Reversing a decades-long trend, your local diner down the street is now starting to win out over the Cheesecake Factory and Red Lobster. For the first time, independent mom-and-pop restaurants are experiencing faster revenue growth than national chain restaurants. Revenues for mom-and-pop restaurants are expected to grow about five percent through 2020, while national chains are only expected to experience revenue growth of three percent, according to projections from the food industry consulting service Pentallect. Could this be a tipping point in how Americans eat?
“This really seems to be the dawning of the era of the independent,” Darren Tristano, chief insights officer at Chicago-based restaurant research firm Technomic, told Bloomberg. “The independents and small chains are now outperforming. The big chains are now lagging.”
Individual chains are experiencing a lag in sales revenue and growth. Subway — the largest fast food chain nationwide — saw its store count shrink for the first time in its history this year. Noodles & Company and Red Robin Gourmet Burgers Inc. are also shuttering locations. DineEquity — which owns IHOP and Applebee’s — has seen its stock tumble over the course of the last year. Other restaurant groups like Darden Inc., which owns Olive Garden, have seen some consistent growth, but the overall trend sees chains lagging behind independent restaurants.
Here are some reasons why:
Quality Over Quantity
Customers are consistently valuing what goes into their food and consistency of taste over how quickly and cheaply they can eat a meal. Smaller restaurant groups like DineAmic Group, which owns nine restaurants in Chicago, have experienced an uptick in sales over the past several years, according to Bloomberg.
Reliance on Online Reviews
You’re way more likely to write an online review or recommend a great meal to a friend or family member for a mom-and-pop restaurant than for a national chain. Smaller restaurants rely on word of mouth, unlike larger restaurants that consistently spread the word through advertising.
Small Touches That Make a Big Difference
By offering discounts for local sports teams, serving local produce, and including “homey touches” in décor, local restaurants can attract diners looking for a charming neighborhood atmosphere rather than a restaurant that will look exactly the same no matter where they go.
Want some mom-and-pop eats-piration? Check Out the 10 Coziest Restaurants in America.