Listening to Kelli Valade’s bracing State of the Industry report during MUFSO in October was akin to having cold water thrown in one’s face. As the CEO of restaurant consultancy TDn2K, Valade knows her numbers, and the numbers she knows are of serious import to restaurateurs.
She presented a stubborn pattern of negative growth in customer traffic that has led inevitably to anemic same-store sales. At the same time, off-premise numbers are growing consistently and at the expense of conventional dine-in sales. Valade characterizes these shifting dynamics as structural, not cyclical.
So, Bret, we’d better get used to it, because it appears to be the new normal.
I have no basis from which to quarrel with Valade’s data or point of view, but I would point out that the changes she describes, while nothing short of revolutionary, are hardly the first structural upheaval to impact our industry. Back in the 1960s and ’70s, the emergence of chain restaurant systems permanently altered the balance of power and influence in the business and led to the creation of the industry as we know it.
Now many of these same chain brands find themselves confronting what appears to be a seismic shift in how consumers view and use their operations, even as they grapple with phenomena like third-party delivery, ghost kitchens, rapidly evolving technologies and stay-at-home patrons.
While apparent systemic change is deeply unsettling, the game’s not over for conventional restaurants. According to Valade, there are 29 brands out of the 150 she tracks that are reporting growth in customer traffic, and they have some important commonalities. Yes, the winners are committed to to-go sales; but importantly, they use dine-in sales as a differentiator and they provide excellent service.
In other words, they deliver good, old-fashioned hospitality.
It happens that hospitality was on a lot of minds during MUFSO. Kevin Boehm, co-founder of Boka Restaurant Group and recent winner of the James Beard Foundation Award for Outstanding Restaurateur, described his organization’s commitment to a service lifecycle that begins the moment the diner makes a reservation and ends when the valet puts the sated patron back into his or her car.
Then there is Maple Street Biscuit Company, a 2019 Hot Concepts Award Winner whose food was served at MUFSO, and which strives to create a “Cheers-like” environment in its fast-casual, breakfast/brunch operation. It strives to be a place where everybody knows your name; and even if they don’t, you’re always welcomed as an old friend.
Then in late October, Restaurant Hospitality reported on Plancha Latin Kitchen in Long Beach, Calif., a pan-Latin concept that markets itself as “fast-casual plus,” which means diners order at the counter but receive the full-service treatment thereafter. Realizing the importance of hospitality, executives hire according to “The Experience,” guidelines meant to ensure that employees “live to serve.”
This sounds like a tall order, but there are brands both inside and outside our industry that take the same no-holds-barred approach to customer service. They may have something to teach restaurateurs.
Take for example Uniqlo, the Japanese fast-fashion purveyor. Rack upon rack of jeans and trousers are all one length, but the retailer provides free, overnight alterations for sales in excess of $20, which covers most stuff. For sales under that level, the price is $5, and availability is still overnight. This is truly go-the-extra-mile service.
At the other end of the retail spectrum is Nordstrom, the blue-chip, luxury clothier that’s been beset by the department-store blues, and takes service to a whole new level in their spanking-new, New York City outpost. Here, headset-wearing food runners deliver dishes to shoppers feeling peckish while perusing the Pradas. The food, by the way, is created by James Beard Award-winning chefs and presented on china, because to-go containers are, how you say, tacky.
What’s more, five floors of the emporium actually have their own liquor licenses, so shoppers are never more than a stone’s throw from a life-saving double vodka on the rocks. The store’s vice president of restaurant operations is on the record that the idea here is to offer “F&B as blood sugar maintenance, to keep shoppers in stores longer.” This last remark about keeping the consumer captive is the key, of course.
Within our own industry, it’s easy to identify those few operators who go above and beyond in providing service. Chick-fil-A in the quick-service sector and Houston’s in full-service dining spring readily to mind, and I’m wondering if they represent the leading edge of a long overdue service revolution.
After all, it’s been more than two decades since we went through a culinary revolution that belatedly brought recognition to the professional kitchen and elevated the role and influence of chefs throughout our culture at large.
Do you think it’s possible to do the same for service?
This isn’t the first time you and I have discussed this issue, Bret, but it seems to me that it has taken on real urgency as many operators offload the service function to third-party delivery services.
Do you have any thoughts on the future of hospitality in our industry, and have you seen any brands either within or without that are doing a bang-up job of it?
NRN senior food & beverage editor Bret Thorn responds:
Wait a minute, Nancy, do you mean to tell me that I can get my clothing altered for free at Uniqlo? Overnight?
With my wide neck and short arms, I just spent a small fortune getting some new shirts and a sport coat altered. I did learn, however, that shirts for heavyset people like me are called “executive cut,” so I guess that’s good to know.
Anyway, as you said, change for restaurants is nothing new, and for many restaurateurs that’s part of the fun. I just interviewed legendary chef Patrick O’Connell of The Inn at Little Washington for Restaurant Hospitality, and he raved about the exhilarating thrill of working in foodservice — what he called the dual theater that is “the illusion and fantasy going on in the dining room versus the blood-and-guts reality of behind the scenes, what it takes to make it look effortless.”
Now a new drama is at play, one in which customers stay at home and tell their favorite delivery app to feed them, and it does!
Meanwhile, operators of restaurants — whether they’re virtual/ghost/cloud restaurants or ones with actual tables and chairs and maybe an honest-to-goodness dining room — figure out how to prepare food in a way that it will arrive at guests’ homes at the desired temperature and texture without having been pawed at, slobbered on or eaten by whoever’s delivering it, and do it in a way that they’ll be able to turn a profit.
Nancy, pizzerias and Chinese restaurants have been doing that for decades, and I have every confidence that other restaurants will figure out how to do it too. Adaptation is what restaurant operators do.
And as Kelli Valade pointed out, those restaurant dining rooms aren’t completely empty. Americans still like to go out to eat, but you have to give them a reason to put on their shoes and leave behind the comforts of home for a couple of hours.
Sometimes that can be as simple as Plancha’s “fast-casual plus” approach that you mention, which also is being implemented by Rockville, Md.-based California Tortilla. That 45-unit chain is also switching to real china and silverware, just like Nordstrom, ideally making customers feel just a bit more pampered.
Then there are places that combine food and entertainment, either directly with places like Dave & Buster’s or Kings Dining & Entertainment — a bar and grill with pool tables, video games, air hockey and pinball machines that I recently visited in Boston — or in a more holistic sense, like at Stanley Marketplace in the Denver suburb of Aurora, Colo., which I visited right before MUFSO.
Stanley Marketplace is the latest generation of food hall, in which restaurants, bars, retail and services all come together in a 21st-century-style shopping mall. You can go to your yoga class, have brunch, meet with your psychologist, visit the artisanal butcher and shop for custom home furnishings all under one roof.
Then, if you want, you can stop by the Stanley Beer Hall, where you present your credit card at the front desk, pre-load your tip percentage if you like, and then use the card they give you to help yourself to beer, wine, cocktails, cider and hard seltzer on tap. Servers take your food orders, scan your card and bring your food to you. When you’re done, you just drop your card in a bucket at the front and walk out, allowing for seemingly magical, frictionless payment.
Other food halls, like the various Time Out Market locations and Dekalb Market Hall in Brooklyn, N.Y., also have stages for live performances.
And of course there continue to be full-service restaurants that, in a perfect world, provide customers with excellent food, drinks and service.
As you know, Nancy, toward the end of the last century, during the heyday of casual dining, eating out in full-service restaurants had become a commonplace practice for middle-class Americans. Then fast-casual options emerged that provided food that was nearly as good or possibly better, but without the fuss of waiting for a table, waiting for your server to take your order, getting your food and drinks, asking for the check, waiting for the check, calculating the tip, waiting for the server to take the check and return with change or a receipt or both.
Modern technology has helped to streamline that process a bit, but now with so many other ways for Americans to feed themselves, the traditional full-service restaurant visit can seem like a waste of time — unless operators actually do provide an experience that their guests can’t get elsewhere.
For them to do that, Nancy, I agree with you that they really need to double-down on service. Their staff needs to be knowledgeable about the menu and treat guests how they want to be treated. They need to love their job or at the very least convince their guests that they do. They need to create that illusion of effortlessness that O’Connell was talking about.
Finding staff who are capable of doing that is challenging even when the labor pool isn’t as shallow as it is right now.
But for better or worse, the economy will start to falter at some point, restaurant closures will accelerate and those operators left standing will be the ones who have adjusted to the changing times, just as they did in all the other social and economic shifts that they’ve seen in the past.
Nancy Kruse, president of the Kruse Company, is a menu trends analyst based in Atlanta and a regular contributor to Nation’s Restaurant News.
E-mail her at [email protected]