Neighborhood Restaurants May Save the Industry – Here's Why


Things in the restaurant industry haven't been all that good for the last few years. Diners are spending less. They are eating out less frequently. Worst of all, foot traffic has been declining for at least three years, according to Restaurant Business contributor Jonathan Maze.

Maze made the case in his June 10 (2019) article that the biggest problem for restaurants is what he refers to as the "retail apocalypse." He cites the Red Robin Gourmet Burgers chain as one example. Red Robin has made its living setting up in malls and stand-alone locations on retail strips. As retail shopping has declined, so has their foot traffic.

Experts seem to agree on the fact that online shopping will continue to eat away at foot traffic in the traditional retail sector. If they end up being right, does it spell imminent doom for the restaurant industry? No. Restaurants will prevail one way or another, they just have to adapt. The neighborhood restaurant model could be the key.

Dining in the Neighborhood

Salt Lake City's Taqueria27 Mexican restaurant is an example of a newly emerging neighborhood restaurant model. Taqueria27 actually has multiple locations, but they are neither chain nor franchise. Taqueria27 is a family-owned business limited to the Salt Lake City area. What makes the restaurant unique is the philosophy behind it.

Owners Todd and Kristin Gardiner purposed to create a local, neighborhood restaurant that guests could walk to when they opened their first location. The idea was to give locals access to great Mexican food – and perhaps the best tacos in Salt Lake City – without forcing them to get in the car and drive downtown.

By creating a neighborhood restaurant with the same level of quality you might find in a corporate chain, the Gardiners have given Salt Lake City residents a reason to dine out separate from shopping. Dining at Taqueria27 is an experience all by itself. The restaurants are destinations rather than joints you stop at on your way through.

A Return to Social Dining

This new model of neighborhood restaurants is about more than just family. It is about social dining. Remember the Taqueria27 model: walking to a neighborhood restaurant to get some excellent Mexican food. Walking together as a group is a social experience. So is sitting down and dining.

What many corporate restaurant chains lack is that social component. They say their establishments are great places to meet with family and friends, but get inside and you'll quickly realize that's not the point.

Get In and Out

Restaurants located in busy retail environments are not intended to encourage sitting down for 3 to 4 hours to enjoy good company over a delicious meal. In fact, those restaurants do what they can to get people in and out as quickly as possible. More diners equal more profit.

It is a mentality that almost guarantees that your restaurant will not be a destination. People won't go out just to eat at your restaurant. They may stop by after work or following a couple hours of shopping, but they won't go out just to eat. That explains why downturns in retail sales generally affect restaurant traffic as well.

It's not likely that restaurants will fade away and disappear. People have been running them for centuries. However, the industry will have to change if it hopes to continue doing well. The neighborhood restaurant may be key over the next 5 to 10 years, as long as restaurateurs focus on making their establishments destinations for family and friends, rather than a quick stop as you're passing through.