A June 2023 report by Yelp found that consumers’ discretionary spending is going to restaurants, nightlife, arts, and entertainment over shopping and beauty. Yelp measured consumer demand and dining habits by looking at pages viewed, photos posted, and reviews. They also looked at new business listings and geographic locations.
While other categories witnessed a sharp decline, the rising demand in dining was somewhat surprising in our current environment of higher interest rates and persistent inflation. Even more interesting, in a time when value is thought paramount, dining habits were shifting to fine dining, special nights out, and off-peak dining hours.
Let’s explore the changing consumer sentiment and what it means to restaurants, bars, and entertainment concepts.
The Types of Restaurants on the Rise
When comparing the change in business openings by category from April 2021-March 2022 vs. April 2022-March 2023, pop-ups grew an astounding 105%. I know, incredible. Other establishments to see astonishing growth include ramen restaurants, growing by 45%, noodles a close third with 40%, and tacos and chicken shops tying at 28%.
When measuring consumer interest from October 2022-March 2023 compared to the same time last year, several states saw increasing restaurant consumer interest. Connecticut was at the top of the list, with a 7% increase, particularly in Latin American, Peruvian, and establishments serving tacos. The runner-up, Massachusetts, witnessed 6% growth, highlighting Brazilian, Greek, and diners.
Nightlife, Arts, and Entertainment Show Significant Increases
Entertainment and the arts also saw incredible interest, particularly in West Virginia, Delaware, Iowa, Illinois, and North Carolina. Some venues that experienced the highest demand include wine tasting rooms, virtual reality centers, music venues, and eatertainment.
Eatertainment has been enjoying rising success as the interest in experiences and activities continues to build. These customers enjoy high-quality, unique food and drinks while joining in competitions and games. Some leading venues in this category include Puttshack, Flight Club, Immersive Gamebox, Sandbox VR, and F1 Arcade.
Chicago showed the most significant consumer interest in the arts & entertainment, experiencing a 17% increase compared to a national average of 6%. Speakeasies and comedy clubs also saw some of the greatest increases in consumer interest.
Fine Dining Compared to Low Price Point Restaurants
You may want to sit down for this one. When Yelp compared fine-dining establishments to more affordable options, fine dining came out on top in consumer interest. While surprising in our current economic environment, this finding aligns with other studies that suggest consumers are more likely to reduce their visits instead of choosing less expensive restaurants.
And this changing sentiment, much different than the one seen during the Great Recession, comes down again to the desire for an experience. Today’s customers want to enjoy a unique dining event that can’t be replicated at home, and they’re willing to pay for it.
Yelp’s analysis revealed that consumer interest in lower price-point restaurants decreased by 4% nationwide, with Nevada, Utah, and Oregon seeing the greatest decline. Comparatively, consumer interest in higher-priced restaurants rose by nearly 2%. The study also found that restaurant-goers are making earlier dinner reservations. For instance, diners making reservations at 4 p.m. more than doubled from 2019 to 2023. There is one constant—Saturdays are still the most popular day for dining out.
So, what does this latest analysis reveal? Something the restaurant industry has known for some time, though our current environment had left a few of us uncertain of the trajectory—it’s all about the experience.
Great food is no longer enough for the current generations that make up the majority of diners.
What does it mean to have a restaurant experience?
There was a time when a restaurant experience meant consistently great food, personalized service, and a clean and memorable ambiance. Today’s customers, however, are looking for more. They want an experience they cannot recreate at home, something that leaves them talking to friends about their meal and sharing posts on Instagram.
What are Millennials looking for in a restaurant?
From innovative food and beverages (think fusion cuisine) to authentic aesthetics and eco-friendly practices, Millennials and the newer generations are changing the restaurant landscape. As these generations continue to outpace others, you can expect to see more immersive dining experiences.
What is the dining trend in 2023?
Two of the trends sweeping the country are pop-ups and entertainment concepts. More specifically, competitive socializing in conjunction with global cuisine is the venue quickly gaining traction. At the head of this concept is Adam Breeden, the founder of All Star Lanes, AceBounce, Flight Club, and F1 Arcade. Additionally, along with brothers Steven and Dave Jolliffe of Topgolf fame, they developed Puttshack, a high-tech mini-golf experience. Currently, there are nine in the U.S., and at least 11 are coming soon.
At Emerging Concepts, we partner with the leading social entertainment concepts and restaurants. We use the latest data analysis, geo technology, and more to help them successfully expand across the nation. To learn more about our process or to schedule a consultation, contact Emerging Concepts.