Is Casual Dining so "Yesterday?"

Is Casual Dining so “Yesterday?”

            I came up through the fine-dining segment of the restaurant industry and witnessed casual dining operations in their infancy and learning to walk.  Clearly casual operators did an excellent job of learning how to walk and then run away with growth for several decades.  Now it appears those same casual dining operators are feeling the pinch of the demographic changes that are driving so many other aspects of current society experiences.

            Industry observers do a great job of explaining what is happening by the numbers; however, if the practitioners of casual dining operations want to understand the external forces affecting their segment they’ll need to look a little further than their P&L statement.  As reviewed in recent Nation’s Restaurant News blogs (http://nrn.com/blog/restaurants-fight-losing-pricing-battle) and (http://nrn.com/black-box/report-weak-restaurant-same-store-sales-continues-june-0) casual dining is being squeezed from lower grocery prices and eating at home while simultaneously consumers seek the deals and price points of the quick-service segment.

            Both of these scenarios might suggest consumers are still being careful with their budgets regardless if they have any actual disposable income or not.  The point of this message is there may be a third force in action that is pressuring casual dining, changes in the demographics of the dining consumer.  The “Boomer” generation drove the growth and sales of casual dining operations as it fit their “life style” and in case you missed it the “Millennials” have just eclipsed the previous drivers of the economy by over 1 million plus.

            This new “driver” of the economy just doesn’t fit the casual dining business model for what they are seeking in their dining experience, new flavor profiles and nutritional awareness.  A recent article from a menu / product development point-of-view speaks to this groups interests in food options (http://www.preparedfoods.com/articles/118054-article-headline).  Convenience has always been a stalwart of the dining public and that accounts for the rapid rise in the fast-casual segment; however, the article also addresses the demand from Millennials that food look appealing, taste great and of course “be good” for you. 

            So in steps the fast-casual segment with a combination of that convenience and an upgrade in food quality and flavor profiles at a higher price point than QSR’s and a lower one than casual dining.  Although there has also been a recent slowing in the acceleration of the fast-casual segment its’ growth in openings and sales is still outpacing casual operations again driven by the dining needs and demands of Millennials. Fast-casual operators understand and cater to Millennials who have adopted what I call the “Starbucks Halo” or the ability to customize their food and beverages with an almost disregard to price, if they can get it their way!

            Beyond the ability to customize their dining options this new ‘force of nature’ has stepped beyond fusion with mashups such as cronuts or nacho lasagna as they seek unique flavors and food combinations.  Their busy life styles see up to 35% snacking their way through the day as time for traditional meals wanes.  Interest in bowl-based foods offering cuisines from Asian to Latin to noodles may soon eclipse the burger for this demographic.  They also seek healthful foods as we see in the decline of sugary drinks for green teas and organic coffee.  We routinely review the changes in food service to support our clients, so for guidance on how to navigate changes in the restaurant industry contact us at www.themenuspring.com.