Restaurants are hiring, sales are booming, and new restaurants are opening faster than ever. It makes the old cliche “selling like hot cakes” have real meaning. The rise in sales seems to be across nearly all segments of the restaurant business which are usually classified as fast food, fast casual, casual dining and fine dining. Some new restaurants in the Denver area, mostly of the casual or fine dining kind, have up to a one-month waiting list for a dinner reservation.
The chart below shows a dramatic increase in sales from 2010 to 2012 for all segments of restaurants in the full service category:
Why is this happening? Some say that with disposable income down going out to a nice restaurant is still a less expensive form of entertainment than many of the alternatives. Does that mean that an improved economy will not be good for the restaurant business? Probably not, no one will stop going out to eat just because they can also afford Opera tickets.
A good reason that I can see is that the food, the service, and the ambience of restaurants has improved considerably in recent times. It’s now common for people to recommend a restaurant to their friends not only on how good the food was, but also on how “cool” it is, how innovative, interesting and comfortable they found the design of the interior space to be. The restauranteurs seem to know this and are responding accordingly. The proliferation of 4-color magazines with grand photos of restaurant interiors to accompany 800-word essays on fresh new designs is huge. The upscale restaurants depend on their interior designers as much as their chefs for competition in the slick magazines. That does not necessarily mean that chrome and glass are the way to go. Rustic can also be pretty cool, done with a certain style.
The restaurant sweet spot in the demographic is 18-34 year olds. This group is also said to be unenamored with television [a traditional reason to stay home] being more in tune with video games. Even if that’s wrong it’s also the age group most able to operate a DVR without help from an 11-year old. They don’t have to choose between going out to dine or staying home to catch a favorite TV show. They can have both.