Like forests that regenerate after fires, the recession-scorched restaurant landscape will fill in with new growth.
Like forests that regenerate after fires, the recession-scorched restaurant landscape will fill in with new growth. The approximate 4,000 restaurants that have shuttered this past year (NPD Group) will be replaced, and possibly exceeded in numbers, by a new wave of restaurateurs.
Call them the next generation of restaurant entrepreneurs. For the most part, they’ll be small independents, resourceful, mature and weathered by tough economic experiences that cost them their jobs and career paths. Many will be former employees of closed restaurants, who have the perfect skill sets and operational know-how to step up and place their names on the front doors of new eateries. Others will be displaced executives with strong work ethics who now populate the classrooms of culinary schools—and are learning the harsh difference between cooking for cousins and preparing meals that consistently appeal to paying customers.
They’ll be betting on themselves, rather than on any potential employer, as they serve up what they know best—family recipes, ethnic wonders, cuisines they’ve learned about in their prior restaurant work, and more. They will provide a growth floor rich in ideas, menus and values that will resonate with core American families who are like them in many ways—stunned by the weakness of current economic prospects, holding onto their money, and eating out far less than before the nation’s economic turmoil.
Restaurant industry traffic experienced its steepest decline in 28 years, down 3%, in the quarter ended May 2009, reported NPD Group’s CREST service. Quick-service slid 2%, casual dining 4%, midscale 6%, fine dining/upscale hotel in the double digits. Moreover, onsite (businesses, colleges, hospitals, etc.) fell by 9% in the quarter ended June.
Each restaurant closure today releases one or more prospective new restaurant owners with the right stuff to succeed, and strong survival streaks rather than star struck dreams of becoming television celebrity chefs. Consumers may be entertained by celebrity, but day in and day out, they wonder if they can afford to support celebrity. They’ll be attracted instead to the next wave of restaurants opened by people from their hometowns.
Since many restaurant closures today leave behind sites with great kitchens that can be rented cheaply, our SupermarketGuru.com vision is not only feasible, but also probable. Toss in the liquor licenses that many have, and two key assets are already in place.
Soon, we believe, the new concepts introduced will ring authentic with consumers and turn traffic back up. This will literally be growth from the ground floor, enriched by the personalities and experiences of new restaurant owners who are simply survivors. As at Cheers, soon everyone will know their names.
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