Can Casual Dining Recover?

Americans love to eat.  Food is as big a part of the American day as any other aspect for most people.  In fact, nearly one third of all Americans have been diagnosed as clinically obese.  While Americans themselves may not be on a diet, their wallets are.  Restaurant sales at casual establishments fell by 5.4% in February following a trend of declining sales that started back in December.  Many believe that the economy is the primary factor in this drop in casual restaurant sales.  The rise in the cost of living, combined with rising gas prices and increasing payroll taxes has helped to spiral the industry on its first three month losing streak since 2010.

Some of these trends may not be entirely attributable to the economy, however.  2012 featured unseasonably favorable weather throughout the winter months.  2013 has not been so kind.  While the changing seasons cannot take all of the blame for the decline of restaurant sales, it can serve to ease some of the pain of the situation.  If restaurants want to pull themselves out of the cycle of declining sales, they need to do something.  We've talked about some of those issues in previous posts.  We recommend that you take a look back at those posts for in depth information, but the highlights include:

• Promotional offers
• Social Media Campaigns
• Guerrilla Marketing
• Customer loyalty programs

Restaurant Sales Down in February

The National Restaurant Association's index that measures restaurant industry health through same store sales dropped 0.8% to 99.9 in February, signaling that the industry is softening.  February was the fourth time in five months that the index saw a decline.  What does this mean for those in the food service industry? It means that you are going to have to work harder than ever to maintain your bottom line.  Analysts believe that the decrease in sales can be linked to the increase in gas prices and the payroll tax.  These two factors have families eating in on a more regular basis.

This presents a problem when restaurant owners are busy trying to attract new customers.  They cannot rely on their regulars to drive all of the business.  If they are going to continue to be successful, they need new faces seated at their tables.  To do this, we recommend that they engage in some new forms of guerilla marketing.  Take samples of your new menu items to the streets.  Give them to hungry unsuspecting people and encourage them to come to your establishment to try the rest of the menu.  If your food is as good as you are telling people it is, then they will come.  This is a new and creative way to get new customers through your doors.  It will also help you to strike up conversations with potential customers to gauge their tastes and preferences moving forward.