"Now there's [sic] many, many options that people are replacing chains with," Victor Fernandez, the executive director of insights at the restaurant-industry tracker TDn2K, recently told Business Insider.
Many of these options involve cooking at home. Grocery chains are increasingly competing with restaurants, thanks to lower prices and perks such as pick-up and delivery, new technology, and trendy features like wine bars and to-go meals. And meal-delivery kits like Blue Apron are focused on getting millennials on subscription plans to persuade them to stay in and cook a certain number of days a week.
Convenience is also a factor, both when it comes to delivery and speed of service. And casual-dining chains are still playing catch-up regarding delivery.
"The only part of casual dining that's growing right now is the off-premise side," Bonnie Riggs, a food-service industry analyst for NPD, recently told Nation's Restaurant News.
The late great economist Joseph Schumpeter had something to say about this in his 1942 classic Capitalism, Socialism, and Democracy.
Here's from his bio, where I quote his thoughts on his famous term "creative destruction:"
Innovation by the entrepreneur, argued Schumpeter, leads to gales of "creative destruction" as innovations cause old inventories, ideas, technologies, skills, and equipment to become obsolete. The question is not "how capitalism administers existing structures, ... [but] how it creates and destroys them." This creative destruction, he believed, causes continuous progress and improves the standards of living for everyone.
Schumpeter argued with the prevailing view that "perfect" competition was the way to maximize economic well-being. Under perfect competition all firms in an industry produce the same good, sell it for the same price, and have access to the same technology. Schumpeter saw this kind of competition as relatively unimportant. He wrote: "[What counts is] competition from the new commodity, the new technology, the new source of supply, the new type of organization ... competition which ... strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives."