Shake Shack founder and Union Square Hospitality Group chairman Danny Meyer made waves last week by asking “When did a 6:00 dinner reservation become the new 8:00, most prized table of the night— and will it last?"
Source: X.com (formerly Twitter)
Meyer got us thinking about daypart visitation shifts across the restaurant industry. There is no doubt that consumer behavior regarding restaurants has evolved the past few years. We’ve previously looked at changes in daypart visitation trends for Starbucks and other specialty coffee chains due to evolving consumer behavior patterns (partly a byproduct of work-from-home and other hybrid work situations), with more consumers opting out of the morning commute coffee run in lieu of later morning or afternoon visits. However, Meyer’s comments gave us the opportunity to take a deeper dive at daypart trends at full-service restaurant chains.
Our conclusion? Meyer is spot on about a 6:00 PM reservation becoming the most prized table of the night. We looked at visitation trends by hour from June-August 2023 for some of the more prominent fine dining chains in the U.S. (The Capital Grille, Ruth’s Chris Steak House, Cooper’s Hawk, Saltgrass Steak House, Fogo de Chao, and Eddie V’s) and compared it with the same period in 2019. Across the board, our visitation data suggests that fine dining patrons are dining earlier– especially between 4:00-7:00 PM–and coming in less frequently after 8:00 PM.
What’s driving the trend toward earlier visits? Meyer hypothesized three explanations: (1) work-from-home trends contributing to social isolation, which in turn is driving earlier visits; (2) a blurring of work and personal schedules; and (3) a “Netflix effect”, where there is more entertainment content than ever to get home to. We believe Meyer is largely correct in these assessments, but we have a few additional theories.
First, we agree with Meyer that work-from-home has been a major contributor toward the trend of eating earlier, but we believe increased schedule flexibility may also play a part. With office visits at about 65% of the level they were prior to the pandemic according to our August Office Index recap, employees have freed up time on their morning and evening commute, which in turn gives greater flexibility to dine at different times. Migration trends have also likely played a role. Fine dining restaurants skew more toward urban settings, where we initially saw population declines during the pandemic but have since seen an urban residential recovery in New York and other markets driven by younger families (Millennial and Gen Z households). We previously discussed this trend when looking at McDonald’s future whitespace opportunities, but with the increase in younger families in urban residential settings, there might also be increased demand for earlier dining times.
