December 11, 2017
Focus on Food & Drink

Restaurants respond to time, cost pressures as lunch crowd shrinks

Lunch patrons at Bertucci's in Framingham. Northborough-based Bertucci's has developed new specials to entice the business lunch crowd, such as a guarantee food will be ready quickly.

More than ever before, Christine Griffin brings lunch from home to her job as a paralegal at the Worcester law firm Bowditch & Dewey.

"When I'm trying to tighten up my budget, that's the first that goes," Griffin, a Bowditch employee for more than 20 years, said of dining out for lunch.

Other workers are in the same situation, and so many are pressed for time during their work day that last year, people took 433 million fewer trips to restaurants than in the prior year, according to the New York-based market research firm NPD Group. That 2-percent decline led to an estimated $3.2 billion in lost sales.

It isn't only people are crunched for time during the work day. More people than ever aren't out at the office at all.

The rate of people who work primarily from home rose to 24 percent in 2015, up from 21 percent in 2011, according to the U.S. Bureau of Labor Statistics. Others work flexible schedules, meaning they're not necessarily looking to head out of the office around noon to eat.

From a financial standpoint, grocery prices rose only by 0.4 percent in a 12-month period ending in September, while food bought at dining establishments rose by 2.4 percent, BLS said.

Those trends have been felt across the country, including downtown Worcester. Deadhorse hill, an upscale restaurant on Main Street opened in 2016, thought it would have a steady lunch traffic thanks to nearby offices.

"Coffee and lunch has not been the slam dunk we thought it would," said deadhorse Co-owner Jared Forman.

The shrinking amount of time the business crowd has for lunch has led to a rise in technology-enabled services, designed to make buying food from restaurants faster and easier.

The restaurant expected dinner to be struggling once workers went home, but instead, Forman added, "We have found dinner to be booming."

Providing the right value

Lunch is not a reliable source of revenue for Worcester restaurant firm Niche Hospitality Group, which owns Mezcal Tequila Cantina, The Fix Burger Bar, Railers Sports Tavern and four others.

"Lunch is hit or miss," said Niche Owner Michael Covino. "I'd say it's more of a decline than an incline."

Costs for restaurants are always increasing, Covino said, forcing owners to find the right balance among costs, quality food and competitive prices.

"But people don't really want to pay more for lunch," he said. "That's a challenge for restaurateurs to find where that right price point is."

"If you're doing a good job," Covino added, "then people don't say, 'You're expensive,' they say, 'You're worth it.'"

Making it a quick meal

At Northborough-based Bertucci's, a new program gives patrons a free meal if they order off the lunch menu and don't get their food within 15 minutes. Bertucci's is serious enough about the initiative a server even puts a stopwatch on the table for guests.

"They saw it almost as part of a game," Bertucci's CEO Brian Wright said of guests of the pilot program in the Philadelphia area. In a test, one group of businesspeople was happy to have a delayed – and free – meal, and returned two days later, he said.

The program will roll out in Greater Boston starting in December.

Wright, who joined Bertucci's in mid-2016 after stint as an executive at Boston-based Au Bon Pain, said full-service restaurants need to match their fast-casual counterparts like Panera Bread or Chipotle Mexican Grill on price, quality and speed.

"I just knew we had to do something different," Wright said.

In addition to the Express Lunch rollout, Bertucci's has simplified its order-by-app process and before the end of the year will start a new app where customers get a four-digit code upon entering a restaurant. That patron can give that code to a server, and not have to wait for a check at the end of the meal. The bill is connected to a credit card through the app.

Boston-based Uno Pizzeria & Grill has put more of an emphasis on its take-out business, which has become the fastest growing part of its business, Chief Marketing Officer Skip Weldon said. Sales are increasingly coming from an online ordering system, too.

"Everybody is trying to find out ways to make it really easy for the consumer," Weldon said.

Rise of delivery

Industry publication QSR Magazine called 2016 the worst year for restaurants since the Great Recession, with a 1.1-percent drop in same-store sales.

DineEquity, the owner of Applebee's and IHOP, saw sales drop from $713 million in 2012 to $502 million last year, a fall of nearly one-third. The chain closed 46 Applebee's on what it says was a sustained decline in sales.

Darden Restaurants, the owner of Olive Garden, LongHorn Steakhouse and others, said in its 2016 annual report it expected increased competition from prepared meals in supermarkets.

Rushed diners have given a boost to online delivery service providers like DoorDash, GrubHub and UberEats.

Non-pizza delivery purchases have risen by 30 percent in the past four years, according to NPD. The firm Morgan Stanley said in July it expects today's $30-billion online food delivery market to hit $220 billion by 2020 – what would mark a more than sevenfold increase in just a few years.

More than 50 percent of delivery meals are now ordered online, Morgan Stanley reported from its survey.


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