'Restaurant recession' signals shift in dining habits

It's being called a restaurant recession. One major chain after another shuts down dozens of restaurants across the country.

Diners in the Bay Area will likely notice the latest shakeup. Applebee's and IHop announced they will close more than 160 locations nationwide.

Experts think there are a couple reasons behind chains closing up shop.

First, diners have gravitated, in the last decade, to places that advertise speed and quality, like Panera.

Second, millennials are looking for something different. And they’re getting it. A night out to grab a bite to eat reveals lots of choices.

But while they all look for something different, they also want their restaurant choices to have one thing in common: Local.

Those decisions are hitting a lot of major chain restaurants hard. Before Applebee’s and IHop, Outback, Chili’s, and Bonefish Grill made similar announcements.

Industry experts say the toughest competition for those companies are from what's known as fast casual places like Chipotle and Panera.

 “Something that's more akin to a higher dining experience, but still has that quick, efficient feel of a quick-service restaurant,” Revenue Management Solutions’ Vice President Justin Pridon described.

Pridon’s company is a Tampa-based restaurant consulting company. He says, although some are calling this a restaurant recession, the industry, as a whole, is seeing a revenue uptick. But table-service chains appear to be in some trouble.

“In trouble as in, 'Would they exist in the future?' Absolutely. I don't think that's the kind of trouble you're thinking, that you'd think of. But is there a contraction to that area? Maybe," he explained.

Pridon says millennials have been a driving force behind the shift.

“I think there's a lot of connection that's made between millennials' mindset and that advent of fast casual,” he said. “They're trying new food. It's not the same stuff they grew up on at Chili's, Applebee's, that their parents used to take them to.”

These days, people are also ordering delivery, carry-out or cooking at home more often. Pridon says the millennial generation might just be the beginning.

The generation after that is even more accustomed to using technology, and to having everything delivered, so this is a shift that might be here to stay.