After several recurring lockdowns, which drove a growth in off-premise dining, restaurants are receiving more and more dine-in guests as the sector continues to recover from the global pandemic, reports Howard Riell
Are we seeing on-premise dining bouncing back? The short answer is yes, but it isn’t that simple. The pace of its recovery varies according to several factors, including the return of workforces to surrounding offices, the scarcity of restaurant labor, segment, menu composition and inflation, along with the concomitant rise in costs and prices. At the same time, operators must take care to maintain their pandemic-fueled off-premise business.
“On-premise dining has come back a little and should continue to build,” says Chris Tripoli FCSI, a principal of The Restaurant Doctors in Canyon Lake, Texas. “Most operators tell us that dining-in isn’t back to pre-pandemic levels, but it is hard to determine if that is due to concerns about being out in public or changed dining habits that now include more home delivery.”
“Yes, on-premise dining is coming back,” agrees David Tripoli, like his brother a principal at The Restaurant Doctors. “However, the best indicator to track this is not simply the use of sales performance. Prices have increased quite a bit since the pandemic, and with inflation so sales figures are bloated.”
The best way for operators to track customer use is by analyzing guest counts, he adds. “That guest count should include on-premise, carry-out and delivery. It would be good to know what that total number is, and if it is back to, or exceeding, the level of pre-pandemic.”
“Of course it is coming back,” says Paul Bartlett FCSI, principal of Kitchen Solutions Consulting, LLC, in Baltimore, Maryland. “Among my clients, the numbers for those who weathered the pandemic are at one-third to one-half higher traffic and number counts compared to pre-pandemic times. People must eat, people are on the move, and all sectors of foodservice are thriving if they meet customer demand.”
Restaurants are responding in a variety of ways, Bartlett finds:
- Simplifying processes and menus
- Focusing on peak operations times
- Diversifying delivery methods through online ordering and third-party deliveries
- Focusing on parties and banquet opportunities
- Renovating physical spaces as budget constraints allow.
“I don’t see a bounce back – I see a stabilizing effect,” explains Melva Sine, president, and CEO of the Utah Restaurant Association. “Restaurants are balancing between hiring all the people they need, if they can find them, and dealing with the financial concerns of paying these people $18 an hour.” Many restaurants are trying to keep customers happy and costs down by not hiring more employees, she reports. “Once you pay $18 an hour it will be hard to pay less. It’s a balancing act, and prices to eat in restaurants have to increase as part of this balancing act.”
Different segments are understandably reacting differently. QSRs are busy “because they are relatively inexpensive, and folks will walk in over Covid and separation,” notes Rudy Miick FCSI, CMC, founder of The Miick Companies in Boulder, Colorado. Fine dining is busy “because folks with money have never had more money.” The fast-casual segment is “lost in the shuffle for the time being, not quite fine-dining and not QSR. This segment is “stuck in a post-pandemic no-person’s land – not quick, not restorative.”
Chef John Franke, founder of Franke Culinary Consulting, LLC, in Argyle, Texas, has seen midscale casual-dining establishments returning stronger. “This is the sweet spot when it comes to dining out. Not too expensive, not too pretentious, good for dates, work outings and families.”
Back to work
Employees – both inside restaurants and elsewhere – turning up for work in buildings is an important key to continued growth of on-premise dining. Juan Martinez FCSI, principal and co-founder of Profitality in Miami, Florida, sees on-premise returning, due largely to “people’s and businesses’ desire to go back to normal.” Based on statistics, he reports: “Employees are finally coming back.”
“The impediment is getting workers back in their offices full time – to the extent we can – and filling the vacant office space,” says Tracy Vaught, co-owner along with husband chef Hugo Ortega of Hugo’s, Backstreet Café, Xochi, Caracol and Urbe in Houston, Texas. “In Houston our vacancy rate is around 30%, and of the occupied offices only 60% of the workers are in the offices day to day. As companies give up unneeded office space, the vacancy rate will get worse. There is no quick solution. This could take three, or more, years.”
Tom Mac Dermott FCSI, principle of the Clarion Group in Kingston, New Hampshire, reports that a large research institution client that had been averaging $6,000 a day in cafe retail sales pre-pandemic has seen sales gradually increase to $4,500 – then stall. “I asked my client when she thought they’d be back to full employment. ‘We are,’ she said.”
The difference between pre- and post-pandemic is Zoom usage and working from home. This 25% reduction in people going to the office every day probably has an impact on restaurants that depend on nearby workplaces for customers.”
Stathis Antonakopoulos, executive chef and owner of Carnegie Diner & Cafe with locations in New York City and Secaucus, New Jersey, and the quick-service Pizza & Shakes in Manhattan, says on-premise dining has bounced back by about 75% of pre-pandemic numbers. “Local employees in offices are still low, and our office catering business is down 60%. Our business lunch numbers are down 40%.” Tourist figures are about 85% of pre-pandemic levels.
The gradual return of on-premise dining gives rise to a host of issues with which operators must contend, beginning with labor. “Finding, training and retaining service staffs seem to be a continuing challenge for many operators,” says Chris Tripoli. There is also a balancing act between dine-in and take-out. “Many operators succeed with the increased off-premise guests by offering a separate take-out/delivery menu of items that can be prepared quickly and travel well.”
Protecting off-premise business must also be considered. Armand Iaia FCSI, regional manager for Cini-Little International, Inc., feels that maintaining those sales “will require some effort, especially if a facility has developed a robust take-out. They may need to look at some expansion and setting up a dedicated pick-up area and/or creating a separate take-out menu that is easier to prepare than the full restaurant menu.”
“One can hypothesize that off-premise provides a reminder that the restaurants have on-premise,” Martinez says, “But, for the most part, these are two different occasions.” Maintaining off-premise at the same time, he adds, “remains an important challenge for restaurants.”
Howard Riell
