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Consumer Trends

6 ways the global restaurant market is a small world

Executives of more than 340 restaurant companies gathered in Dubai this week to gauge the potential of international markets they’ve yet to penetrate. The 1,500 attendees of the Global Restaurant Leadership Conference heard about the peculiarities of specific markets—France’s resistance to the snacking boom, for instance, or the United Arab Emirates’ world-leading propensity to dine out.

But they also learned the global restaurant industry is in some ways a small world. Here are a few trends emerging overseas that will likely sound familiar to seasoned U.S. operators.

1. Disruptors rule

Shake Shack CEO Randy Garutti shared with the audience what he described as the key to the concept’s success: “Do those things that everyone else is unable or unwilling to do."

With delivery, for instance, “those brands that just want to bring it to you, that’s not who we want to be,” he said. Instead, Shake Shack plans to deliver food from one of its Korean restaurants via ultra-modern electric delivery vehicles driven by Shake Shack employees.

That ignore-the-traditional approach is particularly evident in the way the chain opens stores, Garutti stressed. Before a Shack fired up its grills in Brooklyn, the hipster area of the chain’s New York City home market, employees wrote “Before I die I want to ____” hundreds of times on a wall at the location, and then left chalk nearby. Passers-by proceeded to fill in the blank, and the spot became a topic of conversation before the first burger was flipped.

Similarly, another site under construction was temporarily turned into a phone recharging station to encourage interaction between would-be customers.

“When our chief financial officer hears an idea and says, ‘Ehhh, I don’t know about that,’ then I’m on the right track,” said Garutti.

2. Snacking is a global boom

The upswing in snack sales isn’t something peculiar to the United States, said Joe Pawlak, managing principal of Technomic and co-presenter at GRLC of a statistical report on the worldwide restaurant market. “In all countries save two, over 70% of consumers snack daily,” he noted.

The exceptions are France, where full-scale meals are a cultural norm, and China, where the breakdown of sales by time of day doesn’t parallel the pattern evident virtually everywhere else, Pawlak said.

He also noted that the UAE is arguably the world’s most vibrant restaurant market, with 86% of consumers visiting a foodservice facility at least once a week.

3. Ditto for delivery

Worldwide, “dine-in [restaurant] visits are now the minority,” said Pawlak. The Technomic research presented at GRLC indicated that 59% of all foodservice meals are now consumed off-premise.

4. Fake-out fish

Trying to pass off trash fish as a pricy premium species is now a worldwide Three Card Monte game pulled on restaurants, quality-assurance experts stressed during a breakout presentation. That and other forms of food fraud generate $10 billion to $15 billion per year in sales, said Alisha Gulden, VP of sales for the National Restaurant Association, citing Grocery Manufacturers Association figures.  The organization says about 10% of the global food supply is not what it’s said to be, she added.

But some potent assistance for restaurateurs is on the way, Gulden suggested. “Whole-genome sequencing is now being used to test the total makeup of that food,” giving purveyors a powerful tool to detect fakery, she said.

5. Casual-dining headwinds

The sales and traffic slowdown stinging U.S. full-service chains is spreading to other continents, a number of attendees noted. As in casual dining’s country of origin, competition among midmarket concepts is mounting as more sit-down places open, fast-casual chains gain a following, and consumers pull back on spending. Higher-end casual options appear to have some resilience, again echoing the situation in the United States.

6. A landlord is a landlord

One of the pincers squeezing operators abroad is a climb in real estate costs, an effect of heightened development, according to attendees. The restaurant-shrinking trend evident in the U.S., where 3,500-square-foot spaces are becoming more the exception than the rule, is catching hold in the Middle East and other regions, operators attested.

GRLC is presented by Winsight, the parent of Restaurant Business and its research sister, Technomic.

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