I’d like to share a few articles I read this week that address the changing climate of the restaurant industry and changes in the demographics and habits of diners. Each of these pieces touched on a common theme – that restaurants are going to have work harder to be relevant among a changing -and less loyal- demographic; one that is causing the market to become more competitive and more driven than ever by exceptional customer service.
First, a report released this week from the NPD Group ReCount showed the “total number of restaurant locations in the U.S. shrunk during the past year as smaller chains and independents in particular had difficulty weather the economic storm.”
And, coincidentally, a report from Technomic showed that consumers are entertaining at home more often than a year ago. That trend is expected to increase throughout the year.
The Technomic study is a good segue into a Wall Street Journal article that identifies a trend of restaurants opening fewer locations and instead trying harder to improve service. Mystery shopper programs and online surveys abound.
And the last article, from the Orlando Sentinel, shows how dining habits have changed. Older consumers, who represent a large portion of the casual-dining market, have reined in spending as their retirement savings have taken a hit during the recession. Meanwhile, the next generation of diners is less loyal to casual dining and often feel that traditional sit-down restaurants take too long. Moreover, grocery store chains are honing in on restaurants’ territory by offering more pre-packaged and ready-to-eat meals.
It’s easy to see the downside, but what opportunities do these trends present for restaurateurs?
First, as noted in the MediaPost article, it offers an opportunity for restaurants -especially the independent and smaller chains that are struggling the most- to place a greater emphasis on offering box lunches and party platters, complete with off-site preparation.
Second, these trends should tell restaurateurs that there are too many establishments that are almost exactly the same. Operators should be in a mode of constantly improving and reinventing themselves and keeping the concept fresh.
And last, restaurants should place an even greater emphasis on customer service that is second-to-none. I don’t just mean greeting the diners with a “Hi, my name is Kristy and I’ll be your server,” with a side-order of deadpan stare.
What I mean is to provide a customer experience that isn’t artificial and suffocating, but unique and special enough that people will tell their friends about it.
Now more than ever, your success depends on a unique and memorable experience, and depends on taking advantage of new trends and dining styles. Because in THIS economy, if you build it, sometimes they still won’t come.