Viewpoint

No Tax on Tips???

by Bob Gershberg, CEO & Managing Partner, Wray Executive Search

Tipping, oh such an American cultural norm. We love to tip for good service, and for waitstaff, hair stylists, delivery drivers, taxi and ride share drivers it is obligatory. For limited or self-service applications, perhaps not so much. Being intimidated by a touch screen suggesting a 20%, 25% or 30% gratuity is a discussion we can leave for another day. As a restaurant industry veteran for more years than I’d like to admit, I’ve long been a proponent of any policy that helps our hard-working staff. But is no tax on tips good policy?

In 2023, there were roughly 4 million U.S. workers in tipped occupations, representing 2.5% of all employment, according to estimates from The Budget Lab at Yale University.

According to the Fair Labor and Standards Act, a tipped worker is defined as one who “customarily and regularly” receives $30 or more in tips monthly, a wide definition that encompasses millions of Americans. Tipped workers tend to be younger — the median age is 31, compared to 41 for the median non-tipped worker — and earn lower wages, the Budget Lab found.

Executive Chat

Featuring Betsy Hamm, CEO of Duck Donuts

by Rebecca Patt, SVP & Partner, Wray Executive Search

Betsy Hamm, CEO of Duck Donuts, shares her insights on the brand’s rapid growth, the exciting digital initiatives transforming the customer experience, and the innovative products that keep fans coming back for more.

What new initiatives and projects are you most excited about at Duck Donuts?



The biggest initiative I'm excited about is enhancing our digital customer journey. We're working on several projects to improve the digital experience for our customers, making it easier and more convenient to order donuts. We're about to launch a new website and online ordering platform. We also recently signed on to use a Customer Data Platform (CDP), which will allow us to be more targeted with our messaging and understand customer behaviors better. I believe these digital initiatives will have the greatest impact on our sales moving forward.

Restaurants: Consumers Slide Back and Forth

by John Gordon, Principal and Founder, Pacific Management Consulting Group

I remember in early 2020, I wrote a column for Executive Connection that had the theme “not much was new from the January 2000 ICR Conference”, which is a good beginning of year proxy. Wow, how things have changed now! We are still being rocked by the effects of the Pandemic in many ways.

We really have a price perception. One aspect is that some of today’s consumers cannot understand why prices are so much higher now than in 2019. The fact that we had to increase prices is a part of the business, but I see now we have failed to educate our guests. There is some finger pointing going on now in the franchise sector whether franchisees are responsible for over pricing. NO-I do not buy that--the franchisor is the steward of the brand, sets the marketing (mostly) and certainly sets the standards and procedures. If there is pressure for new units and remodels in a down market, of course there will be pressure on price. Collectively, we all failed to communicate with our guests.

"The world hates change, yet it is the only thing that has brought progress"

— Charles Kettering

Attract. Maximize. Retain: How to use AI to get Customers in the Door, Maximize Their Visit, and Keep Them Engaged After They Leave

by Ray Kelley, SVP & Partner, Wray Executive Search

Here are some ideas to utilize AI’s power to enhance every stage of a customer’s journey. From attracting customers, to maximizing revenue per visit, to maintaining relationships after a meal. AI provides data-driven solutions that can supercharge your restaurant’s growth.

Attracting Customers: Using AI to Drive Traffic

In a crowded market, getting customers through the door is the first and often the toughest challenge. AI enables restaurants to use customer data in ways that were once unimaginable, offering new strategies to attract diners.



Hyper-Personalized Marketing: AI analyzes vast amounts of customer data, including dining history, preferences, and behavior patterns, to create tailored marketing campaigns. These AI-driven insights can help deliver hyper-personalized offers and ads through email, social media, or mobile apps. For example, AI might identify that a customer frequently dines out on Friday nights and sends them an exclusive discount a few hours before they usually make reservations.

Check out the August 2024 Restaurant Industry Summary from Compass Restaurant Research & Consulting

Read the latest on restaurant industry sales from the National Restaurant Association

Restaurant sales were relatively flat in recent months

The recent slowdown in restaurant sales growth was not due to a lack of interest among consumers.

Consumer spending in restaurants plateaued in recent months, which mirrored the gradual slowdown in the overall economy.

Eating and drinking places* registered total sales of $94.5 billion on a seasonally adjusted basis in August, according to preliminary data from the U.S. Census Bureau. That was essentially unchanged from the volumes posted in each of the previous four months.

August’s total sales volume of $94.5 billion stood just 2.7% above August 2023 levels. That represented the smallest 12-month increase during the pandemic recovery period, and was only slightly above the 2.0% gain in non-restaurant retail sales.