Casual dining, meanwhile, was slower to adapt. When you toss in the time it takes to eat, and the added cost of tips, full-service brands had a far more complex task on their hands. Competing with value, on the bottom rung, presents more leeway. Customers are likely to forgive poor service and longer waits if they’re paying $1. But drop in average checks about one-and-half times that of counter-service competitors (if not much more), and the wiggle room disappears. It’s why execution, throughput, menu engineering, everyday value, and consistent service with fully staffed units, as well as identifying the right customer and real estate, is so critical to dine-in traffic.
This past year, though, was one of mostly positive news for casual brands. Along with fast casual (which has battled an overly saturated market in recent periods), casual dining turned in the best same-store sales growth in 2018 of any segment, according to TDn2K. Both were the worst performers in 2017, lending to robust year-over-year growth against weak comps. Still, the fact casual dining rebounded instead of bottoming out was a case worth holding on to. It came into the end of the year riding five straight months of positive growth. “Much discussion has centered around the viability of casual dining in this changing consumer landscape. However, the data shows some brands in the second largest segment within the industry have been able to turn the segment around this year,” TDn2K said.
There are a lot of factors separating the winners. Perhaps the biggest, though, is the aforementioned shifting consumer landscape, and whether or not a restaurant chain has the tools to satisfy off-premises demand without hurting core, four-wall promises.
What we’ve seen, basically across the entire restaurant lexicon, is an increase in prices and a decrease in traffic. That decline in guest counts remains a sobering counterargument for recent results. Even with an increase in sales, the chain sector has never faced a more competitive set. Outside pressure from independents, grocers, C-stores, and other to-go outlets continue to spread customer frequency.
But, again, is this just the new normal? Less traffic driving sales. More revenue from additional outlets, like delivery and take-out, and higher tickets from those who do dine-in? TDn2K’s data showed that in 2018, year-to-date as of December, to-go sales were approaching 9 percent, year-over-year. For some comparison, to-go sales in comparable stores lifted less than 4 percent in each of the past two years. It’s hard to understate how significant the change is. Just look at the holiday rush for instance, which gives a glimpse into what kind of opportunity awaits: Same-store sales growth for to-go, catering, and banquets all posted double-digit growth during the week of Thanksgiving compared to the same holiday period a year ago.