Why Retail in Restaurants is Here to Stay

Why Retail in Restaurants is Here to Stay
Data from our Future of Restaurants Report indicate that incorporating retail into restaurant operations is a trend that’s here to stay. We look at what this means for restaurateurs.
by Square Nov 02, 2022 — 4 min read
Why Retail in Restaurants is Here to Stay

If you run a restaurant in Australia, you’ve had to demonstrate incredible resilience over the past two years. The global pandemic combined with sluggish economic growth has massively curtailed normal operations, and necessitated a combination of shrewd planning and creative thinking. With fewer diners coming through their doors, restaurant owners have adapted their operations to include an omnichannel approach to selling food.

Backed by inventive technologies, restaurateurs have evolved their offerings to suit the changing needs of their clientele. With fewer people passing through their doors, you have brought your offering to the people. You may have already started offering takeaway and delivery services, and partnering with third-party delivery platforms, but have you thought about supplementing your existing operations with retail products?

Data from our Future of Restaurants Report found that retail in restaurants is no longer a novelty. It’s something that Australian consumers are actively clamouring for. Join us as we explore why retail in restaurants is here to stay, and how it can benefit your business.


What does retail in restaurants look like?

Restaurant retail is one example of how forward-thinking restaurateurs have diversified their offering in order to appeal to the changing needs of their market. The pandemic forced the service industry as a whole into new operational territory, as they scrambled to engage customers with whom they could no longer share a physical space.

Restaurant retail provides consumers with a way to replicate the restaurant experience in their own homes by offering take-home products such as meal kits, bottled beers and cocktails, limited edition restaurant merch and other restaurant items to help them engage with the brand and enjoy the food and drinks that they love at home.

Flah forward to 2022, restaurants may have reopened their doors, but data from our Future of Restaurants Report shows that restaurant retail could be a mainstay within the service industry. Our findings indicate that restaurant retail will still play a substantial role in the post-COVID landscape as business owners adapt their offerings to suit the ‘new normal’ landscape.

More than a third of Australian consumers surveyed (37%) have bought retail items from a local restaurant over the last 12 months. Furthermore, 17% had purchased such items more than twice over the past two years.

“The writing is on the wall a retail revenue stream within restaurants is the future. Offering a product to sell alongside a restaurant service is scalable and can help restaurants reach a far broader audience.” – Michael Bascetta, CEO of Worksmith and owner of Made Well Group

How can selling retail items help grow your business?

As a restaurant owner, selling retail items may seem like a huge change of pace. Furthermore, it may require an operational diversion that’s outside of your comfort zone. Aside from taking the time to create compelling retail offerings that reflect the quality of your brand, you may also have to create relationships with new suppliers.

Nonetheless, they say that life begins outside your comfort zone. And selling retail items may provide you with new opportunities to help you grow your business.

Here’s how:

Creating complimentary revenue streams

Offering retail items like meal kits on a subscription basis provides your restaurant with additional revenue streams to supplement your restaurant’s earnings.

Recession-proof your operations

The Australian economy has had a shaky few years, and experts predict a coming recession on the horizon. During economically tough times, consumers tend to tighten their belts and either reduce or forego luxuries like dining out. Offering an authentic dining experience at a low cost via meal kits enables your customers to enjoy your offering at a more affordable price point, while also mitigating your losses.

Encourage repeat business

Retail offerings provide more opportunities for you to engage with your target audience and encourage repeat customers. Providing customers with high-quality retail items that offer excellent value for money encourages positive associations with your brand and increases their likelihood of both visiting your restaurant and potentially ordering more products.

Meal kits and other restaurant retail items can also be used in conjunction with exclusive discount codes and vouchers. As well as providing a ‘thank you’ that helps customers feel valued, it incentivises them to return to your restaurant more frequently.

Turn loyal customers into brand advocates

Your customers love what you do. Offering them the chance to buy limited-edition merchandise may provide them with an opportunity to literally wear that love on their sleeve. By wearing and using your branded merchandise, they are acting as brand advocates, introducing your restaurant’s name and logo to new prospective customers.

Why is the omnichannel approach to retail in restaurants important?

Many restaurants offer retail items on the premises. However, an omnichannel approach that incorporates e-commerce can help make your retail offerings much more accessible to consumers.

One of our key findings was that omnichannel will become the new standard for Aussie restaurants. The pandemic has accelerated an existing trend whereby restaurants cater to their target markets outside of in-house dining and retail. Incorporating an e-commerce channel into your mix is beneficial to your business in a number of ways. It engages a broader audience than being reliant on passing foot traffic. It gives diners and prospective customers more opportunities to engage with your brand. It helps to drive more traffic to your brand, thereby improving your SEO by showing search engines that your website is of value to users.

Combined with the right point of sale system, an omnichannel approach to restaurant retail can be seamlessly integrated into your existing operations and revenue streams.

How Square can help

Square offers a host of features to help run your restaurant, from seamlessly managing online and in-house orders to integrations with food delivery platforms. However, it is also designed with retail in mind, enabling you to manage your inventory, coordinate online and in-house sales, and build customer relationships.

If you’re thinking of incorporating restaurant retail into your business, Square empowers you to do so as frictionlessly as possible.

For our first Future of Restaurants report, we worked with YouGov Research to survey 500 restaurateurs and 1,000 diners across Australia to see what they think the future holds for the service industry.

The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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