As the last few years have seen many brands battling declining sales, I’ve observed that the casual-dining segment is in a cycle of being like the stepchild of the industry.
Some industry veterans have gotten skeptical, bearish, and even cynical about the casual-dining segment. Fast-casual has become the darling of restaurant insiders because of its reputation for value, convenience, and ROI.
Casual Dining’s role in the Restaurant Industry
I’ve noticed that something is missing from the dialogue, and that’s acknowledging the amazing benefits of casual-dining. I decided to make a list of 15 reasons why I think casual dining is a relevant and growing business opportunity that will never go out of style.
I’ve come to these realizations over time through my engagement in the restaurant industry as an executive recruiter, but they are primarily from my experience eating out about three times a week, plus watching the restaurant habits of those closest to me:
1. Hooray for Wait Staff! Sometimes, I’m too tired or lazy to cook at home, or I just plain don’t feel like cooking or cleaning afterwards. I want to leave the house, sit down, be waited on, and not lift a finger. Casual-dining restaurants provide this hospitality, and I proclaim it nothing less than a sacred, beautiful thing. While some fast-casuals and QSRs offer outstanding service, and I appreciate their convenience, the majority of the time when I go out to eat, I just want to relax. This is why, deep in my soul, I am grateful for wait staff and their hard work.
2. The food that I’ll never make myself. I don’t grill out year-round nor would I ever attempt to cook most of the things I enjoy ordering at a casual-dining restaurant. When I look back on the meals I’ve had at various casual-dining restaurants in the last month — barbecue ribs, grilled fish tacos, sushi — I know I am highly unlikely to attempt to cook any of these tasty concoctions myself, even though I made most of my meals at home.
3. Have you ever had a margarita at Chipotle? Life’s too short, with too many other cruelties, for bad margaritas. If I have a choice, when cocktail hour or beer-thirty rolls around, I’d rather not imbibe my adult beverages from a fast-casual place. Alcoholic drinks are where most casual-dining restaurants shine and where they make their profits. There’s a bit of magic in walking into a restaurant and seeing a finely crafted bar that is fully stocked with potions and taps and buzzing with communal activity. I also don’t hesitate to pay twice as much or even exponentially more for a cocktail at a casual-dining restaurant because it’s doubtful I will ever purchase the booze and other ingredients myself, acquire all the delightful glasses and stemware, and get motivated to figure out how to make it at home. Thank you, bartenders.
4. Chains have consistent food and service: In my adventures in executive recruiting for top restaurant executives, I’ve had the opportunity to meet many individuals who are highly experienced corporate restaurant trainers. I’ve come to greatly appreciate their talent, dedication, and passion when it comes to making sure that the legions of hourly employees provide the guests with service and food that consistently rocks (for evidence, see Jim Knight, Director of Training at the Hard Rock Café).
In the last few months of dining at some of the otherwise very alluring local independent restaurants, I had rice that was moist and well-seasoned the first time yet dry and bland the next, as well as a chicken dish worth ordering again that was somehow different in texture and not as satisfying the second time. It’s disappointing and puts me on my guard about going back to those places. Casual-dining chains, with their extensive training resources, are empires of creating standards and consistency, which encourages our repeat business and comfort level with going to them. It’s one reason I think that while the independents provide fierce competition, the chains will always be around.
5. Premium Sporting Events: Recently, I found myself at a regional casual-dining chain called the Hickory Tavern during a primetime competition of the growing sport known as mixed martial arts. The place was so crowded that my date and I were wedged, standing up, between a wall and a garbage can for what seemed an eternity (it was actually about two hours because we got there around 10 pm and the main event started at midnight). It was an amazing cultural experience, even though I was much more fascinated by watching the people around me and the gigantic plates of nachos baking in the wood-burning oven than watching the fight. Now I really want to go back to the Hickory Tavern to try those wood-fired nachos… something else I’m not ever going to cook at home in this lifetime. I witnessed a similar phenomenon of standing-room-only sports madness the one time I went to a local pub that doubles as a Steelers bar. Though I live far from Pittsburgh, it seemed like most of the men, women, and children of our town were there, ordering a steady stream of food and drinks for the duration of the game.
6. When dining out, we like to have all our senses positively engaged: As the saying goes, you eat with your eyes first. I’m talking about enjoying everything you see, hear, touch, or smell, and the general ambiance of the restaurant, along with the taste of the food. When I go to a restaurant, I can’t help but take in the plates, the art on the walls, the knick knacks, the lighting, and the color scheme. Casual-dining restaurants give a lot of care and attention to these things. If they are pleasing, it’s like putting money in the bank of my spirit, and I will gladly share that with the restaurant in the form of giving them real dollars.
7. Positive Engagement of Senses, part II: Eating from a disposable wrapper doesn’t nourish in the same way as eating a meal with non-plastic, quality utensils and table ware… no matter how good the cheeseburger, fries, and ROI is.
8. Positive Engagement of Senses, part III: Even the McDonald’s down the street from us looks like a Manhattan night club in comparison to some of the Spartan-looking fast-casual restaurants I’ve been to, which have brought to mind some of the worst aspects of public transportation. Because of this, I am sometimes concerned about being there and tread carefully inside of them. It often influences our choice to go elsewhere or cook at home.
9. Gatherings: Recently, I traveled to Atlanta and had dinner with my family. My mom was in charge of choosing the restaurant. Do you think she was going to bring us to Moe’s Southwest Grill? No, mom decided on the chain J. Alexander’s. The place was completely packed, so it’s a good thing she made a reservation. Besides the many parties who seemed to be eating there “just because,” the table next to us was celebrating a birthday, and the table in front of us looked to be on a prom date. Casual-dining restaurants have become an irreplaceable venue for all sorts of gatherings, celebrations, and rites of passage.
10. Improving economy: While there’s a lot of uncertainty in the economy, there are some positive signs. A quick check of the numbers shows that the Unemployment Rate was at 9% in April 2011, down from 9.9% in April 2010. On this day in May 2011, the S&P 500 index is at 1352 points, up about 17% from this time a year ago. I can’t help but think that some of these extra dollars bouncing around lately are trickling back into the casual-dining restaurants, as more and more people find they’ve got extra change to indulge on a fried calamari appetizer.
11. Entrepreneurship: One of the things I love about executive recruiting for the restaurant business is I get to see just what a teeming, dynamic marketplace it is. There always seems to be people willing to invest in the restaurant business and launch grand plans for love or money. The casual-dining segment is no exception. Chains are frequently being bought or sold, revitalized, or completely cooked up from scratch. The desire to risk one’s own heart, soul, labor, and capital in the restaurant business seems literally infectious for endless numbers of people, and it keeps the whole industry chugging along. If I had a nickel for every time someone said to me “this business has gotten into my blood,” well, I would gladly take a friend out for fajitas and adult beverages.
12. The World: A quick check of the headlines this year reveals that “T.G.I. Friday’s to Double Number of Units Worldwide.” Meanwhile, “Red Lobster Mideast Franchisee to Open Locations in Dubai and Kuwait City,” “Chili’s Grill & Bar Opens in Russia,” and “The Cheesecake Factory Awards Middle East Rights.” While they may have slowed down growth in the US, casual-dining chains are finding new avenues for growth beyond the borders.
13. and 14. Purchasing Power and Media Power: They casual-dining chains have formidable purchasing power and large marketing budgets. When they exercise this power to efficiently gobble up ingredients, supplies and media, they are a force to reckon with, another reason why they’ve got an edge on the independents.
15. The only game in (small) town: I’ve lived in and traveled to cities, towns, and suburbs all over the country, and I’ve observed that the farther you get from the city, the less cool, hip, and really special restaurants you have to choose from. When you get out of the city and into small-town USA, you have the left far behind the wonderful, unique establishments created by Buckhead Life Restaurant Group (Atlanta), Parasole Restaurant Group (Minneapolis), Starr Restaurants (Philadelphia), and the like. The demand for these types of places diminishes. While you can come across the occasional independent gem, it’s difficult to find. Inevitably, however, there is an Applebee’s, O’Charley’s, Ruby Tuesday, etc. in a prominent location, and it appears to be doing very good business. Last I checked the map of America, it was full of small towns.
Marc Buehler, former CEO of the Kona Grill restaurants, provided his thoughts on the relevancy of casual dining: “As an industry, casual dining has become the dinner table,” he said. “That wasn’t the case 30 years ago. Concepts that stay true to who they are will do just fine. Concepts that have an identity crisis will struggle. We know who the guest is and make sure that we provide good value.”
I think that as long casual-dining restaurants keep on offering inspired food, hospitality, atmosphere, and community gathering places that cannot easily be replicated at home or in a limited-service restaurant, they will continue to be relevant and to draw people around their tables.
Want to hire top talent for your restaurant company right now? Email Rebecca Patt at Rebecca.firstname.lastname@example.org.