How Do Breakfast & Lunch Places Stay in Business?
It might seem strange that a restaurant would choose to abandon the evening market entirely, but specializing in breakfast and lunch service can be a profitable niche business. The low cost of popular menu ingredients and high turnover of tables can be a recipe for success, particularly in areas that clear out before nightfall.
The simple answer to how breakfast and lunch places stay in business is because they are able to turn a profit doing so. Breakfast accounted for nearly 60 percent of the restaurant industry’s growth between 2005 and 2010, according to a study from the NPD group. Over that same period, lunch service increased by 2 percent while dinner service declined by the same amount. In addition, food costs for breakfast staples like eggs, potatoes, oatmeal and flour are relatively low, allowing restaurants to maintain low prices or increase the usual profits on food costs.
A restaurant serving just breakfast and lunch might thrive in a location where that’s when the population wants to eat. In office districts, for example, the population often clears out at the end of the workday as everyone heads home to the suburbs or to the residential areas of the city. There may not be enough people lingering to support a dinner service, but there are plenty of workers in the mornings and early afternoon hours that need to eat.
Another way breakfast and lunch places stay in business is through marketing. Advertising unique breakfast offerings or specialty sandwiches can help lure customers and help differentiate a smaller business from its larger rivals in the quick service restaurant industry. The growing market for breakfast has businesses both large and small becoming increasingly conscious of the foods and marketing techniques that win that business. Marketing is increasingly important in survival of smaller venues as more competitors are looking to enter the market or expand their breakfast offerings. However, because changing consumer habits is difficult, once a restaurant becomes part of a customer's routine there is a better chance that the business will be consistent.
Particularly at casual restaurants, breakfast and lunch services tend to have tables that turn over quickly. Though profit on a $5.99 breakfast special might not be tremendous, it all adds up if a table turns multiple times an hour or if customers grab their food to go. Serving office workers who have to get back to their desk or vacationers looking to eat as quickly as possible before hitting the beach means not having to worry about folks lingering over a fifth cup of coffee. If you don't encourage people to linger -- no free WiFi, for example, and louder music instead of classical tones -- they may leave fast enough to create the volume a restaurant with limited hours needs to thrive.