The restaurant trade is an incredibly tough business to be in. Casual dining chains in particular have been struggling of late, citing Brexit-inspired staff shortages and rising food costs, higher business rates as well as increased competition are contributors to the difficulties. However, those are not the major drivers.
Casual dining chains have expanded at a reckless rate, replicating the same footprint time and time again like a machine with total disregard for the changing needs of their diners. Sadly, it might be too late for those already shutting down their restaurants. For others, however, there is still hope, provided they can restore focus on the customer So what should dining chains do to become relevant again?
It starts with a consistent brand experience that meets expectations.
In part, the “branded” casual dining sector was created to provide customers with a consistent experience whichever branch they go into. When restaurant chains don’t deliver that consistency it quickly becomes an issue because they undermine their whole reason for being. Unfortunately, when private-equity owners force a restaurant chain to scale too quickly, that consistency is often compromised.
But what really kills chain eateries is people. Too many at-scale restaurant companies think they’re in the food business. They’re not. They’re in the people business.
Here’s why. Walk into a branch of, say, Pizza Express, and you can tell right away if you’re going to have a good or bad meal. You can tell immediately, just from the feel of the place. You’ll get a more concrete clue from the way the staff greet you. Are they pleased to welcome you, too busy to welcome you, or resigned to uttering the stock welcome line approved by corporate? If it’s either of the last two, you can also expect your food to be wrong, late and carelessly prepared.
The tone is set by the manager and how good she is at leading a team, motivating staff and valuing them. If she’s resigned to being a cog in the corporate wheel, then all her staff will behave like that too.
The other dynamic impacting the manager’s ability to serve his or her diners well is the increasing fad of “eating-out-in”. Gone are the days when a restaurant owner seriously thinks about whether they have a “takeaway” offering and what impact that may have on the consistency of service they offer and overall brand image. It’s too easy to sign up for services like Deliveroo, but the knock-on side effects of this decision end up negatively impacting the in-restaurant experience.
The stresses and strains of running a low-margin business also mean many branded chain restaurants have fallen foul of three things.
First, upselling. How many times have you heard “Bread and olives while you wait?” This is pushy and unsubtle, and completely flies in the face of a great dining experience.
Second, promotions. Who wants a free bottle of prosecco for your birthday and 17 email reminders to claim it? This, among many other sad attempts to get diners into their restaurants, is diluting brands. For example, 2 for 1 deals smack of convenience and fast food - a quick, cheap mid-week treat. A place you wouldn’t then consider for a romantic meal or celebration, yet these occasions bring higher revenues and profits, and greater advocacy opportunities.
Finally, the food. Sounds obvious, but why is Jamie’s Italian offering burgers, steak frites and Sunday roasts? If you put ‘Italian’ above the door customers will expect really good food from, er, Italy. So stick to really great pasta. Pizza at a push.
To be successful, restaurant chains need a deep a deep understanding of who their customers are - and aren’t - and what those customers’ needs are, and the organisational agility to keep pace as those customers’ needs change.
The casual dining industry needs to provide the consistency of experience it has promised, without the cookie cutter format designed to an averaged customer stereotype. The restaurant manager and her team are vital in creating the right environment. Along with a tighter, more focused menu, this is bound to be a recipe for success.
Jenny Burns is CEO of KBS Albion