The casual dining boom in the United States began around 20 years ago, ushering in an era of mozzarella sticks, artichoke dip, and two-liter mango margaritas. However, the landscape has shifted dramatically. With the rise of fast food and fast-casual dining options, traditional casual dining establishments are facing significant challenges. This article explores seven strategies to help restaurant owners increase their profits in this evolving market.
The casual dining sector has seen a decline as consumers shift towards fast food and fast-casual dining options. This article provides seven actionable strategies to help restaurant owners boost their profits, from localizing their marketing efforts to enhancing the quality of their offerings. By implementing these tips, restaurant owners can navigate the changing landscape and attract more customers.
The casual dining sector experienced a golden age about two decades ago, characterized by the novelty of unique appetizers and vibrant atmospheres. However, the sector has faced a downturn in recent years. According to a report by Technomic, the casual dining category saw a decline of 5% to 8% in 2010, with a further drop of 3% to 5% forecasted for 2011 (Technomic).
Fast food and fast-casual dining options have become increasingly popular, offering diverse and high-quality food at lower prices. The average bill at casual dining chains has increased three to four times over the past two decades, while fast food prices have remained relatively stable. This shift has led to a decline in casual dining patronage.
National advertising campaigns are common among casual dining chains, but local engagement is crucial. Franchisees should focus on becoming integral parts of their communities. Localized marketing efforts can foster a strong connection with customers, similar to the loyalty seen with mom-and-pop establishments.
Lunch is a critical time for competition between fast food and casual dining. According to Darren Tristano, Executive Vice President of Technomic, business users often have limited time for lunch. Reducing the time it takes to serve lunch by 10 to 15 minutes can attract more customers during this crucial period.
Alcoholic beverages are high-margin items that can drive dinner traffic. Technomic's research indicates that only 14% of customers drink alcohol in the afternoon. Implementing earlier happy hours can attract more customers and increase overall sales.
In addition to happy hour drink specials, consider offering discounts on menu items. For example, Steak ‘n Shake's half-price milkshake promotion often leads to additional orders of burgers and fries. Similarly, Braxton Seafood Grill's happy hour lobster promotion frequently results in orders for multiple beers and side dishes.
Quality is paramount in the restaurant industry. Customers notice details such as the freshness of tortilla chips and the fullness of their glasses. Avoid cost-cutting measures that compromise quality, such as charging for soft drink refills or reducing the number of servers.
Slashing prices to attract deal-seekers is a short-term strategy that can harm long-term profitability. According to industry expert Sinclair, this approach attracts customers who are unlikely to return once the promotion ends. Instead, focus on offering unique value that differentiates your restaurant from competitors.
Customers visit specific restaurants for unique dishes they can't find elsewhere. Avoid falling into the trap of offering generic menu items that blend into the background. Innovate and offer distinctive dishes that set your restaurant apart.
The casual dining sector faces significant challenges, but restaurant owners are not powerless. By implementing these seven strategies, they can navigate the changing landscape and boost their profits. From localizing marketing efforts to focusing on quality and unique offerings, these tips provide a roadmap for success in a competitive market.
By understanding these trends and implementing the strategies outlined above, restaurant owners can position themselves for success in an evolving market.
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