EATER – Why more restaurants might be staying open on Christmas and New Year’s
The Cracker Barrel Old Country Store is one of the few full-service restaurants open on Thanksgiving in the small town of Harriman, Tennessee (population: 6,261). That’s why Jon Rybka and his parents have occasionally spent the holiday there for the past eight or nine years. “If you don’t want to cook and you want to eat out on Thanksgiving, Cracker Barrel is one of the few choices,” Rybka said.
Cracker Barrel, a southern-themed restaurant chain, wasn’t always the Rybkas’ go-to Thanksgiving spot. When Rybka was a child, he and his parents would venture to Georgia for a traditional dinner with his mom’s family. But once he grew up, the large gatherings, cooking, and traveling became too much of an effort. “I cannot imagine a universe where my mom will want to do the big Thanksgiving meal again,” Rybka said. “The juice is not worth the squeeze for her.”
Restaurants tend to lose money on Thanksgiving, but for all other winter holidays, spending is on the rise.
Rybka and his family aren’t alone. For many people, traveling during the holidays — the busiest days of the year for airlines and roads — is too much of a hassle. Data shows cooking holiday meals might be falling out of fashion with some groups, as more and more people look for alternative dine-out options. But are holiday dinners in restaurants becoming the norm?
If so, Mani Kulasooriya, CEO of CAKE, a Sysco-owned technology company, wants to help more restaurants capitalize on that trend. CAKE specializes in point of sale and guest management technology for independent restaurants, and its latest data pull showed that — despite the growing popularity of alternative holiday dinners — independent restaurants actually lose money on Thanksgiving. New credit and debit card spending data from Bank of America data supports that: While other holiday-related restaurant spending is up, restaurant transactions on Thanksgiving increased by only one percent in 2015 from the year before. That suggests people looking for alternative Thanksgiving meals are still spending the day at home, unless of course there is a Cracker Barrel nearby.
But while Thanksgiving remains an eat-at-home event, more and more people are choosing to dine out during the season’s other holidays. Independent restaurants that stayed open on Christmas and New Year’s Day last year increased profits by 40 to 50 percent compared to average days, according to CAKE data. OpenTable, the restaurant reservation service, found that in 2014 and 2015, restaurants served almost twice as many meals on Christmas Eve and more than three times as many meals on New Year’s Eve, compared to the average day.
Millennials might be driving the growth, according to Bank of America data. Compared to 2014, people between 18 and 34 spent six percent more at restaurants on Christmas Eve in 2015, a larger percent increase than diners in all other age groups (though those percentages went up, as well). Millennials also spent four percent more than the previous year dining out Christmas and New Year’s Eve.
Meanwhile, search interest in “Christmas menus” and “restaurants open on Christmas” have been slowly growing in the last three years, according to Google Trends data.
This gives independent restaurants the chance to meet a growing demand, especially in small towns with few options. The Holtin family, for instance, typically spends Christmas in Texas with a huge gathering of about 15 people and lots of home-cooked food to spare. But last year, 25-year-old Rachel Holtin found herself spending the holiday in her small town of Woodland, Texas, with just her sister and parents. Instead of cooking a huge feast for four people, they ordered Chinese food.
“That was the first year we didn’t do a huge family Christmas,” Holtin said. “The only places really open were Chinese spots.” She said if there were fancier options, she would have preferred to eat there.
“The reason why my parents do it that way is so that we can focus on the people, and not the food.”
If more small, local restaurants paid closer attention to data, more might consider staying open during the holidays, said Kulasooriya, citing CAKE’s data analysis. Many smaller restaurants don’t, and according to Kulasooriya, they may be losing out. “We see a big big gap here,” Kulasooriya said, adding that many smaller eateries struggle with overlooking passion and focusing on data and numbers. “We want to make them think harder about business.”
But there are other things to consider besides profit. “For us to go out means that someone has to work,” Rybka said. Should restaurants take the department store route, staying open during the holidays to maximize profit, possibly keeping workers from spending time with their own families, or lose thousands of dollars? The answer depends, according to Kulasooriya. “The restaurants need to take that data and see how they can apply it that is beneficial to themselves.”
While outsourcing holiday cooking might be a growing trend, the lack of dining options may not even be an issue for some — there are more important things to consider, Rybka said. “The reason why my parents do it that way is so that we can focus on the people, and not the food.”