What Will Become of Chain Restaurants?

What Will Become of Chain Restaurants?

James Sandrini 9th July 2018

We’ve been penning a little series entitled ‘the future of restaurants’ recently. It’s been fun. You should read it. Later.

We’ve also spent a few hundred hours in interviews, in the studio and out at dinner discussing what is to become of the once dominant, high street restaurant chains. Years of optimism have been replaced by a rapid decline and the industry is ill-prepared to handle the myriad of changes it is suddenly being asked to master.

Technology has summited innumerate hurdles, beckoning in new customer behaviours and dragging government policy along, often to its whim. And as a result, the high street is changing. Eating out is changing. Food is changing. What will become of chain restaurants?

The restaurants of the future will serve breakfast, lunch and dinner; snacks, pick me ups and canapes; beer, wine and whatever else they can. Restaurants will be production engines, finding disparate ways to package, market and distribute their wares for our consumption, and experience lenders, pushing the boundaries of our expectations.

Here’s how:

Now

Savvy chain restaurant groups are already finding ways to personalise how they produce and communicate their offer. By incorporating a rich, single customer view – that’s CRM talk for combining every single breadcrumb of data into one tasty loaf of information – restaurants can predict what individual guests will want, when they want it and how they want it delivered.

Speaking of delivery, it won’t come as a shock that every food business, irrespective of size and scale, is considering how distribution can help them generate additional revenue, reach more customers and increase their brand awareness. For some, this means developing proprietary delivery channels. For others, it’s tweaking their offer to make it more applicable to a grab & go audience. More than ever, ‘restaurants’ are giving way to ‘food businesses.’

Transparency. Provenance. Authenticity. You don’t need me to tell you that this is where food is headed.

We’re also starting to see a change in how restaurants use their space. More collaborationsFewer services (and fewer shifts and hours for employees). I’d say ‘more pop-ups’ but this isn’t an article from 2012. ‘More vegan restaurants’ is also assigned to the predictive past.

Soon

We’ve made a few predictions already:

Less consideration for cuisine; a greater focus on dishes (you could argue that this is already happening)

Dynamic pricing in response to changing levels of demand. Maybe even supply too

Transparency. Provenance. Authenticity. Expect this trio to be joined by a new accomplice: Rather than tracking where ingredients have come from, attention will turn to where the money goes. A combination of the press, a new wave of operators and technology will empower guests to gain greater visibility into the workings of a food & drink business and choose where they want their ‘investment’ to end up.

This will include tipping certain team members, posting payments into ‘pots’ where they can allocate funds towards training & development, operational expenses or new site investment. Someone will come up with a better title than ‘live crowdfunding’ but let’s not forget who told you about it first.

The major shift, however, will be how eating out is perceived.

We’ll continue to be persuaded to eat out regularly by the galvanising quartet of working hard, living in small properties, residing far from our place of employment and lapping up our daily dose of FOMO. But we’ll be particularly swayed by places that amplify our preference for experience over possession.

"Estates will compartmentalise. Restaurants will be replaced with a wide array of audience-targeting venues, from kiosks outside busy office blocks, to pop-ups in contract catering strongholds, to meal kits to in-flight food to wherever else their ingenuity takes them"

High street retail, what’s left of it anyway, has figured out the value of experiences. Dining options increase dwell time, reward less engaged members of a shopping committee and basically make their shop a more favourable destination for more people.

Unfortunately for restaurants, there is little value in reciprocation. So, they’ll be forced to find novel ways to up the ante. Don’t think live music, think augmented reality menu apps that show you what each dish would look like on your plate. Forget quiz nights, imagine VR changing your entire surroundings to match the flavour profile of each course, complete with characters to guide you through the story.

That takes some imagining today, but the non-tech building blocks are there: Personalisation, authenticity and experience.

Later

Even the best crystal balls start getting a bit hazy when we peer over the horizon, so we’ll step away from capricious consumer trends and veer towards business models.

Despite the success of challenger brands – they’re better placed to take advantage of the move towards transparency et al – restaurant chains can and will flourish in the future. Only, they won’t necessarily do so with high street locations. Estates will compartmentalise. Restaurants will be replaced with a wide array of audience-targeting venues, from kiosks outside busy office blocks, to pop-ups in contract catering strongholds, to meal kits to in-flight food to wherever else their ingenuity takes them.

Supplier and distributor will become closer. Farm-to-table exists on a micro-scale now, but reductions to agricultural stipends will wipe out any validity to the farming model, provoking restauranteurs to step into their own supply chain and take ownership.

On the other side, Deliveroo will run out of cash, UberEats will get distracted fighting for a bigger prize, and none of it will matter because Amazon is best set to win the war to import, export, send and receive everything. Chain restaurants will live with the ‘Amazon-cut’ having only just survived the ‘Deliveroo-tax’ of the here and now.

And, if you’ll allow me to keep dreaming, chain restaurants might just be revered for their invention, not just their reliability.