A lot of chain restaurants are facing difficult times in the current economic loom. Many of them are having slow sales all year. With food and labor costs rising, the restaurants can't cover up for investments and cost of operation.
Casual dining is taking the plunge in the restaurant industry as a whole. It was reported that the chain restaurants were failing because they could not attract millennial. This is true but you can not totally blame the younger customers. They prefer to cook at home or order food than eating out in a restaurant. They crave convenience which comes in form of trendy and cheap fast-casual chain restaurants.
Another problem is the decline in the use of shopping malls. Most of the restaurants have branches inside or near the malls. The locations in suburbs have also added to the struggle and sales decline. The price of groceries have reduced which also encourages the millennial to opt for cooking at home. Restaurants are facing competition from supermarkets who provide selections of meals.
Most of the restaurants have been creating escape routes. Olive Garden started endless promotions with Endless Classics Deals. Applebee installed wood-fire grills in all their locations which cost them about $40.5 million of franchise investment money. It was a concept to attract customers but sales dropped and they did not see return on the investment. The C.E.O; Julia Steward stepped down as the company announced their earnings. Some economists believe chain restaurant like Applebees are having problems because they are refusing to adapt to modern consumerism.
What is Consumerism?
Consumerism is the consumption of goods excessively. American consumerism can be traced back to the 1800s. Since the second industrial revolution, the world’s consumption rate have been going higher. There were a lot of products made available by the revolution. It led to creation of jobs in factories, use of rail track, heavy production of automobiles. With these, many people started earning money for the first time. These led to the people being capable of buying things in excess. Consumerism dropped for a period in the 1920s due to Great depression but bounced back by the end of World War 2 and has increased tremendously since then.
Consumerism can also be defined as the protection of consumers against bad business practices which include adulteration, misbranding, black marketing, fraud, corporate bullying, profiteering, favoritism, hoarding, false practices.
Adulteration: It is the addition of a material to food item to increase the quantity of the food item which actually contaminates it or decrease it's quality. The food item thereby fails to meet the required standard set by state and federal government.
Profiteering: It is an unethical way of making profit mostly through manipulation of prices.
Misbranding: This is when a product is labeled in a misleading way.
Hoarding: It involves buying a product in large amount to push up the price.
Black marketing: It is the buying and selling of things in an illegally.
It has been argued that modern consumerism is critical for a successful economy. Most economists believe that the society depends on the activities of the consumers and consumerism encourages the flow of currency in the society today. Modern consumerism is shown by rich Americans and celebrities. They own fleet of cars than they can drive for a whole week, they own clothing that they don't wear twice. They buy things they want not need. This is excessive consumption of goods and services.
Appleseed has a vast menu that offers low calorie meals but nothing is local about Applebee’s Neighborhood Grill and Bar. There is no difference between what you order in the restaurant and local ones. The style of dining is putting off younger generations. They therefore opt for local kitchens with fresh and made-from-scratch meals. The young people are looking for transparency. They want the restaurants to be more transparent about their menu and offer very healthy meals.
Consumerism in the restaurant industry has to do with people looking for a good place to eat that provides good food, good services and in a serene environment. Good branding identities would help promote a restaurant and make is successful. Branding a restaurant has to do with the image and promoting the restaurant in an attractive and appealing way. In recent times, the interior design of an environment must be projected in a way that the customers feel homely while they eat. The services must also be good enough to impress them. The major thing about brand identity in consumerism is attracting middle-upper class customers to your restaurant or brand.
As part of modern consumerism, chain restaurants should invest in retail technology. If millennial are failing to come to the restaurants, the restaurants should find a way to the millennial. The younger generation believe in getting what they need through their phones and personal computers. The restaurants should encourage deliveries to homes and work places. A restaurant’s business model must include mobile, web and social retail to attract millennial.
Restaurants in line with modern consumerism must implement strategies to help customers achieve their health goals. Your customers’ satisfaction must be your priority. They should provide low-calorie, well-cooked, healthy-conscious meals on their menu. Some menu items may sound healthy but are very high in calorie. You will be surprised that a Burger cans have fewer calories to a salad. At Applebee, the Grilled Chicken Salad has 1,200 calories while the Classic Burger has 700 calories. This is totally unbearing. This is death knell for Applebee Neighborhood Grill and Bar.
In conclusion, transparency is needed by chain of restaurants so they can survive. They should serve and offer healthy variety of foods in a serene environment that will attract this younger generation to them. Also, adaptation to modern consumerism will help chain of restaurants to survive the economic downturn. Restaurants building up different positive strategies to help their customers achieve their health goals and enjoy their meal in a serene environment.