Restaurant Dining Space Shrinking as Delivery Sales Soar

restaurant-space

Research firm Cowen and Co. predicts that U.S. restaurant delivery sales will rise an average of 12 percent a year to $76 billion in the next four years. What’s more, besides the delivery segment, no growth is forecasted across the restaurant industry. This means that restaurants, and chains in particular, need to quickly react to these user trends and step up their delivery efforts. In order to accommodate this new demand for deliveries, restaurants are rethinking the way they use their space, in many cases shifting the ratio of dine-in space versus kitchen and pick-up areas.

For example, McDonalds, the world’s largest fast-food chain, recently announced plans for a $6 billion makeover of its U.S. restaurants. Besides new furniture and decor, the renovation is planning to install digital kiosks for ordering, customizing and paying for meals. In addition, restaurants will designate parking spots for customers who order food through the company’s mobile app.

Eating in is the new dining out. Convenience and technology are playing a key role in this cultural shift. According to market-data firm AppAnnie, the number of food delivery app downloads is up 380 percent compared to three years ago. This surge in orders is making restaurants rethink and redesign their spaces.

On the one side of the spectrum, there are the ‘so-called’ Dark Kitchens or ghost restaurants, which are purposely built for deliveries. These satellite kitchens do away with the traditional storefront as they are designed solely to fulfill delivery orders with all the tools, ingredients and personnel required to create the same food as in a ‘real’ restaurant. However, large restaurant chains with hundreds or thousands of locations are also beginning to revise their spaces in order to focus on managing deliveries.

Speaking to Bloomberg, David Orkin, who runs the U.S. restaurant division of real estate advisory firm CBRE, said restaurants are adjusting to fewer visitors. He confirmed there is an overall downsizing of restaurant seating space as chains experience less foot traffic and more online and mobile-ordered pickups. For example. big brands such as Outback, Carrabba’s and Buffalo Wild Wings are currently looking to negotiate restaurant leases and renovations.

There are many ways to optimize spaces. Recently, Bringg’s Head of Product Solutions shared some advice for restaurants chains adding deliveries to their operation. She emphasized how important it is to create an efficient pick up area in order to make deliveries work. This critical space needs to be well-designed so that it does not interfere with the work performed by the kitchen or counter staff.

As dining preferences change and restaurants adapt their physical locations to this new reality, we look forward to seeing more innovation regarding kitchens and designated delivery areas. With the dining experience moving to people’s homes, the best customer experience can only be achieved by creating more agile and efficient operations within the restaurant branches – built to orchestrate fast and seamless deliveries.

 

 

 

Lior Sion

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