Meeting the needs of today’s restaurantgoers

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Quiznos’ new prototype, shown here in a Milwaukee location, features an expanded counter space for orders and a bench for third-party drivers waiting for the order, which is placed out of the way of the in-store guest. Courtesy Quiznos

Susan Lintonsmith
President and CEO, Quiznos

We all love to try new restaurants. Fortunately for those of us in Colorado, we have so many wonderful choices that run the gamut from quick-serve chains to chef-developed concepts with locally sourced menus. There are more food and experience options available today than ever before. Restaurant companies are responding to this rapid growth, while also planning ahead for changes being driven by technology and convenience trends. This is a great time for consumers and for real estate professionals, but a challenging time for restaurateurs. As is typical for the business world, you need to evolve quickly to succeed.

Our franchisees will tell you that when they opened their Quiznos 10 to 15 years ago, they had a handful of the typical sit-down and quick service restaurants in their community. Today, in the same area, there are at least twice as many competitors, offering many different types of foods and service alternatives. There are over 1 million restaurants in the United States with nearly $800 billion in total sales, according to the National Restaurant Association. In Colorado, 2017 saw around 12,000 eating and drinking locations with total restaurant sales exceeding $12 billion. The number of restaurants is growing at about twice the rate of the population, and it doesn’t appear to be slowing.

This isn’t meant to deter those who have a dream of entering restaurant ownership, nor has it! The crowded playing field has spurred creative menu concepts and ideas to enhance quality and convenience. The increased competition has made the industry even stronger.

In response to the growing competition, some QSRs have tried to strengthen their brand differentiation by either focusing on fewer items and value pricing, often identified as QSR-, or by improving their service experience or food quality, identified as QSR+. The fastest growth in the industry in the past decade has come from fast-casual restaurants. The newer concepts provide higher quality foods than traditional QSRs, with slightly more complex flavors and recipes, and “counter-plus” service, at a slightly higher price. And they require smaller footprints compared to casual dining. A fast-casual restaurant may be part of an in-line strip center and need 2,000 square feet, whereas a traditional casual dining tenant is typically stand-alone requiring over 3,500 sf. In addition, fast casuals require less labor, which is a benefit given increasing wages.

Technology has had one of the biggest impacts on the restaurant industry. A positive or negative review on social media can immediately impact a consumer’s decision about whether to dine at that location. Restaurant marketers are using geo-targeting to efficiently reach guests at the optimal time, in the right location, with the right message, all within the store’s prime trade area. Restaurants have upgraded their point-of-sale and kitchen systems for faster and more efficient service, improved their websites for easier online and mobile ordering, and launched apps and loyalty programs to better connect with guests.

Consumers rely on the convenience of mobile apps to make reservations or to order and pay for their meal. The growing number of off-premise orders is having an impact on the physical store design, including space and layout needs. Some brands are opting for much smaller spaces in expensive urban locations to focus on to-go and delivery orders. Some concepts are building a second food line in the back of house dedicated to take-out and delivery orders to ensure the experience for their dine-in guests isn’t diminished. In-store guests waiting to order or receive their food don’t want to wait longer just because the kitchen is slammed with online orders! Some QSRs have decreased the allotted space for guests to wait in line to place their order and have expanded the pick-up space for time-sensitive guests who ordered ahead to “skip the line.”

Some restaurants also have dedicated prime parking spaces for those who are picking up their online orders. In some technologically advanced places, consumers may not have to interact with a staff person. They can order and pay at an in-store kiosk or on their mobile device, watch the status of their food preparation on a monitor and pick up their order at an assigned location. Or, they can order online and use third-party delivery services as a convenient alternative. Third-party delivery has seen incredible growth.

In response, restaurants need a place for the drivers to park, a space to wait for and pick up the food, and a way to get it out the door quickly so the order gets to the consumer hot and fast.

The restaurant industry is growing and changing rapidly to meet the needs of food and tech-savvy consumers. Restaurant companies are using technology to become more efficient and productive, while responding to the growing number of online and delivery orders by evolving their designs. Although challenging, it’s an exciting time to be in the restaurant industry.

Competition and technology are helping restaurants “up” their game. It’s a great time for those in commercial real estate as Colorado’s growth doesn’t seem to be slowing, and especially for those of us who enjoy the continuously evolving dining experience. Now let’s go eat!

Featured in CREJ’s May 2018 Retail Properties Quarterly.

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