[00:00:00] Check it out. Listen to me very carefully. While most restaurant owners are out there still arguing about whether AI is a fad or whether it's a threat, the smart ones, the profitable ones, are already using it to dominate their markets. It's 2025 and artificial intelligence isn't coming to the restaurant industry. It's already here. And if you're not using it, you're not just behind, you're becoming irrelevant. Today, I'm going to show you exactly how successful restaurants are leveraging AI to cut costs, boost profits, and leave their competition in the dust. These aren't theories, these aren't maybes. These are real strategies being used right now by restaurants that are making real money. All of that on today's episode of Restaurant Strategy. Don't go anywhere.
[00:00:46] There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:17] Hey everyone, thanks for tuning in. My name is Chip Close and this is the Restaurant Strategy Podcast. Two episodes every single week meant to help you level up, build a more profitable and sustainable business.
[00:01:28] I also work with owners and operators from all over the world to help them dial in a more profitable operation. If you want to make more money and spend less time in your restaurant, then it's worth a 30 minute conversation. You set up that call by going to restaurantstrategypodcast.com schedule grab time on the calendar. We'll get to ask some questions about your restaurant. You'll get to ask some questions about the program we run and and let's see if we're a good fit again. Restaurantstrategypodcast.com schedule as always, that link is in the show notes.
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[00:02:55] Now, reality check. Here's what's happening right now.
[00:02:59] 38% of restaurants are quote unquote, extremely likely to implement AI benchmarking tools. 41% are already planning to invest in AI sales forecasting and scheduling. But here's the thing. While everyone's planning, the winners are already doing the restaurants making money, I mean real money, in 2025 aren't waiting for permission. They're not wondering whether AI will work. They know it work because they're using it every single day to make more money with less effort. And I'm going to show you how on today's episode. 10 different tools, 10 ways that smart restaurants are crushing it in 2025 using AI. Number one, predictive inventory management. Forget your clipboard. Forget your gut feelings about how much chicken to order. Predictive AI analyzes historical data and patterns to forecast future demand, optimize inventory levels and reduce stockouts or overstock sit situations. No more 86 is no more spoilage on those shelves.
[00:04:02] Smart restaurants are using AI to predict exactly what they'll sell, when they'll sell it and how much then to order. By analyzing historical sales data and patterns in the most popular items throughout the day, AI can help predict peak traffic times and expected customer orders. The result, food waste drops by 15% plus food costs become more predictable. You stop throwing away money in the garbage. I worked with a client once who cut their food food waste from 18% down to 6 using just AI inventory management. You know which one, that's a 12 point improvement in food cost percentage. It's no joke. It's pure profit money that drops to the bottom line.
[00:04:44] Number two, the other way. Another way that smart restaurateurs are using AI in their restaurants. Dynamic labor scheduling. Your biggest expense after your food, or for many of you, your biggest expense period is labor. And most restaurants are terrible at managing it. We spend a lot of time talking about it on this show. Well, AI scheduling systems analyze sales patterns, weather data, local events, historical traffic to predict exactly how much staff you need and when you need them. So no more overstaffing on slow nights. No more being slammed with half the crew. You need 41% of restaurants, remember 41% plan to invest in AI sales forecasting and scheduling because they understand this isn't just about convenience, it's about profitability.
[00:05:33] So you've got labor management software, scheduling software. If it doesn't have a predictive AI component to it, you are already falling behind. The very best tools have that I have a relationship built with time Forge. It's some. It's a company we talk about a great deal on this show. One of the reasons is because they have the very best AI integration that I've ever seen.
[00:05:55] When you can predict demand accurately, you can obviously staff more appropriately. And when you staff more appropriately, your labor costs drop immediately.
[00:06:05] The third way that restaurants are using AI to improve profits, Personalized customer marketing. So mass marketing is dead. We've also talked a lot about this, right? That spray and pray advertising has become a waste of money. We can get much more specific, much more targeted surgical with our marketing. Starbucks Deep Brew is an AI system that personalizes marketing campaigns, campaigns for each and every customer, evaluating factors like past purchases. Restaurants can use AI like that. You don't have to be Starbucks, but you can use that to analyze customer data, preferences and behaviors to unlock highly personalized experiences for guests. Smart restaurants are using AI to send the right offer to the right customer at the right time, right? So your regular who orders pasta gets a pasta special promotion. Your customer who hasn't been in for two months gets a comeback offer. It's not just good service, it's a profitable way of marketing your restaurant. Personalized marketing converts three to five times better than generic campaigns. And I know you know this because hotels have gotten really good at this. Airlines have gotten really good at this. The best e commerce brands have gotten really good at this. And restaurants are just slow to keep up. So I use Starbucks as an example because they are already living in the future. But it's possible for you too. And there is software out there that can help you with it. You just have to find the one that's right for you that is approachable, that is manageable, that is affordable. Finally, number four, right? We're going through 10 ways. Number four, automated order taking.
[00:07:39] AI technology can be used to automate a lot of simple tasks like taking reservations or taking orders and putting them into the POS.
[00:07:47] AI chatbots and phone systems are taking orders right now 24 7. And those people, those robots are never getting tired, never making mistakes, never calling in sick. The future is here. This is what smart restaurants profitable restaurants are using. AI is powering self ordering kiosks and the chatbots streamlining the ordering process and reducing human error. AI chat bots are also taking orders and drive thrus. You may not even realize it, but they are. And they do that so that your staff can focus on what actually matters, creating great experiences for customers.
[00:08:23] Meanwhile, AI handles the routine stuff and doesn't require that human touch. So we save the human stuff for the actual humans.
[00:08:32] Number five, the fifth way that smart restaurants are using AI in the year 2025 real time menu optimization. We're going to hear a lot about this in the future.
[00:08:43] I believe your menu shouldn't be stat, shouldn't be static.
[00:08:48] Restaurants that are using AI to analyze customer feedback and reviews as well as social media trends to identify pop popular dishes and flavors that makes a difference.
[00:08:59] AI can track what's selling, what's not selling, what's trending on social media and other news stations. They can look at what competitors are doing. AI can tell you which dishes to promote, which dishes to modify and wish dishes to eliminate altogether. So I have another client who uses AI menu analysis to identify their three lowest performing items. They do this every single quarter and they replaced those dishes with dishes that AI recommends based on trending ingredients or customer preferences. And sales increased 12% in the very first month they did that. I didn't even believe it. I was slow to adopt this and that's why I'm talking about this because we can't afford to be slow to adopt it. Those are the first five ways that I'm watching smart restaurants include incorporate, implement AI to make for more profitable restaurants. The last five after a word from another one of our sponsors.
[00:09:53] Thousands of restaurants across the country use Kickfin to send instant cashless tip payouts directly to their employees bank accounts the second their shift ends. It's a really simple solution to what's become a really big problem because let's face it, paying out cash tips to your workers day after day, shift after shift, it's kind of a nightmare. Tedious tip distribution takes your managers away from work that actually matters. It's sometimes hard to track payments, which leads to accounting and compliance headaches.
[00:10:21] Plus, cash tip outs create the perfect opportunity for theft. And there's never been, there's never enough cash on hand to pay out those tips. So what? What happens? Your managers are constantly having to make bank runs. Bottom line, there's never been a secure, efficient way to tip out. Until now. Meet Kickfin. Kickfin is an easy to use software that sends real time cashless tip payouts straight to your employees bank accounts 24 7, 365 tipping out with Kickfin gives managers and operators hours back in their day. It makes reporting a breeze and protects your business from mistakes and theft. And guess what? Employees love it. So it becomes a really powerful recruiting tool. Best of all, restaurants can Have Kickfin up and running overnight. Employees can enroll in seconds. No hardware, no contracts, and no setup fees. Get in touch today for a personalized demo and see how restaurants and bars across the country are tipping out with Kickfin. Visit kickfin.comdemo and yes, that link is in the show notes.
[00:11:21] Okay, so today we're talking all about AI. This is long overdue. I am late to the party and I'm guessing that many of you have not even gotten your invitation to the party. This is me inviting you to the party. We're talking about 10 ways that smart restaurants are utilizing AI in the year 2025. It's not coming. It is here. Number six, fraud detection and loss prevention.
[00:11:42] Employee theft. We don't like to talk about it, but employee theft and fraud cost restaurants billions every single year. Most owners never even know it's happening. Restaurants are vulnerable to fraudulent activities, but did you know that AI can detect unusual patterns in transactions, in inventory discrepancies and suspicious employee behavior.
[00:12:04] AI watches every transaction, every inventory movement, every clock in every clock out. It spots patterns that many humans miss, even you. It can flag anomalies in real time. And when you know exactly what's happening in your restaurant at all times, theft becomes nearly impossible.
[00:12:24] Number seven, the seventh way that smart restaurants are utilizing AI demand forecasting for pricing. And man, this is another big one we're going to spend a lot of time talking about over the next five years.
[00:12:36] Pricing isn't guesswork anymore. It is data science.
[00:12:40] Brands like Chipotle, Starbucks Domino's are leaning on AI to do things like predict traffic and set prices. AI can analyze demand patterns, competitor pricing, weather events, and dozens of other factors to recommend optimal pricing strategies.
[00:12:56] AI knows when to raise prices. They know when to run promotions. They know when to push certain items and when not to push those items. Dynamic pricing isn't just for airlines and hotels anymore. Smart restaurants are using it will continue to use it to maximize revenue every single day, part on every single day of the month.
[00:13:16] Number eight, the eighth way that smart restaurants are using AI kitchen automation and prep optimization.
[00:13:22] AI can help with tasks like baking pizzas before they're ordered, optimize kitchen workflows and managing prep schedules. AI will tell your kitchen exactly what to prep, when to prep it, and how much to make based on predicted demand. It optimizes cooking sequences to reduce wait times and improve quality.
[00:13:41] Some restaurants are using AI powered equipment that cooks food with perfect consistency every single time. No more overcooked steaks, no more undercooked chicken, just perfect execution. On every single order. Wouldn't that be nice? The future is here. Number nine, competitive analysis and benchmarking. Man, I spent a lot of time talking about this. And the tools are getting better and better. AI benchmarking tools can compare food and labor costs to other similar establishments in your market or similar levels of dining.
[00:14:13] So remember, you're not operating in a vacuum. AI can constantly monitor your competition. They can track their prices, promotions, the reviews, their performance.
[00:14:23] And it tells you where you stand in your market, what you're doing better and what you need to improve upon. It identifies opportunities you're missing and threats that you need to address.
[00:14:33] And we know that knowledge is power. AI can give you more knowledge, meaning, more power. More knowledge about your market makes you more powerful in your market, more powerful than maybe you've ever been able to be before.
[00:14:47] And finally, number 10. And this can't be overstated, Customer service enhancement. So these technologies, these AI tools, not only improve efficiency, they do do that, but they also allow staff to focus on all the other aspects of customer service that do require a human touch. We talked about this a minute ago, right?
[00:15:06] AI doesn't replace human connection, and it can't, right? But what it can do is it can enhance it.
[00:15:13] So AI handles the routine tasks, thereby freeing your staff to do the things that humans do best. Create genuine connections with your customers. AI can manage your reservations. It can process orders. It can answer basic questions that people have when they call on the phone. Therefore, your team can focus on the hospitality, the problem solving, the creating memorable experiences. The end result?
[00:15:39] Better service, happier customers, higher tips, I would bet, and better reviews.
[00:15:45] The bottom line to all this, right? The 10 Ways that Smart operators, smart owners utilizing restaurants. The bottom line is that food costs are rising, wages are rising. So investing in AI could be the key to balancing all of your expenses. While, yes, boosting profitability.
[00:16:02] Here's the truth. The reality is AI is no longer optional. It's not a luxury for big chains. It's a necessity for any restaurant that wants to survive, let alone thrive. The restaurants using AI are reducing costs. They are increasing efficiency. They're improving customer experiences and boosting profits. The restaurants not using AI are falling behind every single day. And guess what? You have a choice. You can embrace the future and use AI to build a more profitable restaurant, or you can stick with the old ways and watch your competition eat your lunch.
[00:16:37] You get to choose. And you have to choose, because while you're deciding, your smartest competitors are already implementing these technologies. We've talked a lot about this. The fact that you show up to this show every week or every other week and you were dedicated to leveling up says a lot about you as an owner and an operator. It doesn't stop here. This is where you get more ideas. AI is what is here. It is the thing I heard somebody say the other day. It is.
[00:17:03] It is our generation's electricity. The way that electricity changed the world 100, 150 years ago. AI is going to change our world in the same way.
[00:17:13] I don't think we can see all the ways it's going to change, but we know the ways that we can use it right now. And you get to choose if you want help understanding which AI tools make sense for your restaurant. If you're ready to stop guessing, start using data to make decisions, then let's talk. This is something we talk about again. RestaurantStrategyPodcast.com Schedule I run something called the P3 Mastermind. This is going to be a big part of where we go over the Next, let's say 18 months. Mark my words, the restaurants that embrace AI in 2025 will be the ones still standing in 2030. Do not get left behind. If you want to have a chat about this again. RestaurantStrategyPodcast.com schedule that's all for today. Thanks for tuning in to Restaurant Strategy. Appreciate you being here. I will see you next time.
