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Why casual dining should listen to consumers instead of Jonathan Maze

The problem isn't oversupply. It's under-demand.
Restaurant Business

Does it make sense for casual-dining concepts to close locations as a way to save the segment? RB Executive Editor Jonathan Maze and Editor-at-Large Peter Romeo offer opposing points of view. For the alternate take, see The Bottom Line.

peter romeo jonathan maze

My once-balanced colleague would like the casual-dining market to lose the equivalent of an Applebee’s, presumably in short order, to create a windfall for the places that remain. That’s like figuring you’ll get more of mom’s after-dinner apple pie if you just put out fewer dessert plates. Yeah, you might—might—get an extra forkful or two. But wouldn’t it be better if you just pushed for a bigger pie?

Casual dining is less a casualty of overbuilding than a victim of under-demand, the near-systematic turnoff of the consumer types who once made the sector as hot as any in the business. The idea was to provide the generation that grew up on fast food with places where they could get a simple meal and an adult beverage without hesitating because of price or a too-limited array of choices.

That simple formula was lost in the rapid expansion that followed for the sector, but not because of the increase in supply. It was a classic example of boiling a frog. Compromise after compromise, though each very slight, undercut the sense of getting a meal that an independent might proudly offer, but at a price reflecting the economies of a chain.

Two decades of knee-jerk copycatting only made the situation worse.

Euthanizing 2,000 units isn’t going to fix those demand problems. It’s just going to limit the options available to a disenchanted consumer base. The customers who shift a visit or two to the surviving restaurants will be there by default, not desire.

Meanwhile, they’ll still feel that tug from the fast-casual market, where they can get everything they would from a casual place—except the often slipshod service that tacks another 15% onto their bills.

And don’t forget the siren call of traditional quick-service places, which mastered the art of reinvention while casual let its relevance wane, too preoccupied with competitors to stay in tune with customers.

It doesn’t have to be that way, though. Look at the success of casual newcomers like HopCat or The Lost Cajun, places that are proudly different and don’t care if that turns off some potential patrons. HopCat, for instance, flat-out warns families they’ll have to come early or not at all: After 10 p.m., anyone under 21 will be turned away because the concept is all about drinking beer.

It knows the fallacy of trying to be all things to all people, and focuses instead on giving its limited fan base—true beer explorers—what they want. That allows it to avoid the marketing slogan suggested by Jonathan’s solution: “Eat and drink here because other places aren’t open.”

Maybe a unit or two of his 2,000 unplugged stores could serve as labs to rekindle casual dining’s mojo. Otherwise, they’d just be indications the sector has thrown in the napkin on fostering demand.

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