Last year at about this time, I penned a column titled “Is Quick Service Ready for a Dine-In Renaissance?” Two years had elapsed since the start of the pandemic, and there was little sign that consumer behavior was going to tilt back in the direction of 2019.
As I wrote last year, the societal shift toward greater off-premises consumption of restaurant meals was well established prior to the emergence of COVID-19. At Firehouse Subs, the shift in channels of trade began in 2013 and continued unabated up until the start of the pandemic. Then literally overnight (March 15 to 16 of 2020 to be exact), all meals were consumed off-premises for several weeks before we finally started reopening our dining rooms.
During the months and years since, dine-in business remains short of where it was in early 2020. We’ve seen further growth since I wrote that column last year, and I suspect that this is the case for many limited-service restaurant brands. In short, a dine-in renaissance does not appear to be on the horizon. I think at this point, the most important question for brand leaders to consider is whether a robust dine-in business is material or not for their success.
There are advantages to be gained when transactions shift to other channels, but there are also downsides. Product mix can move in less than optimum directions. Food quality is typically at its best when served on-site. The more time a guest spends in your restaurant, the greater the potential for friendly interaction with your team. Great décor can enhance the experience, entertain, and even educate the guest. All these things have the potential to add value and create points of differentiation with your rivals. Excel at these things, and one would think that a competitive advantage would be gained, and an increase in market share would follow.
Yet as we move beyond the third anniversary of the onset of the pandemic, it doesn’t appear to me that the restaurant consumer has a pent-up demand for dining in, and operators have prioritized accordingly. Casual dining brands continue to report on the vibrancy of their off-premises channels of trade. Restaurant concepts of all stripes have announced the downsizing of their dining rooms, or the outright elimination of them, in some cases. There is a nearly universal penchant for driving digital transactions, which are predominantly tied to off-premises occasions. If the industry is leaning heavily toward improving the off-premises experience, the reason is simple: it is the way the consumer is leaning. It is where the most intense battle for market share is being waged.
There is an old-school restaurateur part of me that wishes that were not the case. I want to know my guests. I like seeing them enjoy their meals alongside their family and friends. If we make a mistake, I welcome the opportunity to make up for it on the spot. I savor the ability to set a plate of food before a guest, assembled and served with pride. I love the things about a restaurant that … well, make it a restaurant.
Of course, those opportunities to excel haven’t faded completely from sight. Dine-in may be a smaller percentage of the business, but it is not an insignificant part. Over the course of the past three years, with so much attention turned toward fine-tuning the off-premises channels (and rightly so), I’ve noticed that some restaurant brands have lost a step or two in their dine-in execution. My peers in casual dining are probably enjoying that. To be sure, casual dining has its own challenges and has experienced its own shifts in trade.
But for them, the dine-in experience is inextricably linked to their brands in a much more substantive way than limited services restaurants. I imagine they relish the thought that fast-casual concepts might lose a step or two in their dining room game; it creates a possible window of opportunity for them to strengthen their relevance, especially if they can marry it with a compelling value proposition. In the end, trends in technology, retailing, and consumer behavior may simply prove to be on a course that cannot be deflected, even by the most superbly executed dine-in experience. But that doesn’t mean that the need to excel in the dining room isn’t important.
Strip away the dine-in business from some concepts, and you strip away the margin of profit for the enterprise. Indeed, it may be more important than ever to be great at serving a meal to a beloved guest in your restaurant. It is part of the business that many operators cannot afford to lose.
Don Fox is Chief Executive Officer of Firehouse Subs, in which he leads the strategic growth of Firehouse Subs, one of the world’s leading restaurant brands. Under his leadership, the brand has grown to more than 1,200 restaurants in 45 states, Puerto Rico, Canada, and non-traditional locations. Don sits on various boards of influence in the business and non-profit communities, and is a respected speaker, commentator and published author. He was recognized by Nation’s Restaurant News as 2011’s Operator of the Year. In 2013, he received the prestigious Silver Plate Award from the International Food Manufacturers Association (IFMA).
