of the most important skills successful managers need is an ongoing fascination with what motivates consumers to buy. Leadership teams want to accomplish a mission. So, management needs to empower them to achieve measurable, incremental successes.

When I hire leaders, my top candidates have a track record of success, some relevant experience, a strong desire for the job, and a passion for doing the right thing, even if that means fighting for it. Some of the most underdeveloped skills of leaders are communication, creativity, and curiosity. It’s imperative for good leaders to nurture these skills within their teams.   

Q. There are widespread supply chain issues plaguing nearly every industry. Do you see this is as a major issue of concern for the restaurant industry?

John: Obviously, when we can’t keep our stores fully stocked, that’s a problem. My advice to businesses facing this challenge—just keep at it and adapt. Most restaurants that survived the shutdown are doing much better overall today because demand is up. Supply chain issues are temporary problems. I’d much rather face this issue than the alternative of having lots of supply and no demand. Communicate with your employees and customers openly and honestly about the challenges and let them know you’re continuing to address them. Finally, everyone needs to think about what’s on the horizon in 2022—specifically, inflation’s impact on discretionary spending for a large segment of our customer base and the likely competitive challenges that result which may include widespread price discounting.