Thanksgiving is a time to stuff your face with turkey or whatever you choose alongside the people we love. Or at least those we tolerate because they make a mean turkey.
But it is also a time for Americans to take a step back and examine their lives and ponder what they’re thankful for. So we at Restaurant Business decided that this is also a good time for the industry we cover to do the same.
And thus, here are a few trends and issues the industry has to be thankful for in 2023.
Consumers really do like dining out
Restaurants have raised prices by some 30% over the past four years. They’re asking people to leave bigger tips and are more likely to charge “service fees” or some other excess charge to fund healthcare or wages or something else.
And yet sales remain surprisingly resilient. Sure, traffic is down. But much of the industry has kept sales despite a host of economic data that says consumers should be cutting back.
This has been the pattern of the past few years. When the pandemic hit, people quarantined for a couple of weeks and then they used any excuse possible to dine out, often tolerating hour-long drive-thru lines. When restaurants opened, they flocked there to the extent they could. Sales recovered far earlier than anybody expected.
While we’ve been beating the drum for some time about the value of restaurants right now, it’s a good bet that consumers will continue to look for any reason to eat out. And that’s a good thing.
Casual dining’s death was greatly exaggerated
Back in the Before Time, when a runaway virus was still the stuff of science fiction, a theory took hold that casual dining was hobbling toward the graveyard. Like cafeterias or old-style family dining (think Howard Johnson’s), the casual format was being pushed toward obsolescence by a slew of comely newcomers, in this instance the fast-casual upstarts winning favor among consumers, operators and investors alike. Or at least that was the doomsayers’ take.
That speculation was seemingly validated in the pandemic’s early days, when full-service places had to shut their dining rooms. We forget that the first thing virtually every casual chain did in that disorienting time was to pull down their lines of credit in hopes of just surviving. No one was sure that hope was realistic.
What everyone underestimated was consumers’ relish of dining out—not just eating restaurant food, but enjoying it in the hum of a dining room. That buzz couldn’t be packaged into a to-go container. Customers were starved for the entertainment of people-watching, having a professionally made margarita, and being served.
The segment should be grateful it’s more alive than ever. Indeed, the only thing that died were expectations of its demise.
Look at all this customer data
It wasn’t all that long ago that a guest could sit down at a restaurant, order, eat, pay and go without leaving any trace of themselves behind, preventing operators from knowing who their customers were and how they were behaving.
Widespread adoption of digital ordering during the pandemic has changed that. With the right tools, restaurants can now collect all kinds of information on their guests—especially emails and phone numbers—unlocking a new feedback loop that can help drive marketing and sales.
Though many restaurants have not yet fully harnessed this data, everyone should be thankful for how accessible it has become and for the potential it holds.
What did I make for Thanksgiving? Reservations
Remember when people cooked at home for Thanksgiving and independent restaurants closed for the night? Now consumers are embracing the holiday as a dining-out occasion, giving independent restaurants a solid kick-off to the party season.
Fewer consumers expected to purchase their entire meal from a restaurant this year (14%, down from 21% last year). But of those who were planning to get the whole meal, almost half (47%) are planning to dine in the restaurant, more than double that of 2022. As a result, many independent restaurants are fully booked for the holiday.
When guests dine-in, they spend more on beverages and other add-ons. And with commodity inflation easing this year, there is more opportunity for profitable sales. Thanksgiving also lends itself to manageable prix fixe menus that offer a perception of value. And guests are more likely to be feeling generous when tipping servers (who are, after all, working on a holiday).
Brunch is surging in popularity as diners embrace this daypart for its budget-friendly fare and boozy drinks that won’t break the bank. Operators should be thankful, as brunch allows restaurant kitchens a chance to stretch creativity with lower-cost ingredients. Even cross-utilize preparations from dinner. And the drinks side of the menu offers more opportunity to fatten margins.
Chefs are rising to the brunch occasion in restaurants of every stripe, from casual dining chains to hotel concepts. Menu items are going beyond the same-old Eggs Benedict and French toast to Israel-themed spreads with bagels, smoked fish and shakshouka and Asian brunches featuring dim sum, congee and sushi.
With today’s more flexible work schedules, brunch hours can even extend beyond the traditional Saturday and Sunday time slot. A number of restaurants are offering brunch on Fridays and Mondays, and some have gone to seven-days-a-week service.
And we at Restaurant Business are thankful for all of you. Thank you for reading and have a wonderful holiday.
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