Fast Food May Be Your Only Dining Out Option Left, Experts Warn
The pandemic has hit the restaurant industry hard, and the dine-in options in your hometown will likely shrink before the dust settles. Because independent restaurants are disappearing at a higher rate than chains, you may also find the quality and diversity of the restaurants which survive to be lacking.
Of the 22,000 restaurants which closed since the start of the pandemic, the overwhelming majority were small businesses with fewer than five locations, according to data reported by The Wall Street Journal. While some 50,000 restaurants close every year as part of the natural ebb and flow of the industry, the National Restaurant Association predicts that number will double this year. (Related: 15 Classic American Desserts That Deserve a Comeback.)
Indeed, many of us have witnessed beloved local haunts go out of business. From small-town icons which reared generations of residents like Ritz Barbecue in Allentown, Pennsylvania, and Cafe Texan in Huntsville, Texas, to nationally renowned Gotham Bar & Grill in New York, independent restaurants have struggled no matter how their rich legacy.
While the pandemic hasn't been kind to chains like Ruby Tuesday either, these restaurants are better positioned to weather sudden shifts in consumer behavior and live to tell the tale. With reliable financial backing as a key advantage, some chains have even expanded their businesses by capitalizing on vacated real estate in prime locations and attracting new consumers with convenient options amid the backdrop of the pandemic.
Chipotle recently opened its 100th Chipotlane, an innovative drive-thru with digital ordering capabilities. That number represents enormous growth for the chain, which had 10 drive-thru locations in the U.S. in early 2019. Pizza giants Domino's and Papa John's will both open new locations after reporting growing sales this year. With lunch and dinner traffic bouncing back, McDonald's recently unveiled its best September sales in a decade. (But it's still working to close the competitive gap at breakfast.)
Beyond the drive-thru, chains found growth opportunities in virtual brands, which are restaurants with kitchens but without dining rooms that exist solely as online delivery options. Despite struggles at its brick-and-mortar locations, Chuck E. Cheese grew its virtual restaurant Pasqually's. Applebee's, Chili's, and Smokey Bones all launched virtual wing brands as wings became the new go-to comfort food of 2020.
Due to a lack of funding, less leverage on lease terms, and the tendency for a heavier reliance on dine-in sales over delivery, independent restaurants don't have the same flexibility in grappling with the pandemic. While independent restaurants will eventually come back, we're looking at a long, long road to recovery that winds through several fast-food pit stops, according to Restaurant Business.
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