We had the opportunity to talk with John Dillon, the CEO of the 90-unit bakery/café chain La Madeleine, and he told me about fireplaces.
Specifically, he noted that the fireplace in the center of most of the chain’s restaurants remains a focal point, providing the atmosphere that the chain’s customers—and, it turns out, its employees—want.
As such, he said, the company plans to make sure each new location has one.
While this is a simple move, and may prove a bit costly, it goes to the chain’s core strategy of preserving its dine-in heritage, even as more customers are using takeout.
Restaurant companies in recent years have bent over backward to focus on the growing percentage of customers yearning for takeout. But here’s the thing: Customers still prefer dine-in service. And brands cannot ignore that part of the business.
According to data from Technomic, dine-in service scores higher with customers at both full-service and limited-service restaurants on prices, value and whether they intend to recommend, compared with off-premise service.
Robert Byrne, senior director of consumer insights for Technomic, presented the data at the National Restaurant Association Show this week. “Nothing beats your food right out of your kitchen,” he said.
Nearly three-quarters of restaurant visits right now are for consumption outside of the restaurant. But repeated data points demonstrate that consumers still want good experiences inside those restaurants.
That’s why brands cannot forget that area of the business, even as they install mobile-order shelves and spend big on AI drive-thru chatbots. If that dine-in customer gets a good experience, they will be more likely to come back for some takeout down the line. And if they get a bad experience, they may opt for something else.
Starbucks has made improvements to its in-store experience, such as ceramic mugs. | Photo courtesy of Starbucks.
For evidence, we point to the recent experiences of the two biggest restaurant chains in the U.S., McDonald’s and Starbucks.
In 2017, McDonald’s pushed an ultra-aggressive remodel of its dining rooms. It was so aggressive that the chain’s franchisees created an independent association.
The remodels seemingly fixed the restaurants in areas that didn’t necessarily need them. After all, two-thirds of customers were going through the drive-thru. Why add kiosks and nicer tables?
But the in-store service provided a better setting for McDonald’s customers. The kiosks added some service consistency in an environment in which workers are focused on that steady stream of drive-thru customers. As it turns out, customers like nice restaurants, even if they don’t spend a lot of time in them.
That gave the chain a major advantage over competitors like Burger King and Wendy’s. The brand’s same-store sales have been mostly up since then, with declines during the pandemic and more recently as menu-price inflation cost the chain traffic.
On the other hand there is Starbucks. The coffee chain known as the “third place” spent all of its time building a drive-thru service and increasing traffic through mobile orders. And it replaced some of its in-store benefits, like self-serve cream stations and nice seating. And then its sales started falling. The brand had its worst non-pandemic year since the Great Recession and its new CEO is furiously trying to fix things, largely by reversing many of the chain's previous moves.
Customers may be getting takeout. But it’s the in-store experience that will keep them coming back.