While competition in the restaurant industry is heating up, the restaurant industry has been slowing down. October was the first month since May of 2016 that same-store sales turned positive—according to TDn2K data in The Restaurant Industry Snapshot, same-store sales jumped 0.9 percent in October after experiencing disappointing sales throughout the third quarter of the year. However, same-store traffic declined by 1.5 percent, proving that getting guests through restaurant doors is a major challenge.
In order to build on the mild momentum that began in October, restaurant concepts need to evaluate what they’re doing to attract customers. In an age when consumers have more options than ever before when it comes to where to eat, it’s up to brands to stay ahead of the latest trends. That’s why 1851 Franchise spoke with industry experts to break down what’s next in food franchises.
1851 Chief Development Strategist notes that there’s one segment of the restaurant industry that’s going to continue building steam: healthy food. With health and wellness continuing to be a top priority for a record number of consumers across the country, brands need to keep in mind that consumers may be looking for a low-calorie option on the menu before deciding where to dine. But Fitzgerald also advises that that’s not the only area of the restaurant industry that’s trending.
“More and more people are looking for healthy food options, which is why the trend isn’t going to go away any time soon. But that category isn’t the only thing that’s going to be popular going forward,” said Fitzgerald. “Restaurant brands are looking for ways to expand outside of their four walls. Carry-out, delivery and online ordering are set to play an even bigger role in the restaurant industry in the months ahead. That’s why brands need to figure out their delivery strategies now—if they haven’t already.”
One company that’s helping restaurants extend their reach outside of their brick and mortar locations is Restaurant Revolution Technologies, Inc. It’s partnering with brands to direct all aspects of their off-premise business, including takeout, delivery and catering. And according to CEO Brad Duea, the next frontier in off-premise is “ordering food for delivery direct from restaurants outside the delivery marketplaces.”
“Off-premise is the biggest trend and opportunity in the industry. According to a recent Technomic Report, nine of 10 Americans order takeout or delivery once a month and 56 percent of the restaurant dollars spent by Millennials and Generation X is toward takeout and food delivery,” said Duea. “The opportunity is massive, and it’s all driven by convenience. Customers want an increased number of options to order food in the most convenient way possible that suits them in that particular moment. With massive customer demand, the explosion of third party delivery services and the increasing industry headwinds surrounding the slowing of dine-in traffic, the pressure continues to mount for operators and chains to act now and embrace off-premise, in particular food delivery.”
Restaurants who are able to successfully bring their brick and mortar experience to customers through takeout, delivery and catering ultimately have a greater opportunity to see sales rise in an industry that’s slowing down. Demand is high for services that can get food to consumers when, where and how they want, and now, it’s up to restaurants to tap into that.
Duea said, “Food Delivery is the big disruptor in the industry – yet there is only modest penetration to date. The continual evolution of food delivery will unfold over the next few years in fascinating ways, creating opportunities as well as competition via technology and innovation. Direct ordering for delivery via restaurant websites, drone delivery, the usage of AI and more virtual restaurants will continue to change the experience of ordering, serving and the delivering of food.”