Restaurant Chains Are Disappearing In America

The golden age of traditional restaurants has come to an end. Changes in consumer behavior, digital innovation and the emergence of new takeaway platforms have caused a whirlwind in the catering industry in the past 10 years.

Nowadays, restaurants are competing not only from their peers but also from other catering channels, such as grocery stores selling delicatessen, online takeout platforms and DIY food distribution service companies.

DIY Dinner Delivery Service (Meal-Kit) is a new form of food service. It provides ready-made ingredients, seasonings, and recipes by the merchants. When it arrives at home, the guests can quickly make their own dishes.

Eating habits are changing.

In recent years, Americans spend less and less time in senior chain restaurants. Nowadays, more and more office workers tend to settle their lunches on their desks, which brings great losses to the whole catering industry. Last year, the passenger flow of high-end chain Western restaurants fell to its lowest level in 40 years, with restaurants losing $3.2 billion in dividends.

The sooner the diners want to get the food, the better. Then they pack it and leave. So they want the prepared meals more. This trend has been observed among diners of different ages. In addition, more and more people focus on health and want to control the raw materials and ingredients of their meals. This trend has brought a lot of passenger traffic to supermarkets offering cooked food, such as Whole Foods, Harris Teeter and Kroger.

"Compared to the food prices of restaurants, the prices of food in supermarkets have been decreasing in the past 5 years." So supermarkets that offer high-quality food at low prices are more attractive than restaurants.

In addition, in recent years, the number of Americans working at home has also increased gradually, with an increase of one million Americans working at home compared with 10 years ago, Aaron said. This trend has prompted the rise of takeaway mobile phone software and the DIY catering service delivery company. These phenomena show that consumers are turning to more convenient choices.

Three days before Blue Apron's public offering, Amazon announced its purchase of Whole Foods for $13.7 billion, which posed a huge challenge to DIY's catering and distribution services. This will not only affect DIY's food distribution services but also reshape the U.S. grocery and catering industry. After the merger, perhaps the giant can even change the way Americans eat.

Casual restaurants used to offer good services at reasonable prices to attract a large number of customers. However, in 2015, casual restaurants were the lowest in all food and beverage categories.

Meanwhile, fast food and fast food restaurant chains began to grab more market share. Arby 's is an example of a fast moving restaurant. While maintaining fast food prices, the company has improved the quality of its food, and McDonald's is imitating this strategy. Since the beginning of this year, the growth of McDonald's stock has reached a new high of nearly 30%. And sales were good in the second quarter of this year because of changes in new management strategies, such as the recent signature sandwiches.

While many chains are still using Microsoft Excel to analyze consumer data, Domino's, Starbucks and Panera Bread have invested in more sophisticated technologies, including machine learning and artificial intelligence. Panera Bread recently announced that it would start offering delivery services to gain more market share.

Unfortunately, many industry leaders are too slow to adapt to changing consumer behavior and are afraid of the risks of change.

Reference:

https://www.businessinsider.com/classic-restaurant-chains-disappearing-2016-3

http://www.epochtimes.com/gb/17/8/25/n9567503.htm