The Restaurant Industry We Know and Love is Dead… Now What?
Hopefully we’re all past the point of denying that the restaurant industry as we know it will ever return. The days of the packed neighborhood bars, our favorite local Thai restaurant, or the community fine dining spot are likely to be over. And not be harsh, because those are people’s businesses that were built with their blood, sweat, tears, and often times, their life savings. But there comes a time where every industry must change.
As we prepare to enter a completely new era of life, the establishments we’ve become accustomed to will change. It’s a necessity of evolution. Good things become old and fall away, while new things emerge to change an industry. The restaurant and hospitality industry is no different. Since the COVID pandemic, restaurants have had to make major adjustments to how they serve their guests. By limiting the seating to 50 -60% capacity, cutting staff, and relying heavily on takeout and delivery, we’re seeing the entire restaurant dining model shifting.
Its during times like these however, that there is great opportunity to shift an industry and make it better. The restaurant industry was due for a makeover or a drastic improvement anyway. Especially on the local level. While some big chain restaurants will continue to close their doors, file for bankruptcy, or drastically reconfigure their business models, it’s the mom and pop’s, diners, and local specialty cuisine spots that will suffer the most.
A recent Business Insider article says that, “As many as 85% of independent restaurants may be forced out of business by the end of the year.”
So like any good entrepreneur, when there are obstacles ahead, it’s not time to panic, it’s time to pivot. And that pivot is desperately needed for all the local restaurateurs that want to stay alive, or any new ones looking to start a successful establishment. But many restaurateurs may not know what changes need to be made. And with bills piling up, staff members not coming back to work, food cost going up, all while little to no sales are being made, changes have to be made quickly… or as we would say in the industry “on the fly.”
The best way for restaurants to pivot in the right direction is to pay attention to the macro trends and get answers from the local guests that like to dine out. Believe it or not, this pandemic continues to shape how, where, when, and what people want to eat… and its all changing. A successful restaurateur will need to accommodate these changes quickly, if they want the best chance to survive.
Say goodbye to:
Extensive Menus. The days of the Cheesecake Factory style, 150 item menu, is now a thing of the past. With the cost of shipping going up, food costs increasing, and sales declining, restaurants will have to take a serious look at their product mix. In order to keep food cost low, some items will not be worth keeping on shelves. During the time of COVID restaurants got a chance to see what it was like running a limited menu. So certain items that were not popular, will need to be removed just to keep food costs as low as possible.
Max Customization. The create-your-own, QSR model may not be around as long as we think… at least in the way we think about them now. Over the past decade, the trend in restaurants have been to give customers more options. More ingredients, more choices, more toppings, etc. But having too many ingredients can require more labor to prep those ingredients, and also potentially cause higher waste when products aren’t used. Higher waste leads to higher food cost, and controlling food cost, again, is one of the only variables a restaurant can control. So don’t be surprised if menus become more consolidated over the next decade, it may be a needed pivot.
Large Shared Plates. With buffets being the first group of restaurants to completely be wiped out by the COVID pandemic, restaurants that also encourage large, shared family plates, and entrees “for the table,” will become less in demand. Since the pandemic, customers will have a heightened sense of awareness when it comes to the spreading of germs and bacteria. And since eating behind someone and sharing food can be one of the quickest ways to spread germs, over time, this type of shared cuisine will be discouraged (at least here in the United States). The more people are conscious and fearful of that, the less likely they’ll be to seek that style of dining.
While these changes may completely disrupt the model of some restaurants, always remember that in every adversity, there is an equal or greater seed of opportunity. So during this time restaurateurs should be listening to their guests, and focusing in on these opportunities. This is the best way to position themselves ahead of the curve within the industry.
Stay where your guests are. Any guest that still comes in your store, take time to thank them, and ask them what could make their experience better. Many of the trends on the horizon are happening right before our eyes on social media. People are telling brands more than ever, how they want to be served. From curbside, to delivery, to contact less pick up, the industry is changing fast to stay afloat.
If we could look into the future, these are a few of the areas the industry will continue to pivot towards.
Say hello to:
Plated Meals. During the pandemic, home cooking numbers skyrocketed. People that would normally eat out for convenience, because their work schedule was hectic or they could never make time to go grocery shopping, found themselves in a position where it was actually more convenient for them to cook at home. Many of those same people have now found a new joy in cooking for their family.
But inevitably, people need a day (or three) off from slaving away in the kitchen. The difference will be now when dining out, or ordering takeout, people will be looking for those same meals they can get at home, just cooked by someone else. The days of pizza, burgers, and frozen fried food for take out will go away (primarily because people now know how easy that stuff is to make, and how bad it is for you), and move towards plated meals and dinners. Pop up shops from your favorite local chef will become increasingly more popular. Where a person can get a freshly cooked, well prepared, balanced meal, on the few days they don’t feel like cooking at home. No longer will you have to sacrifice taste for price.
Branded Niche Restaurants. As I stated before, restaurateurs that try to cater to everyone by having large menus, will eventually have to change their model to compete. They’ll be replaced by smaller niche restaurants that only serve one or two items, but with multiple variations of that item. Like having a restaurant that only serves mac and cheese. But everyday there’s a “chef’s special, mac and cheese of the day.” This style of restaurant will become more popular because it keeps food cost low, food quality high, and gives the owner a specific targeted demographic to keep orders flowing. So the next time you have a craving for the food, you’ll know exactly where to get it.
Increased Delivery. Its almost a forgone conclusion that the delivery space within the industry will grow significantly over the next decade. Companies like Doorrdash, UberEats, and GrubHub are just the preview of what’s to come. Many restaurants will opt for their own delivery service to avoid paying the fees, but there will definitely be other delivery services that emerge to give more options, better packaging, faster delivery time, and overall improvements. This factor could completely change the dine-in restaurant model entirely. If it becomes more convenient for people to eat food in the comfort of their homes, as if they were dining in a restaurant, why would people choose to dine out?
Local Fresh Menu Options. Again, the COVID pandemic will continue to change the way we think about our food and where it comes from. Many customers will become increasingly more interested in what they’re consuming. With the vegan and meatless movement, the industry was already seeing an uptick in restaurants advertising more transparency in their menu. Now with more people exposed to growing their own crops in their backyard, customers will have a greater appreciation for freshness. Also restaurants continuing to support their local farms, and making the farm to table movement even stronger. The restaurants that will have the most success in the future will utilize locally grown ingredients to help their community feel better about the food they eat.
So the restaurant industry as we know it, will never be the same. New industry trends coupled with new customer behavior will cause many restaurants to ditch old models, and explore new possibilities to keep the industry alive.
One thing that will always remain the same in hospitality, is the guest is always right. No matter what ideas a restaurateur thinks will work, the best way to be successful is to listen to your customer. Let them tell you what they want, and how they want it. Follow their lead, and create the best dining experience for them. That’s the guaranteed recipe for success.
