Eye on Hospitality: Is Lunch Going the Way of the Dinosaur?

Eye on Hospitality: Is Lunch Going the Way of the Dinosaur? https://wahospitality.org/wp-content/uploads/2017/06/Dinosaurlunch0617.jpg

By Paul Schlienz

It’s hard to believe it, but there is increasing evidence that eating out for lunch may be on the way out.

There were 433 million fewer lunchtime trips in 2016. This resulted in approximately $3.2 billion in lost business, according to market-research from the NPD Group Inc. This was the lunch traffic’s lowest level in at least four decades. Although that decline in traffic is only 2 percent less than 2015, this one-year drop is significant in an industry that has long relied on lunch and has had little growth during the past decade.

“I put [restaurant] lunch right up there with fax machines and pay phones,” said Jim Parks, a 55-year-old sales director who once dined out for lunch almost every day but recently found he could no longer fit it into his busy schedule.

So, why is this happening?

In part, this trend has taken hold because many U.S. workers, like Parks, now view leaving their worksite for a lunch as a luxury time won’t allow. Even power brokers are less likely to indulge in the classic “power lunch.”

“Power lunches have gone the way of all flesh,” said Tom Korologos, a veteran Republican operative, in Washington, D.C., and former ambassador to Belgium under President George W. Bush.

Online ordering and delivery services are also important factors in this trend. If you can get food from your favorite restaurant for lunch, many would reason, why leave the premises of your worksite?

While delivery currently accounts for a mere 3 percent of restaurant purchases, in the U.S., it is growing fast. Non-pizza delivery purchases have jumped by 30 percent in since 2013, according to the NPD Group.

And the continuing rise of online shopping means fewer trips to the mall and fewer stops at restaurants for lunch.

Additionally, companies are opening on-premise coffee shops featuring expertly pulled espresso shots that keep employees from stepping out and going to Starbucks or any number of similar outlets. This trend comes on the heels of the premium food service technology companies have offered their workers for decades to entice and encourage them to remain onsite.

Working at home also plays a role in this trend. The number of workers performing at least some of their tasks at home has waxed and waned through the years, but the share of these workers, who are highly unlikely to eat out for lunch, was as low as 19 percent in 2003, but reached a high of 24 percent, in 2015, according to the Bureau of Labor Statistics.

Then there’s the cost factor. A restaurant lunch’s average price of a has spiked 19.5 percent to $7.59 since 2008, as rising labor costs forced owners to raise prices even though the cost of raw ingredients has dropped. Of course, this is another disincentive for eating out.

Nevertheless, most restaurateurs are hardly ready to give up on the idea of lunch. And some restaurants, including some high-profile chains like Texas Roadhouse, are completely eschewing delivery in favor of offering customers that intangible experience of hospitality that they can’t get from ordering from an app or from bringing their lunch to work.

“We are selling hospitality as much as food,” said Scott Colosi, president of Texas Roadhouse.

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