Dining has changed substantially over the last year. Most restaurants have pivoted their operations in one way or another. Contactless ordering, curbside pickup, and meal delivery are now permanent elements of the restaurant industry’s future. However, eating together has long been a part of our social construct; restaurants breathe life and culture into communities. And where you place your restaurant’s roots can be critical to how you operate.
Urban and suburban areas traditionally have different dining experiences, but the shift in consumer behavior has opened a new world of exciting opportunities. We’ll look at the changing landscape and explore what you need to know about each market before setting up shop.
The suburbs are changing
Suburbia has long been an oasis for people wanting a slower-paced environment away from the hustle and bustle of city life. It’s often associated with strip malls, manicured lawns, subdivisions, and throngs of families headed to soccer practice. The suburbs aren’t usually the first place that comes to mind for destination eateries or a swinging nightlife. But they are known for having consistent, established chain restaurants and family operations.
The pandemic forced restaurants everywhere with dine-in-style eating to pivot quickly and provide delivery services where few existed before. Reduced revenue took its toll on establishments that couldn’t keep up. But some of that is starting to change with a new focus on bringing trendy restaurants to suburbia.
A growing suburban appeal
Office buildings returning to 100% capacity likely won’t happen anytime soon. Work from home is here to stay. And because commuting is less prevalent, foot traffic to downtown restaurants has stalled, and bedroom communities (where people primarily sleep and commute to another city or town to work) are quickly becoming the new hot spot for hip restaurants to take up shop.
The appetite for more destination restaurants in the suburbs is growing; establishments are banking on the work-from-home crowd looking for flexible food options in their workday and suburbanite families desiring the taste and convenience of chef-prepared dinners. A growing health-conscious niche in suburban areas are also gaining the attention of plant-based and health-focused eateries.
Modernizing the layout in suburban eateries
Restaurants taking root in these areas (often the land of large supper clubs) won’t have the same footprint as those that came before them. Delivery and curbside orders are still in demand, and eateries plan on keeping their dine-in areas small, with a spotlight on outdoor areas upgrading to create a destination feel and entertainment vibe.
Some restaurants are opting for large, long drive-through areas where customers can still enjoy the experience of seeing their food prepared.
A smaller eating area will focus on optimizing all available space, and many restaurants are opting for cross-functional floor designs in the kitchen and dining areas. The added flexibility provides opportunities to shift wherever the need presents. For example, a restaurant with an increase in pick-up meals can have the fluidity to organize space for to-go meal prep, or eateries can easily turn a weekday sit-down dinner space into a Sunday brunch buffet or a small Friday-night live music set.
Diversifying where restaurants typically live is also a trend. Look for more grocery stores, big-box operations or other non-traditional areas to embrace slimmed-down restaurants with ready-to-go food that’s available for pickup.
Urban life is shifting
The city (and all its excitement) brings people from all areas and walks of life. Restaurants that live here influence the dynamic of their neighborhoods, and many eateries are a draw for city dwellers and tourists alike. Urban establishments traditionally accommodated the long lunch rush of those that work in the city or frequent business dinners. And the nightlife is synonymous with city eateries and clubs.
But shallow pockets of some independent restaurants couldn’t sustain the weeks and months of limited dining, and sadly, over 110,000 businesses closed up shop in the last year. Fortunately, that’s not the case for every establishment, and those that white-knuckled the last year and stayed afloat are looking at ways to increase their presence and revenue.
Available and reasonable real estate
The shuttering of businesses has caused city real estate to struggle. Landlords that were once sticklers on the high price of rent are softening prices or working with businesses to find a balance. Empty spaces don’t bring in any cash flow and some landlords are considering striking up more of a partnership, allowing lower monthly rent and requiring a percentage of the profits in exchange (if you succeed, they succeed). Lower prices and availability are opening up prime locations that might never have been an option for the average establishment before.
Delivery radius is expanding
Along with increasing digital capabilities such as online ordering, city restaurants are upping the miles they’re willing to travel; many deliveries are taking on the longer commute and heading out to the suburbs. High-end places (once impossible to get into) are bringing their menu to the doors of those who might never have the opportunity otherwise.
Some urban restaurants are joining forces and establishing suburban pickup hubs through new delivery platforms. One app in Chicago charges customers a $5 fee to place an order from participating urban restaurants. If the minimum threshold of meals is sold, a driver collects the food from each establishment and brings it to a set drop-off location (usually delivered cold and ready to re-heat). The setup has helped city eateries keep a steady stream of business while satisfying suburban dwellers' food cravings.
Downtown restaurant evolutions
The space available in most urban areas is limited; small footprints and cross-functional floor spaces aren’t just a new trend for suburban establishments. Urban eateries that optimize both dine-in and kitchen space bring the added benefit of flexibility to grow and shift with changing business and consumer needs. Cities will see more ghost kitchens pop up with delivery and pickup in mind. And more urban restaurants will have streamlined and vessel restaurants that offer to-go food in non-traditional areas such as grocery stores, parking garages and other convenient locations.
Shifting toward new opportunities.
Changes in market trends can reveal incredible opportunities if you’re willing to meld and bend in new and exciting directions. The restaurant industry is continually evolving, and flexibility can be a key to staying successful. Shifting store locations, operating procedures, or restaurant models can modernize your business and increase your revenue stream. Learn more about how to turn market trends into opportunities on our blog.
