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Building Lunch and Catering Business in the New Return-to-Office Workplace

Restaurant reservation platform OpenTable reported an increase in weekday lunch bookings in several markets early this year, confirming what many independent operators are reporting anecdotally. Return-to-office workers are driving demand for lunch. This includes grab-and-go fare to be eaten at desks and on-premises old-school business lunches.

OpenTable’s data showed that noontime lunch bookings rose in popularity in New York every month from January 2023 to April 2023. Other markets that showed increased corporate lunch traffic included Atlanta, Chicago, Philadelphia, and Seattle.

No one realizes more than restaurateurs that business lunch traffic dropped precipitously during the pandemic. Downtown office districts became ghost towns. Many companies are now mandating return-to-office policies, but not without pushback from employees who became accustomed to commuting each morning from their beds to their kitchens.

While not at a pre-pandemic level, white-collar workers are returning to company cubicles and offices, although not necessarily by choice. For you it could mean renewed opportunities to boost afternoon traffic and business banquet and catering sales. Bear in mind, however, this market has changed and varies from one city to another.

With hybrid office and work-from-home policies, some independent restaurant operators are reporting upticks in lunch business and corporate catering and banquets. That includes Ayman Kamel, a principal at K5 Hospitality, parent company of three metro Atlanta-area restaruants, New American concepts 5Church Mid-town and 5Church Buckhead and modern Latin concept AltaToro.

Kamel says he is seeing a lot more foot traffic in the downtown area surrounding his restaurants, which he believes comes from office buildings. The increase in pedestrians is leading to better lunch business during temperate days, although "not when the weather is 100 degrees," he adds.

Kamel says Atlanta offices "took a while to return to work," and many continue the hybrid approach. He estimates that offices around his restaurants are presently operating at 60- to 70-percent capacity. While this is an increase from the pandemic low point, overall volume remains down.

"We had to get creative. We had to try to figure out a way to tell people we’re here," Kamal said. Thus, they focus on brand awareness and visibility. If office workers don’t realize they exist or understand that they offer what a meal delivery service does not, they wouldn’t choose 5Church Midtown or AltaToro.

In addition to making the concepts more visible to the returning office workers, Kamal and his team consider the ways the work environment has changed. To win lunch business, the restaurants have to meet the needs of workers here and now.

Whereas office workers of yore may have had a couple of hours to linger over lunch, "They have 30 to 40 minutes," observes Kamal. "You have to deliver fresh food items, in a limited amount of time, cooked from scratch, and the check average can’t be crazy high. It is a tough task, but I’m grateful our team is able to accomplish that."

Whereas office workers of yore may have had a couple of hours to linger over lunch, "They have 30 to 40 minutes," observes Kamal. "You have to deliver fresh food items, in a limited amount of time, cooked from scratch, and the check average can’t be crazy high. It is a tough task, but I’m grateful our team is able to accomplish that."

Kamel is sensitive to price hikes stemming from inflation. He is on a mission to provide affordable quality farm-to-table fare. "We get that most of the middle class doesn’t have the budget to spend $50 on lunch. Most people want to spend between $15 to $25 on lunch," he says, explaining he accepts lower margins on his lunch menu.

Not every operator is so magnanimous, given the challenges of the lunch daypart in the current market. Staffing on-premises lunch is not always easy. Dinner service promises more traffic and tips.

While many operators have dropped lunch shifts altogether. Kamal sees the upside to accommodating the tastes and budgets of office workers to promote his restaurants to folk who are not often downtown, other than to work.

Says Kamal, "lunch feeds into everything else." If a client brings eight people to a business lunch and the group has a great experience, those guests will decide to come back later. Perhaps they will bring a business client to lunch, increasing brand awareness to a new audience. Or they will come for dinner with family and friends, bringing business to a day part that is more profitable.

Cure for the Stir Crazy

Izzy Kharasch, president of Chicago-based consulting company Hospitality Works, Inc. finds that urban operators are not enjoying the return-to-office lunch boom evident in other markets. For him, the bright spot in the current market is the suburban work-from-home crowd. As much as workers fight for the right to get their jobs done at their kitchen desks, they often feel a need to get out of the house midday. And the working lunch provides that opportunity.

"For a while, we were not doing enough business to reopen for lunch, but now most of my suburban [restaurant consulting] clients have reopened for lunch," he says. Since there tend to be fewer dining options in a suburb, operators who fill this niche may pick up several lunchtime regulars.

Kharasch credits the hybrid work model with expanding lunch traffic to the suburbs and reducing demand for business lunch in downtown districts. In downtown Chicago, where he is based, employees tend to be in the office three days a week. These may not be the same three days, either. "Because not everybody is down there at the same time, urban customers are not seeing a big pickup in lunch. It has never come back to the same level where it was before," he says. Kharasch says he is also seeing low levels of lunch traffic in the quick-service market, a budget-sensitive staple of employees who did not have the time for long lunches.

Philadelphia operators have not experienced a boom in lunch business. Olympia Gyro owner Athens Voulgaridis describes his lunch business as "erratic." Pizzeria Salvy owner Marc Vetri mentioned lines out the door on Tuesdays, Wednesdays, and Thursdays – the three days a week when local office employees are required to be in the office. Fridays, when office attendance is not mandatory, are far slower.

While business lunch volume has not returned to pre-pandemic levels, some Philadelphia Center City operators, including McGillin’s Olde Ale House co-owner Christopher Mullins Jr., are finding luck connecting with a new audience: tourists, taking Amtrak for a day trip from New York or Washington, D.C. The tourists spend more money than business traffic, and they are easier to serve, Mullins says. He also notices an uptick in office workers coming in during the late afternoon for happy hour drinks.

Success With Holiday Parties and Banquets

Corporate banquet and catering bookings are returning to 2019 levels. Clients are reserving their dates earlier this year than in the past. Kharasch tells his clients to begin promoting holiday parties in August. Kamal’s concepts began promoting their end-of-year events in July.

Kamal says that 2022 was a record year for private events and corporate business at his metro Atlanta restaurants. "We started to gear up for the holiday season about two months ago. When you are early enough with your menus and packages and marketing material, you get a lot of response," he says.

His venues have at least one competitive advantage: size. In a downtown area where many restaurants have a smaller footprint, 5Church Midtown can accommodate 500 people. 5Church Buckhead and AltaToro can accommodate 250 guests.

Izzy Kharasch, president of Chicago-based consulting company Hospitality Works, Inc. finds that urban operators are not enjoying the return-to-office lunch boom evident in other markets. For him, the bright spot in the current market is the suburban work-from-home crowd. As much as workers fight for the right to get their jobs done at their kitchen desks, they often feel a need to get out of the house midday. And the working lunch provides that opportunity.

Since there are not too many downtown Atlanta venues that can accommodate that many guests, Kamal explains, his restaurants are the obvious choice for larger companies. Those guests tend to book early, so they can get their choice of dates. By getting his promotional materials together early and raising awareness, his team was able to capture interest from the bigger companies looking for an event venue. The corporate party is another opportunity to delight new guests, who may not have experienced the concept before.

Kamal describes the effort that went into developing their event marketing materials. "The chef comes up with amazing food items suitable for the catering or private events, either family style, hors d’oeuvres or plated dinners. We prepare a savvy craft cocktail list and we also do a photoshoot for it," Kamal says.

"We start to put out the campaign to all our potential clients with social media and eblasts." His website attracts 30,000 to 40,000 visitors a week. All these efforts are paying off. As of this writing in September 2023, 5Church Midtown is 60 percent booked and 5Church Buckhead is 40 percent booked for December.

Restaurants that are understaffed should prioritize hiring banquet and events staff, finalizing their menus, and getting a promotional plan together. Just as Kamal gave thought to how the new ways of doing business changed what diners needed from a business lunch, operators should customize their menus, banquet packages, and marketing pitch to meet the needs of corporate clients. One size does not fit all.

Like Kamal, Kharasch is optimistic about end-of-the-year corporate events. "Last year, sales were up substantially. I’m expecting my customers will see a November-to-December year over year bump for parties of 10 to 20 percent."

Thank Goodness It’s… Wednesday

Kharasch thinks that operators need to be open to meeting corporate clients where they are, and that includes accommodating the change in work schedules. Friday-night holiday parties used to be the norm. With many employees working from home on Fridays, a Friday-night party no longer makes sense.

"The days of the week for these parties are going to change. It is not going to be just Friday night anymore. If your employees are only in the office three days a week and Wednesday is the day everybody is there, then our party is Wednesday," Kharash says. "We are pushing for a lot of daytime Christmas parties, versus people doing the evening with cocktails, dinner and all that," he adds.

Some of his clients are even offering to open on days they are usually closed if a corporate client wants to do a total buyout, or take half the restaurant. Operators who can offer this level of flexibility have an edge over those who stick to the way they have always done it.

Where many banquet and catering salespeople cold-call prospects with email blasts to local offices, Kharasch thinks the personal route is more effective. He recommends his clients send their marketing person into local offices with their menu, brochure, business card, and a sweet treat like cake or cookies to break the ice.

The Personal Touch

This is the hospitality industry. "Nothing beats going to a location and meeting the office manager, meeting the staff, dropping off cookies and cards and having that discussion," says Kharasch. Operators who do this now not only make a warm first impression, they may get the advantage of being an early mover.

While his urban clients are not seeing the promised lunch boost, Kharasch believes the need for event venues will impact all markets. Even if you do not offer lunch, or are not yet seeing your lunch business increase, banquets can boost sales at year-end.

HOW THE CHANGING CORPORATE CAFETERIA IMPACTS BUSINESS LUNCH TRAFFIC

You likely keep your eye on your competitors, the nearby concepts that offer similar menus and guest experiences. As you reshape your lunch daypart, you might consider another competitor, company on-site dining.

Employers are reshaping corporate cafeterias, offering to subsidize off-premises lunch delivery, and finding other ways to win over employees with quality meals at little or no cost. This is not exactly a new strategy. For many years, large companies, such as Google, have offered food and other amenities to attract talent and keep them grinding at the office longer. With current employee pushback of return to office, businesses are looking for ways to make driving to the office more attractive, even if only a few days a week.

When you hear the term "on-site foodservice" it might conjure a meat and three sides menu. For years, nothing has been further from the truth. When the food in the corporate cafeteria is just as good if not better than dining options down the block, employees have less of an incentive to go out for lunch. That is particularly true when there are time pressures limiting how much time can be taken for lunch off-premises.

It is not just on-site workers that get food perks from employers who want to retain them. Remote workers are seeing employer perks, like weekly lunch stipends or credits with third-party delivery services.

Bear in mind, that the guest experience is just as important as the food. Cheerful and speedy service, menu items they cannot get in the cafeteria, a midday beer, and a relaxing vibe might be enough to lure office workers off campus for lunch.

SELLING PRIVATE PARTY EVENTS AND BANQUETS

As important as space design, menu creation, and kitchen operations are to the success of your private party room and banquet sales, nothing happens until you make the sale. Unfortunately, most operators focus most of their investment of resources on the operation.

An experienced catering or hotel salesperson will have the basic knowledge and contacts to jump-start your sales. Most will expect a base salary and a bonus or commission plan to stay motivated. You might find that it is less than you expected. A good rule of thumb is to allocate 10 percent of your private party sales to your salesperson. That includes base salary and bonus. Run the numbers. Figure out how much business a sales manager would have to generate to justify the cost; however, expect a ramping-up time, as it is not realistic for a salesperson to pay for his or her services immediately. Your second-year return should be much better as you get rebooked from satisfied customers.

Do not make the mistake of leaving a salesperson alone. You want them to create a sales and marketing plan and review progress weekly. Not only will they feel part of your team, but accountability will improve their results. Make sure you encourage and facilitate an open line of communication between your salesperson and kitchen manager. They need to work together to exceed your client’s expectations.

Whether you inherited a private party room in your lease or are making plans to create one, you will find many opportunities to increase your profits. Each event brings guests that you can wow into becoming regulars. With any endeavor or expansion, proper planning on the front end ensures success in the long run. As much as restaurant owners are into the food and operations, do not underestimate the importance of sales and marketing. Nothing happens in business until someone sells something.

CAPTURE ATTENTION WITH CREATIVE AND PROFITABLE DAILY SPECIALS

Guests are always on the lookout for "the latest" at restaurants, and chefs are always inventing ways to keep the menu exciting. But it is not always feasible to overhaul the entire menu daily or weekly. Fortunately, the daily special can always create a little buzz in your house.

Specials are important to keep menus interesting. Ensuring return visits from customers requires a solid mix of standard and signature dishes along with fresh and intriguing options. Equally important, specials give the kitchen manager or chef a chance to stretch the imagination. They also keep the cooks motivated and interested in their jobs.

Most menus do not change more than four times a year to reflect the seasons. Some menus change even less frequently. Without specials to excite the cooks, they often long for new items to prepare, so keeping them energized is vital. Complacent cooks who are not charged by their position may look for a new place to hang their toque.

Daily specials are an ideal way for kitchen management to teach young cooks new techniques, how to handle new foodstuffs, and organize new items in their station with little notice. The daily special presents an opportune time to entice cooks to brainstorm ideas, a process that also invites camaraderie and a sense of ownership. For the chef’s part, the process often unveils initiative and creativity.