Ever mourned the closure of a beloved cafe or been surprised to find your childhood ice cream parlor replaced by a chain? Mom-and-pop business owners—but especially restaurateurs, who create a sense of community by providing spaces for people to come together and break bread—are the heart and soul of any neighborhood. But in a landscape where profit margins are slim, takeout and delivery are on the rise, and restaurants are subject to the whims of capricious Yelp reviewers, local restaurants have a host of new (and old) challenges to navigate.
According to a recent census from The NPD Group, the number of local restaurants in the U.S. dropped three percent in 2017, while the number of restaurant chains remained stable. “Now more than ever, it’s important to support local eateries and independent operators,” says David Kuo, chef, and owner of Taiwanese restaurant Little Fatty. “They’re your neighbors operating a small business and chasing their dreams, as well as supporting their families and those of their employees.”
Here we ask local restaurant owners what makes them stand out from chain restaurants, the unique challenges they face and what you can do to ensure your neighborhood eatery continues to thrive.
The Upside of Local Restaurants
While there’s no denying a Chipotle burrito or warm bowl of mac n’ cheese from Noodles & Co. can occasionally hit the spot, local restaurants deliberately avoid a one-size fits all menu instead catering to the local community’s tastes and sensibilities. “Many corporate chains will make decisions based on committee-think or focus groups and are inherently averse to taking risks. Local restaurants are your best source for truly innovative and new experiences,” explains Kelly Kim, the chef and co-founder of Yellow Fever.
What’s more, they often put health, community, and sustainability at the forefront of their business models.
“As local restaurant owners, we like to think we’re doing our best to be ethical and sustainable in our sourcing practices,” says Eric Cho, a partner at Palms-favorite Phorage.
“We also take pride in providing our employees with wages that enable them to live better lives than they would working for a huge corporate owner who doesn’t take into consideration the individual circumstances of every employee.”
New Challenges Ahead
In order to be a more conscious restaurant-goer, it’s important to understand the shifting forces that are affecting local restaurants’ bottom lines.
1. Slim Profit Margins and Talent Scarcity
The unemployment rate in the U.S. has reached record lows (4.0% in June 2018) and that means fierce competition for talent among restaurants large and small. While restaurant groups have large Human Resource departments to help source and recruit talent as well as robust benefit packages, local restaurants typically rely on word of mouth, social media or local job postings to fill positions that become available. This coupled with rising wages (18 states raised their minimum wage at the start of 2018) and high rents means an industry notorious for its slim profit margins is being squeezed even tighter.
2. The Rise of Takeout and Delivery
The ease of coming home after a long day at work, browsing through your favorite restaurant’s menu online, and ordering food directly to the door with just a few clicks is undeniable. And it’s changing the way restaurants interact with diners. For some, like Texan eats restaurant HomeState, takeout orders have now surpassed in-house orders. “Over 50% of our orders come in via phone or online,” says owner Briana Valdez. “Our business has grown beyond its 900-square-foot capacity year over year.”
The explosion of third-party delivery services is a double-edged sword for local restaurants. On the one hand, restaurateurs say they’ve allowed them to reach new audiences and increase the volume of diners they serve on any given night. On the other, a large percentage of profit from each order often ends up going to the delivery platform, rather than the restaurant itself.
3. The Amplified Impact of Customer Reviews
Online restaurant reviews and ratings have the ability to put your favorite hidden gem on the map. According to an infographic from Modern Restaurant Management, 72% of consumers say positive reviews make them trust a local business more and a study by Michael Luna at Harvard Business School found that a one-star increase in Yelp rating leads to a 5-9 percent increase in revenue. But the effects go both ways: While a nationally recognized chain can rely on strong brand recognition to help weather a few bad reviews, local restaurants have no such safety net. With smaller marketing budgets than chains, local restaurants must master their online presence if they want their reputation to expand outside of their neighborhood.
How You Can Support the Local Restaurants You Love
The good news: we can vote with our wallets (and our social media accounts) to ensure our local food scene thrives. Here are three ways to support the local restaurants you love:
1. Think of them as part of the community
Tanner Wildason of SunLife Organics encourages customers to buy and eat local. “Order for pickup and make a connection with the people behind your food,” recommends Wildason. “If you live nearby, say hi and see what we’re up to,” says Darren Sayphraraj, chef and founder of We Have Noodles. “We have the flexibility of a small, chef-driven shop so things change. Don’t be mad if the dish that you had last time is not on the menu; trust that what replaced it is also good or try something new!”
2. Be conscientious about how you engage with takeout and delivery apps
While it may seem harmless or even helpful to place orders through popular online delivery apps such as UberEats, they often take 30 percent to 40 percent of every order from the restaurant in addition to a $5 delivery fee. Next time you’re craving delivery, call your favorite local spot directly and ask where they prefer you to place your order from. In general, it’s always a good rule of thumb to place orders through a restaurant’s website.
3. Be generous with your online reviews and recommendations
“Share your favorite local restaurants and eateries with loved ones,” says Sayphraraj. Melissa Rosen, Co-founder and CEO of Locali, agrees, saying, “Early on in our business and to this day, customers tell me, ‘Locali is my little secret’ or ‘I hope you don’t get too busy now that you’re expanding.’ If you love an local restaurant, visit it regularly, take pictures of your food and tag it in posts, and bring your friends and family to eat. We have the most amazing regulars and I love when I overhear them acting as brand ambassadors.”
After all, local restaurants are working overtime to contribute so much more than just delicious, thoughtfully prepared food to their neighborhoods. “There is a relationship of accountability and transparency that exists between an local restaurant and the community it serves,” says Rosen. “In a time where civility is increasingly lacking, local restaurants provide and require an added level of respect in terms of communication in order to stay in business—hopefully!”
Itching to support a local restaurant near you? Order now! Want to learn about a restaurant sourcing ingredients straight from Italy? Read this post about Pizza Romana and their extraordinary effort behind the scenes.