The Great Kitchen Shrink Continues

How the Off-Premises Boom Has Changed the Game

In the summer of 2018, a hot topic in the industry was the growing number of operators who were moving to downsize their kitchens. The intent was all about trading costly kitchen space for more front-of-the-house, revenue-generating tables.

Well, needless to say, the dine-in demand has changed rather suddenly and dramatically since 2018.

Now, kitchens are still shrinking, but in different ways and for different reasons. It’s a trend that’s taken a left turn into the drive-through lane and is more telling of what appears to be a larger transformation in the industry.

Coming Soon: The Shrinking Restaurant

Mainstream brands that make up the landscape of QSRs and fast-casuals are downsizing not just the kitchen, but the entire restaurant.

As the pandemic accelerated consumers’ migration to off-premises dining, seating has become less important for these restaurant models built on speed and convenience.

If they’re not already running delivery-only ghost kitchens out of a converted cargo container in some urban center, they’re?unveiling new building design prototypes that sacrifice kitchen AND seating space?for multiple drive-thru lanes, curbside pickup, walk-up kiosk ordering and throwback parking-lot dining.

Also Coming Soon: The Dine-In Dilemma

For the more upscale casual and other dine-in-experience restaurants, a shrinking kitchen is the product of 2020’s shutdown scare.

These operators dedicated kitchen space to virtual brands for survival and now that dine-in demand is storming back, they’re faced with a decision to keep the additional off-premises revenue streams going or return their focus to the customer at the table.

In any case, the challenges that come with a shrinking kitchen remain, even if they’ve evolved enough to demand a review.

Restaurant Service Is Still the Big Challenge

In the original blog, the risk was brand erosion. It was about putting too much stress on the kitchen—particularly with the rise, even at that time, in digital ordering and takeout—such that wait times for orders would start to expand.

Today, digital technology is more deeply integrated into the restaurant marketplace than ever before. And it’s still evolving at a rapid pace. But is it making it easier to?deliver a great customer experience?

This recent?insight from Restaurant Dive?begs the question:?

????A report from Oracle?finds that increased off-premises business at restaurants is impacting customer expectations for speed of service. Over 20% of restaurant customers are annoyed after waiting two minutes to order at the drive-thru window, which jumps to 70% of customers if the wait is five minutes to order.

????Further, 47% of respondents said they feel like delivery and takeout orders have resulted in longer waits when they're ordering in person, while 38% of consumers believe dine-in business is less of a priority than digital orders.

For the speed-and-convenience operations going all in on digital and off-premises, streamlining those digital service providers as much as possible is key to providing more efficient service.

For the dining-experience restaurants, creating a clear operational distinction between dine-in and delivery service—perhaps, even establishing a separate venue for delivery only—is critical. If the labor crunch makes this difficult, it might be time to make that hard decision to drop either the on- or off-premises business.

Keeping the Menu Fresh Is More Important Than Ever

In 2018, the menu was shrinking too, in part because the smaller kitchen put the squeeze on storage. But the tighter menu has continued to be the order of the day in the face of rising food and inventory costs, labor turnover that has to keep the menu simple and, again, the explosion of takeout and delivery.

Today, it’s even more challenging. Because that same consumer who doesn’t want to wait five minutes at the drive-thru also has a shorter attention span for taste preferences.

Thriving in this new era takes more menu evolution, which still demands equipment that can fit the space, versatility and durability requirements inherent in a leaner kitchen.

But, for those making a bigger commitment to off-premises dining, it demands?a smarter strategy to optimize delivery food quality.

And, for all segments, the new era also has upped the stakes on limited-time offers. In a smaller kitchen operation, this makes LTO development more challenging because restaurants have to wow their customers without operational extravagance.

Finding partners with experience in LTO development becomes imperative and operators must find their sweet spot for innovation frequency and investment. It is possible to get over-extended on projects and, even for fickle customers, it’s also possible to overwhelm your market with too many test items.