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The Food Institute Blog

The Food Institute Blog

Consumers Buck Sit-Down Restaurants for Faster, More Convenient Options
Posted on September 19, 2016 by Chris Campbell

What's for dinner? This timeless question has haunted Americans for ages. For many American consumers, the answer involves traveling out of the house to enjoy a meal prepared by someone else in a business setting, but recently, they've seemed to shift from sit-down restaurants to other options that offer more convenience and a better bang for the buck.

Sit-down restaurants across the board are seeing sales slide. Sales at established locations dropped for five straight years at Ruby Tuesday, spurring their CEO to resign. Chili's saw same-store sales drop 2.2% for the fiscal year. Applebee's reported falling sales for the first two quarters of 2016. Darden Restaurants even sold Red Lobster in 2014 after sales declined for years.

Sure, there is a debate on whether consumers are spending more on food at-home or away-from-home, but the minutia is irrelevant. The fact remains that consumers today are much more likely to spend their hard-earned dollars away-from-home than they were previously. And these consumers seem to be picking more affordable fast-food and fast-casual options. As evidence, Panera ousted Applebee's in a list of the top 10 restaurant companies by sales in 2015, according to Technomic. Applebee's was the last sit-down restaurant on the list. According to Technomic's Darren Tristano:

“They’re looking for convenience, quality, portability and healthfulness."

Coupled with concerns of an oncoming "restaurant recession," this trend could spell hard times for the American sit-down restaurant industry. A glut of supply and increased competition from independent operators aren't helping things, either. However, Panera, Sonic and other similar establishment won't be affected as much as Buffalo Wild Wings and McDonald's, according to Canaccord Genuity. Analyst Lynne Collier notes:

“We have a cautious outlook on the restaurant industry in light of recent top-line issues and ongoing elevated labor costs ... Overall, we think the consumer is relatively strong given an improving consumer confidence and employment, robust new home sales and rising wage rates.”

So, what's for dinner? For American consumers, it seems to be fast-casual and fast food for now.

 

About the Author

Chris Campbell
Business Writer
The Food Institute

Chris focuses on fresh, canned and frozen fruit and fresh and dried vegetables for the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He is a proud Rutgers University alumnus with a degree in English, and has a background in web writing for a variety of industries, including legal, foodservice and small-to-medium sized businesses. In his downtime you can find him watching New York Yankees baseball, hiking, enjoying live music and spending time with his dog Kaiden. He invites you to contact him via email at chris.campbell@foodinstitute.com to talk about anything food-related.

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