If you look at the retail sector, you probably won’t think that it’s slowly dying. After all, people are still buying clothes, footwear, homeware, and many other goods. But, if you look closer, you’ll see that the retail industry is actually on a downward spiral. Restaurant experts are preparing for this turn to online shopping, as many restaurants are located in these retail sectors.
This is particularly true for brick-and-mortar retail shops. Online stores generally have decent sales as more and more people decide to buy what they need through the web. And you can’t really blame them: with today’s technology, online shopping has become a quick and effective way to fill your cupboards and cabinets and enjoy some retail therapy — without having to deal with traffic, hordes of other shoppers, and other issues that real-life shopping brings.
Still, the rise of online shopping has greatly contributed to the downturn in the retail sector, especially among physical stores. This, in turn, has significant impact on the restaurant industry, which we’ll continue with further.
Less Foot Traffic and Fewer Filled Tables
One of the effects that restaurateurs and restaurant experts can expect to see is fewer customers. Most restaurants nowadays are located in commercial areas in a bid to attract shoppers. And this plan makes sense: shopping for clothes, shoes, and other things can leave people hungry and thirsty, so they choose from one of the restaurants nearby where they can eat, drink, and relax. However, with malls and other retail centers losing foot traffic, many restaurants are also dealing with fewer filled tables and less sales and revenues.
In many cases, it’s not just about foot traffic — it’s also about people not having enough financial capacity. As of 2013, the U.S. retail sector employs around 4.3 million people, but many of them have lost or will lose their jobs as the industry continues its downward spiral. In fact, in February and March 2017, U.S. retailers lost 60,6000 retail jobs, resulting to the sector’s worst two months since the latter part of 2009.
With thousands of people losing their jobs, many families in the country are now dealing with limited funds, which means most of their budget will be more focused on basic needs including rent, groceries, and utilities and less on dining out and other forms of entertainment. This can have a devastating impact on the restaurant industry.
There’s Still Some Good News
Fortunately, all hope is not lost. There’s a trend among consumers, particularly millennials, that promotes spending on experiences instead of buying stuff. “Experiences” can mean different things to different people; some like to travel, while others love to attend concerts. A majority of people, though, agree that dining out with their loved ones counts and exploring new cuisines and dishes both count as positive experiences that they like to enjoy a regular basis. This is definitely good news for restaurants, particularly those that offer foreign cuisines and novel food items.
Final Thoughts
The downturn in the retail sector will undeniably have an impact on the restaurant industry. If you are a landlord, owner or investor in a restaurant and are apprehensive about the coming months and years, it may be time to consult restaurant experts. This way, you’ll get to work with professionals who’ll help you keep your business afloat during the rough times ahead. Or, you can request an initial no-cost consultation with a Perry Group expert to discuss your options and strategies.
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