With the elevated inflation over the last several months, tipping and “tipflation” have been important topics for restaurants looking to attract and retain customers, while maintaining their margins. Studies conducted at the beginning of 2023 indicated that diners still felt that 15 per cent was a fair tip for servers, despite continued rising costs across the board. However, more recent data from a study conducted by the Angus Reid Institute, in partnership with Atlas, indicates that diners’ views towards tipping at restaurants may be shifting, as 39 per cent of consumers have lowered their tipping habits.
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Here are some of the highlights from the study that may influence how operators approach tipping practices in their restaurants:
- 37 per cent of operators feel that tipping should be based on the quality of the service provided, and 47 per cent agree that it should be a voluntary gesture by the guest.
- Tip transparency is important to operators, even as 47 per cent do not know how their tips are distributed and 91 per cent feel this should be clearly communicated to employees and customers.
- Does the holiday season affect consumer tipping practices? 50 per cent of operators report a net increase during the holiday season, with 29 per cent of restaurateurs reporting an increase of 10 per cent during that time period.
As consumers continue to watch their discretionary spending, tipping culture remains an important topic of discussion for operators and consumers. Over 70 per cent of consumers say that they have felt pressure to tip when faced with suggested tipping at the terminal, and 54 per cent said the preset suggestions make them angry.
While the restaurant industry’s road to recovery continues, raising menu prices and increased suggestive tipping may not be the answer to recovering costs and increasing revenues. As customers look for memorable dining experiences, increased value, and more transparency from their favourite restaurants, operators may need to turn their attention to those priorities and get a clear understanding of tipping practices to remain competitive and stand out in the marketplace.
