Restaurant Industry Struggling To Turn Things Around
Quite a few restaurants have been having an issue with sales lately.
Places like Applebee's, IHOP, TGI Friday's, and Ruby Tuesday, have had to opt for closing dozens of their restaurant locations. Just a couple of weeks ago, it was announced that Applebee's and IHOP would see at least 160 restaurant closures. However, they are going to be looking to open over 100 locations in other areas around the world, hoping to find a more lucrative venue location.
Other legendary restaurant locations that have also fallen on hard times are places like Bonefish grill, Carrabba’s Italian Grill, Chili's, Longhorn Steakhouse, and Olive Garden.
Market analysts suggest that the casual-dining segment is facing increasing troubles; there's been repeated mention of a recession in this space. A variety of factors are said to be contributing to struggle for so many restaurants, and that is things like the abundance of competition that's out there (good for the consumer), as well as the trend of more consumers opting for quick service chain restaurants, and an increase in those who are are simply choosing to stay in and cook/eat at home.
A report from EquiTrend previously found that millennials are more in favor of fast-service restaurant chains than the casual dining competitors.
We can see that the restaurant industry is struggling for many, and so it's only natural that they would be trying to find a way that they can better compete with the faster restaurant chains, trying to provide something new to the consumer.
Some suggest that the Instagram trend is fueling the interest for consumers to opt for alternative places to eat; how 'instagrammable' the restaurant environment is plays an important factor in whether or not consumers will decide to eat there.
We have seen on frequent occasion that Instagram and other social media sites have certainly helped to fuel the popularity for particular food products and restaurant venue locations. It's helped to spawn an interest for things like smoothie bowls, rainbow-colored doughnuts, unicorn frapps, towering milkshakes, and more.
One thing that restaurants are newly doing to try and compete, aside from looking to provide new products and transform their look and restaurant venue space, is offering delivery service to consumers.
And since it's expected that in the years to come that more consumers are going to be looking to order their food online, this looks like a smart move on their part. Some have opted to establish their own in-house delivery services, while other companies are going with third party businesses that provide the delivery service for them. These third party services would be companies like DoorDash, UberEats, Skip The Dishes, and others.
Food delivery is estimated to be a $43 billion industry and is expected to grow to $76 billion by 2022.
The delivery options are increasing and that only means more convenience for the consumer. You can now find delivery options for just about everything, from wine and caviar to pizza, ice-cream, and more. Restaurants that you can now find providing delivery, via third party services, are places like Wendy's, Baskin-Robbins, McDonald's, Buffalo Wild Wings, Cheesecake Factory, Red Robin, and Outback Steakhouse.
Not every business is going to be looking to get on board with the third party services because they might not want to endure any extra cost. But for those who do look to cater to the consumer in new days, by embracing delivery if they haven't before, it'll help them to likely come out ahead of those who neglect to make any changes to keep up with changing market trends.
Apart from design changes and re-branding, new services like delivery, and new menu items, other competitive solutions that have been tried are things like specific food marketing events.
Olive Garden has introduced a BOGO pasta campaign where consumers are able to buy one meal to eat and enjoy at the restaurant, while they get a free meal to take home and eat later on. For another food promotion example we can look to Red Lobster, they've helped to set themselves apart from the crowd by offering events like the Lobsterfest and it's Endless Shrimp campaign, this marketing helps to create more of an experience out of the event and that is just what consumers today are looking for.
Pics:
Scott Olson Getty Images via fortune.com/2017/02/17/dineequity-applebees-ceo/
Simpsons/ via reddit.com/r/TheSimpsons/comments/4q9e5b/uncle_moes_million_dollar_birthday_fries/
Simpsons via Giphy
Pixabay
Home Alone via imoviequotes.com/wp-content/uploads/2014/10/1-Home-Alone-quotes.png
Sources:
http://www.businessinsider.com/restaurant-industry-sales-traffic-worst-recession-2017-5
https://www.washingtonpost.com/news/wonk/wp/2017/08/08/the-insane-43-billion-system-that-gets-food-delivered-to-your-door/?utm_term=.4a9ed29f8269
http://www.businessinsider.com/can-chains-survive-death-of-casual-dining-2017-2
http://www.wral.com/olive-garden-bogo-deal/16930507/
https://www.cnbc.com/2017/08/30/restaurants-could-be-hit-even-worse-than-forecast-after-harvey-batters-texas.html
http://www.nj.com/news/index.ssf/2017/09/restaurant_chains_closing_in_nj.html
http://elitedaily.com/social-news/doordash-food-delivery-service-delivers-wine/2039309/
https://www.usatoday.com/story/money/2017/08/10/many-160-applebees-and-ihop-locations-close/556343001/
http://www.businessinsider.com/millennials-endanger-casual-dining-restaurants-2017-5
http://nordic.businessinsider.com/olive-garden-darden-ceo-restaurant-industry-closures-2016-10/
https://thenextweb.com/opinion/2017/06/07/millennials-are-killing-chain-restaurants-thanks-to-instagram/#.tnw_LmFuz4s4
https://www.nbcnews.com/business/consumer/why-millennials-are-hooked-chain-restaurants-n768326
https://www.usatoday.com/story/money/2017/08/10/many-160-applebees-and-ihop-locations-close/556343001/
https://www.veinteractive.com/blog/7-food-delivery-trends-2017/
In Europe, third-party delivery companies are thriving as well. An application called Deliveroo is pretty huge here, it's similar to UberEats.
so the workers lost their jobs. why does it happen like that?, @doitvoluntarily. Nice post
I don't think changing the motif or changing the menu will save the food industry. I believe the problem lies in people's falling disposable income and I don't know how changing a business model will result in boosting sales. What I am seeing is restaurants are trying to reduce their overhead such as employing robots or going to self service ordering. In the short run, changing menus and themes of the restaurant will likely improve the restaurant's market share but the overall market share appears to be shrinking. So in the long run, I think there will be less businesses in the food industry. I am wait for the mergers to start, this will prolong the economic viability of some businesses. As for myself, I stopped dining out years ago.
I do not like to eat in public places. But millions of people love it. I understand that now is a difficult time for everyone, it's too expensive to order food in a restaurant for many people. In addition, ordering food home is much easier. I think only the largest and most popular restaurants will be able to work. Or the cheapest cafes. The middle segment will not stand the competition.
The main reason behind this is the home delivery offered by some big brands like dominos, pizza hut and Mac'd. People have not so much to go and dine out when they can get it the place of their ease and have fun .
Good post. Interesting perspective on the restaurant business in the states.
nice post
Very interesting steem as always great information and just nice to be in the know
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