This is the sixth story in Restaurant Business' weeklong series marking the fifth anniversary of the pandemic on the restaurant industry.
Five years after the pandemic turned the full-service restaurant category upside down, the segment finds itself pulled in two directions.
Should sit-down places offer convenience? Or an experience?
During the pandemic, restaurants known for on-site dining and table service became more convenient by default. They added pickup and delivery and other technology to get their food to customers stuck at home and keep their own lights on. Today, those survival tactics are table stakes for most full-service operators.
At the same time, the pandemic demonstrated that there is still demand for on-premise dining. When restrictions began to ease in the summer of 2021, consumers couldn’t wait to go out to eat again. They craved hospitality and togetherness, and that is still what sets full service apart from fast food.
In 2025, full-service restaurants are trying to reconcile those two divergent trends as they grapple with a new crisis. Due to inflation, consumers are dining out less. Well-known brands are closing locations, and some are filing for bankruptcy. In 2024, full-service traffic was down at least 20% compared to 2019, said Joe Pawlak, managing principal with industry researcher Technomic.
“It just seems that somewhat of a sea change has occurred,” he said. “If consumers are thinking of eating out, it’s either experience or convenience. And if you’re kind of in the middle there, not doing either real good, you’re gonna be left out.”
Before March of 2020, most full-service restaurants operated under the traditional model: Customers came in, sat down and ate. Many operations did not even offer online ordering.
“We did not have a stitch of technology in our restaurants,” said Matt Eisenacher, chief brand officer of breakfast-and-lunch chain First Watch.
When the pandemic struck, it changed everything. First Watch added online ordering, delivery, digital kitchen displays and QR codes, all in a matter of days. The process taught the brand that technology wasn’t evil, Eisenacher said.
“COVID gave us permission to kind of do a cannonball and try a lot of these things that we might have taken years to test,” he said.
It was a similar story for Cooper’s Hawk Winery and Restaurants. Prior to the pandemic, the upscale, wine-centric chain had been staunchly opposed to delivery. “We’re experiential,” founder and CEO Tim McEnery said. “We want people to come into the restaurant.”
Still, the company had created a delivery playbook, just in case. When its dining rooms were forced to close, it put that plan into motion in four days.
Innovations like these helped FSRs stay above water during the first few months of the pandemic. Today, they are part of the new normal.
Delivery alone made up 9% of all full-service sales last year, up from 4% in 2019, according to Technomic data. “People have become more homebodies,” said McEnery.
Cooper’s Hawk actually stopped offering delivery as restaurants reopened. But it relaunched the service a few months ago after realizing that some consumers prefer it.
It opened up a whole new way of doing business for a segment that historically measured its success by butts in seats. But it also threatened to erode full-service’s ethos.
“You forget that people come to full service because they’re taking time in their day for a pause,” Eisenacher said. “I do really worry that hospitality is being forgotten, and so if there’s something I can say for full service, we can’t forget why people use us.”
When consumers emerged from lockdown in the summer of 2021, they validated that idea. They wanted to indulge, celebrate and participate in the world again, and many of them went to full-service restaurants to do that.
That has been good for experiential concepts such as Cooper’s Hawk, which has done well even beyond the post-lockdown frenzy. In 2023, the chain’s sales rose more than 19% year over year, according to Technomic data.
“It’s not at that level of pent-up demand right after COVID,” McEnery said, “but I think it’s continued for sure.”
Other chains that focus on experience, such as Texas Roadhouse and Fogo de Chao, have also seen strong growth. Same-store sales at Texas Roadhouse rose 8.5% in 2024 amid an otherwise sluggish year for casual dining.
“The company's ability to maintain strong traffic growth is underpinned by its commitment to providing a high-quality dining experience,” Zacks Equity Research wrote in a report on the chain.
But the pandemic also habituated consumers to the luxury of food delivery and takeout. More than half of adults say that takeout is an essential part of their lifestyle, and 41% say the same for delivery, according to the National Restaurant Association’s 2025 state of the industry report. The numbers are even higher among Gen Z and millennials.
This has divided consumers’ dining patterns into two distinct occasions: experience or convenience. The polarization has been hard on full-service brands that don’t specialize in either.
“Consumers have just rethought their full-service experience, and what’s really getting hurt are those in the mid-range,” Pawlak said.
Indeed, two of the largest restaurant bankruptcy filings last year—Red Lobster and TGI Fridays—blamed changing consumer habits stemming from the pandemic and the ensuing inflation, among other things.
The shift has also been on display in the growing number of turnaround campaigns underway at full-service brands. Applebee’s, Outback, BJ’s and Red Robin are all focusing on improving their food and simplifying their operations so that customers come away with a better experience. They’re also investing in remodels to improve the appearance and atmosphere in their restaurants.
“What I care about is when that guest leaves the restaurant, I want them to be excited to return and have a strong intent to return and drive frequency of visitation,” said Mike Spanos, CEO of Outback parent Bloomin’ Brands, during an earnings call last month. “That's what matters.”
Notably, off-premise has not been as much of a focus of these turnaround plans. Chains such as Red Robin and Chili’s have wound down delivery-only virtual brands they added during the pandemic in favor of focusing on their regular operations, for instance.
2025 is expected to be another difficult year for consumers, and competition will be fierce. Full-service retrenchment will likely continue for a while. But Pawlak believes these changes will ultimately bring the segment into a better place.
“There’s still opportunity for full-service restaurants, but they have to change with what consumers are looking for and how the consumer has changed since the pandemic,” he said. “Convenience is paramount and so is experience.”