The lesson retailers can teach hospitality

Despite having eaten probably a couple of thousand meals in various restaurants over the years, I can vividly remember a specific dinner with my parents in the mid-1970s, at a Berni Inn in the centre of Doncaster. It’s not that the dishes were particularly memorable – undoubtedly prawn cocktail, steak and chips and Black Forest gateau – it’s more that it might well have been the first proper meal out I’d experienced in a restaurant.

Eating out just wasn’t that much of a thing back then. It really was something of a luxury that was limited to special occasions for the majority of the population. As a family, we were unusual in dining out on Christmas Day and on Easter Sunday, but beyond those religious celebrations, a restaurant visit was a very rare beast indeed.

The eating out landscape at the time was a modest affair, including a chain of 140-plus Berni Inns, which was joined by Beefeater and Brewers’ Fayre. Meanwhile, Wimpy eventually grew to 500 outlets, while Kentucky Fried Chicken hit the UK in 1965, a good decade before McDonald’s, Burger King and Pizza Hut tentatively opened their first outlets here. There was also a rapid expansion of Indian restaurants, along with other “exotic” options, appearing.

Over the intervening years, dining out has moved from being a luxury to almost a birthright for many people. The casual dining category was created to cater for the growing percentage of the country that expected to eat out very frequently and, increasingly, on a whim. It wasn’t even a treat, never mind a luxury. Dining out on autopilot was possible, serviced by an explosion in the number of branded restaurant chains that delivered what was necessary – average food at average prices. 

Matt Snell, former chief executive of casual dining group Gusto Italian, suggests: “Casual dining is fundamentally flawed, certainly in the middle, where prices are going up and covers are going down. The affordable midweek treat, because you can’t be bothered to cook, has almost disappeared.”

Certainly, since covid-19, the scenario has changed dramatically, with prices rising and wages having not kept pace. Chipotle has found customers between the ages of 25 and 35 years old are particularly challenged, according to chief executive Scott Boatwright, who recently cited headwinds like unemployment, increased student loan repayments and slower real wage growth accounting for inflation as hurting that particular group of consumers. “We’re not losing that customer – they’re just coming less often,” he says.

The youngsters are not the only ones squeezed. As many as 49% of people across demographics surveyed before covid-19 stated they were eating out weekly, but this had declined to 38% in 2024, according to CGA by NIQ. This has no doubt dipped even further over the past year, especially as Savanta found 43% of people suffered “bill shock” the last time they ate out versus only 30% back in 2017, when it first undertook the survey.

Taking advantage of this scenario are the delivery firms that continue to push consumers into dining at home, thereby eating into what could well have been dine-out revenue. Add on to this the increased efforts by the supermarkets to pitch their premium ready meals directly up against the alternatives in restaurants, and it paints a very challenging picture. 

Maybe we are experiencing a generational shift in the way people engage with eating out. We have gone beyond the pre-pandemic era of behaviour, when it became a very functional exercise to eat out and little thought went into choosing which casual dining venue to visit.

Let’s not forget that the recent generations – Generation Z and younger – have been the first ones not to have a higher standard of living than the previous generation since records on such things began. Generation Z et al have new thresholds on what they will pay for goods – I baulk at a takeaway sandwich at £8 and a smoothie at £7 but younger diners have no such issue – but even they are now being priced out of the casual dining category and wider eating out market.

It could suggest a return, to some degree, to the days when dining out was more of a treat or even a luxury. However, this might not necessarily translate into less overall spending across the industry, as evidenced by my own habits over the years. These have typically involved dining out less often but in better places, with a focus on choosing venues and occasions that are much more likely to deliver memorable meals and superior overall experiences. 

While many retailers have lost sales to online rivals over recent years, the better performers have been apt to suggest that consumers are not actually bored with going out to the shops, they are bored with going out to boring shops – whatever the price. Hospitality needs to take note.

Glynn Davis, editor, Retail Insider

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.