Toast Seizes on Labor Challenges at Independent Restaurants to Drive Adoption

toast, restech, restaurants, SMBs

Restaurant technology platform Toast said the disproportionate challenges affecting independent restaurant operators provided a strong business opportunity to offer labor and productivity services to small- to medium-sized businesses (SMBs).

The comments came as the company, which has a presence in around 74,000 restaurant locations, reported its Q3 earnings results Thursday (Nov. 10), noting significant growth among independents.

“Over the past year, the percentage of total SMB restaurant locations in markets where we have over 20% Penetration has increased by more than five times,” Toast CEO Chris Comparato told analysts on a call. “When you combine the significant untapped SMB opportunity with our nascent share in the enterprise and international segments, we still have a long runway of growth ahead.”

Indeed, many independents are looking for solutions to their labor challenges. Research from PYMNTS’ March study, “Main Street Economic Health Survey: Navigating Economic Uncertainty,” created in collaboration with Melio, found that 41% of SMBs, including restaurants, cited difficulties hiring employees as a relevant obstacle to success in 2022, and 14% listed this concern as their single greatest challenge. Additionally, 22% reported having implemented technology that helps employees be more productive.

Get the study: Main Street Economic Health Survey

As such, the tech provider has been expanding its suite of solutions in recent months. For instance, in October, the company launched Toast Invoicing, which enables restaurants to create invoices and collect payments for all types of orders and events within a single system. Toast also debuted its price tracking tools to help eateries make smarter inventory decisions and new menu and kitchen display system (KDS) features, among others.

The price-tracking tools especially can be especially appealing to restaurants right now, amid rapid inflation and difficult-to-predict price fluctuations.

“We’re trying to help them take the guesswork out of, ‘What are the menu items that I should be featuring more prominently or continuing to keep on the menu, and where am I running up against challenges on some of my key ingredients?’” Kelly Sennatt Esten, Toast’s SVP and general manager of enterprise, told PYMNTS in an October interview. “Tracking and sharing price changes over time helps them stay ahead of these changes.”

Additionally, the company is looking to have it both ways, simultaneously targeting quick-service restaurant (QSR) chains. Back in April, the tech provider launched a solution specifically for the sector.

“In Q3, QSR is represented nearly half of our bookings its highest level in recent years,” Comparato said. “One important benefit of our vertical focus on the restaurant industry is the ability to leverage the Toast platform to develop offerings tailored to the needs of specific restaurant types, enabling us to deepen our penetration across the restaurant segments.”