Ashley Kim /New Covenant Academy 10th Grade
Although Americans still love eating out, a lot of casual-dining chains are closing its doors and reporting dropping stock prices. The brands affected include not only Chili’s, but Applebee’s, IHOP, and even the upscale member of the group, Cheesecake Factory. Applebee’s president John Cywinski says, “The past 24 months have been extraordinarily difficult.”
At this point, more chains are struggling financially or simply trying to stay open, compared to actually benefiting from sales. However, there are still chains that thrive, including Panera and Starbucks. Analysts say that these “fast casual” outlets deliver a higher perceived value. They are basically inexpensive fast-food chains, and what makes some of them unique is their takeout and delivery services.
So many wonder, what is the key element in developing a successful restaurant chain? Definitely many CEOs have failed to hit the target, but in contrast, what were some notable strategies that raised moneymaking chains?
Business Insider says, “Casual dining’s biggest failure has been its inability to win over younger customers.” Along with John Cywinski, Applebee’s brand president, saying in a call with investors that “The closures follow the chain’s failed attempts to win over millennials.” Finally, Ruby Tuesday’s sets firm this idea that young customers are crucial to the success of the business as its acquisition reveals, “Winning over millennials isn’t optional ? it’s a life-or-death proposition for casual-dining chains.”
With this fact established that millennials are killing businesses like Buffalo Wild Wings and Applebee’s, analysts speculate their reasons for suddenly turning away from these casual diners. One of the changes is that before, nobody really went out of their way to find a specific food. Along with the fact that there weren’t as many restaurants as there is today. So, many restaurants tended to put as many choices on the menu, hoping to satisfy customers with any one of the huge selection. However, Americans now tend to judge a restaurant if its offers aren’t specific enough. The generation now places “quality over quantity” and searches for a unique appeal. Additionally, in this age of social media, restaurant dishes are often popular material for Facebook or Instagram posts. Therefore, the familiar food chains don’t make the cut.
Overall, restaurant CEOs need to come up with fresh ideas that keep up with consumer demand. As people are avoiding familiarity in dining, coming up with a revolutionary idea can really turn the tide in times of low sales like this. Currently, many have caught on with the trend and some are trying to consolidate their menus and focus on their specialties. While Applebee’s goes all-in on a ＄1 margarita promotion, and TGI Fridays is testing booze delivery. Like these companies prove, in times like this, keeping up with demands and keeping an eye on the game is definitely the smart thing to do.
<Ashley Kim /New Covenant Academy 10th Grade