We hate to be the bearer of bad news, but things aren’t all ”sunshine and rainbows” for casual dining establishments at the moment.
We wish we had better news, but it’s the truth. In fact, casual dining restaurants saw a drop in traffic by 5.8% in the first half of 2024.
But why? What’s causing footfall to decrease? And more importantly, how can you buck the trend and increase restaurant revenue?
By the end of this article, you’ll have the answers to all of these questions.
Keep reading to find out what’s happening in the industry right now, and how casual dining restaurants can tackle the challenges head on.
Why are things tough for casual dining restaurants at the moment? A look at the current landscape
Let’s start with a hurdle we’re all too familiar with: The labour shortage.
Labour shortage
That’s right — the industry is still suffering from a lack of staff.
Combining Brexit with changes to the immigration system in the UK means that the usually-wide pool of potential staff has lessened dramatically. In fact, there were 102,000 vacancies in hospitality between March and May of 2024.
This article from the Guardian is just one example of how restaurants are struggling to find and retain staff.
For casual dining restaurants, this means that staff numbers are dwindling but there simply isn’t enough talent to fill the gaps.
Competition from other restaurant types
The summer of 2024 has been a busy one for sports. The tennis at Wimbledon, the Paris Olympics, and of course the Euros, where England made an appearance in the final.
Pubs reaped the benefits of this busy period, with visits rising by 7% during the games. But casual dining? A 4% decline in footfall when compared with the same period in the previous year.
This shift shows that diners preferred watching the games at pubs to other dining establishments, perhaps so they could focus solely on watching the screen with a drink as opposed to being seated and enjoying a meal.
This shift also suggests people in greater numbers were opting to watch the games at home, potentially opting for takeout or delivery instead of dining out.
Food costs increasing
The cost of ingredients is high, there’s no doubt about it. But the good news is that inflation rates are easing, according to research from Meaningful Vision.
But even though inflation rates are settling, casual dining restaurants are still missing out.
Meaningful Vision’s research found that fast-food restaurants maintain higher price growth on their menus at around 5%. They’re outpacing the overall food price inflation rate. Casual dining, however, opts for a more moderate approach, increasing prices by around 3%.
This more reserved increase is likely due to lower footfall. If you have fewer people walking through the door, you might be nervous about upping your prices and scaring them away.
Changing customer preferences
As always, changing customer preferences is one of the moving targets for casual establishments.
Look at dining hours as an example. Figures show that casual diners prefer to visit casual establishments during breakfast and lunch hours, with better performance recorded between 9am and 3pm).
But come the evening hours? The numbers are dwindling.
This is just one example of how casual restaurant operators need to be on top of customer wants, needs, and demands to remain profitable.
Think about it — by understanding that customers prefer daytime visits, you can optimise your staffing accordingly. This means increasing the number of staff available during the day and reducing numbers during the evening (or closing altogether if footfall is really low). These decisions help you remain profitable.
So, what’s the solution?
There isn’t a one-size-fits-all approach to these challenges. However, there are some tactics you can apply to tackle the issues that apply to your casual dining restaurant.
Invest in people
With the labour shortage looming over our heads, investing in people is the first port of call to ensure that your restaurant is fully staffed.
By investing in your workforce, employees are more likely to stick around. This ensures you have enough staff on your roster, but also that they’re dedicated and skilled in their work. Not only does this benefit your entire restaurant operation, but it also motivates your workforce. You’re happy, they’re happy, and (hopefully) you won’t be left in the lurch without staff to cover busy shifts.
So how do you invest in your team?
Effective training is a good place to start. By investing in employee learning and development (or L&D), you show employees that they’re a valued part of the team. You want their skills to grow because they matter to you and your restaurant. What better way to make them want to stay?
Technology is also a valuable tool for enhancing the employee experience.
Take a look at this Hawksmoor case study as an example. Combining its people-centric strategy with technology, the restaurant chain achieves nine out of 10 of its managerial promotions from internal movers and shakers.
A system like Nory, for example, can enhance the employee experience right from the get-go. From onboarding new hires to handling payroll — our restaurant management software allows you to seamlessly engage and reward your employees.
Upgrade your marketing
One of the best ways to encourage more people to dine in your restaurant is to increase brand awareness.
The more people that know about you and trust your brand, the more likely they are to dine with you. In fact, 58% of adults say that the reputation of a company is a major factor when making purchasing decisions.
Maximising your social media presence is a great way to kickstart your marketing efforts.
Not only will this help your brand reach more people (an active account is believed to be more likely to appear on explore and discover pages), but it’s also a chance to showcase who you are as a brand.
This is a great way to build an emotional connection with your online following, building trust and encouraging them to dine with you.
Take a look at Griolladh’s social media channels as an example:
Their account is full of fun and engaging content that showcases their food, but also people enjoying it. There are reels and videos of real diners (and some influencers, which builds trust and increases reach) showcasing how delicious their cheese toasties are.
BRB, just going to drool over here for a second. 🤤
Refine your tech stack
Having the right hospitality technology in place is crucial to overcome the challenges in the industry right now.
Think about the labour shortage as an example. With the right technology in place, you can minimise the impact of the labour shortage on your operations to remain as profitable and efficient as possible.
QR codes are a good example. If you’re struggling to cover the floor, QR codes or self-service kiosks allow diners to order their own food. This means fewer staff are needed to take orders and it speeds up the ordering process, meaning you can get a higher turnover of tables without needing more staff to man the floor.
Now, we know what you’re thinking. Doesn’t QR code ordering replace the charm of face-to-face ordering? In some cases, yes — but for casual dining restaurants, it could be exactly what your diners want.
New research shows that more customers want technology in key parts of the ordering and payment process, with 49% preferring contactless payment methods. There’s also a lot of research that implies that diners are on board with technology if it streamlines their dining experience.
So what technology should you be using in your casual dining restaurant?
A platform like Nory is a good starting point. Our AI-powered system helps you optimise your entire restaurant operation from inventory and supply chains to sales and profitability of menu items.
But don’t just take our word for it — take a look at some of our success stories to see for yourself.
For example, you can see how CUPP used Nory to centralise its tech stack to track real-time sales performance, optimise staff schedules, and manage inventory from the same platform. Gone are the days of flicking back and forth between different platforms and using spreadsheets to manage key operations!
“In the hospitality sector, you need everybody singing from the same hymn sheet. Having a central system like Nory helps us align our process across all our locations, which has been fundamental to our productivity and growth.” – Paul Tanner, Managing Director at CUPP.
Consider pricing promotions
Casual dining establishments are underselling their menus in comparison with other quick-service restaurants, like fast-food places. And we get it — increasing prices is scary. If you’re not on board with the idea, there are other ways to increase revenue,
Promotions, for example, are a growing trend with casual dining restaurants at the moment, up 13% from last year. It’s a great way to tackle the challenge of inflation without hiking prices and potentially scaring diners away.
To ensure you create profitable deals and promos, it’s a good idea to review the performance from your POS system (like Vita Mojo). By reviewing your performance, you can identify which menu items are the most profitable and which could do with a boost in sales.
For example, you might decide that you want to promote your least popular but highly profitable items (also known as “puzzles”). To do this, you create a promotion with your most popular and profitable item (also known as a “star”) to increase sales and profits.
It might look like this: Buy our classic cheeseburger and bacon-double cheeseburger and get a free side of fries.
The results? You increase sales of your most profitable items to cover the rising cost of your ingredients, and customers get some free fries. Result.
Hot tip 🔥 Head to our blog to find out how to strategically increase menu prices without scaring customers away.
What are other casual dining restaurants doing to succeed?
Take a look at how these successful casual dining restaurants are succeeding in the current climate:
- Training staff: Nando’s. The peri-peri-style chicken restaurant takes a unique approach to training, allowing employees to choose how and when to do it. It involves cross-training through different departments, NVQs, and their Buddy and Host schemes. This scheme pairs new hires with a buddy (like a mentor) and a host (like an onboarding expert) to support them through their journey into the restaurant team.
- Building their brand: Byron Burgers. The casual burger joint has managed to position its brand as a top-quality and indulgent burger place — despite actually being a casual establishment. This means that customers know they’re getting good quality food but without the pretence of a fancy dining experience.
- Building a franchise: Wagamama. Franchising can be a great way to grow your casual dining business and increase revenue from multiple locations. Wagamama, for example, has been growing internationally for over 20 years with venues across 22 different countries.
Find out more about how to use technology to franchise your restaurant, and how to maintain brand quality and consistency when franchising.
Nory success story 🥳 Find out how Griolladh scaled a successful franchise and grew its business by 3x with Nory. With essential visibility and control over its expanding operations and seamless integration with Toast POS, the business had real-time oversight of sales and performance to make quick and informed decisions about growth.
“Nory has been with us every step of the way. It’s been incredibly helpful to the business, and has played pivotal role in the successful franchising of Griolladh.” – Jacob Long, Co-founder at Griolladh.
Help your casual dining restaurant thrive with Nory
We’d be lying if we said that things are going to get easier from here. To be honest, we don’t know what the landscape will look like in a few years. But what we do know is that there are ways you can overcome these challenges to keep your casual dining restaurant profitable.
Using technology like Nory, for example, gives you the power to make smart and informed decisions about your bottom line in real-time.
FAQs about challenges facing casual dining restaurants
What is the meaning of a casual dining restaurant?
A casual dining restaurant is… well, casual. It offers a relaxed atmosphere, a moderately priced menu, and table service — usually with some form of takeaway as an option, too. Think of it as sitting somewhere between fast food and fine dining. It has a more laid-back experience than formal restaurants but with higher quality food and service than fast food outlets.
Is a casual dining restaurant the same as a quick-service restaurant?
Not technically, no. A casual dining restaurant usually offers a sit-down table service, whereas QSRs primarily focus on speed and convenience. Customers place orders, receive their food in a matter of minutes, and usually take it to go. If they dine in, there’s no table service.
