What is the future of Casual Dining

October 8, 2019

Bill and T.J. Palmer had a vision of creating a unique casual dining experience for the community they were residing during their time in Atlanta. In 1980, they ventured off to make this vision a reality. The concept was simple during that time, high-top tables with a sports-like environment. The menu ranged from finger foods to more substantial dishes like ribs and steak. It didn’t take long for their restaurant to find success. Three years after the launch of their first restaurant, the concept was sold to a hospitality group in 1983. Once called T.J.’s Applebees has now changed to Applebee’s Neighborhood Bar and Grill.

From 1986 to 1993, more than 1,000 Applebee’s restaurants opened all over the United States. What was great for consumers dining in a sports bar, was detrimental for small casual dining restaurants around the area. This set a precedent for new concepts to spring up throughout the country for the next 20 years. Now the tables seem to be turning. Applebee’s traditional concept does not seem to be attractive anymore. Last year, Applebees announced that they would be closing 60 – 80 locations throughout the USA. Other restaurants like IHOP, Ruby Tuesday’s and Buffalo Wild Wings are also experiencing closures. It is sending a message that casual dining is no longer relevant for most people. New concepts like fast-casual dining as well as a Grab and Go have better catered to a demographic of Millennials and GenZ.

What is Fast Casual?

Fast Casual combines the beneficial elements of having the consumers order at the counter. It’s similar to fast-food restaurants but with the amenities of a full-service restaurant. Consumers still have access to cutlery and plates. The atmosphere is a bit more upscale in comparison to McDonald’s. What makes fast casual so attractive is the access to different ethnic cuisines that consumers are drawn to nowadays. The price for a fast-casual dish is generally higher than a meal at a fast-food restaurant. However, consumers are tired of the traditional concept of burger and fries. So they are opting for Vietnamese, Indian and Latin American dishes that are readily available at Fast Casual stands.

Who is Fast Casual Attracting?

The entire concept of fast-casual is providing food options to a demographic that is always busy. They are more likely to eat at work or at home than their previous generations. More importantly; they are open to discovering new concepts. Millennials and Gen Z have dominated the fast-casual market for the past 20 years. Future sales projections determine that Millennials will be the biggest spenders in the food and beverage industry.

With more spending power than any other generation, millennials are venturing into uncharted territories with regards to dining experiences. Something that casual dining restaurant does not provide.

Not Just Convenience, It’s Curiosity.

Another trend to take into consideration is the power of a niche audience. 3 in 4 millennials admit that experience is a priority when dining out. Millennials are choosing restaurants with innovative concepts and attractive offers. It has influenced many restaurant chains like McDonald’s and Burger King to think outside the box with their different kinds of offers. Many restaurants are focusing on creating limited-time offers which get incredibly successful.

The Pumpkin Spiced latte from Starbucks or the McRib sandwiches at McDonald’s is providing the footprints necessary for other franchises to experiment on their niche items. Burger King made headlines by presenting the Impossible Whopper. Starbucks continues the trend of creating offers for its niche audience. Introducing their Unicorn Frappuccino for a limited time it generated buzz towards millennials and Gen Z who are willing to invest their money into a unique experience.

The business of pleasing everyone

The younger audience is benefitting from new concepts introduced by the restaurants. Yet, there is still the older generation that still prefers tradition over a new concept. Many of Gen X’er still prefer the traditional casual dining style. They are willing to visit restaurants that didn’t deviate towards the younger audience while leaving the old behind.

Applebees has taken this into consideration. They are now offering half-price appetizers along with their low price drinks served during happy hour. This checks off boxes for many people who still prefer dining in places that do not offer crazy and unique menu items. Also taking into account that people still want to have a delightful experience eating out without spending an excessive amount of money. Many of Applebee’s restaurants seem to be closing. But those that are still open have to adapt to the spending power that Millennials have without neglecting the early fans of the restaurant.

Conclusion

Restaurants who have managed to keep the concept of Casual Dining for many years need to change their perspective on what is defined as casual dining.

Posted in: Insights, Trends