We have a very successful seafood restaurant in the area. It’s a family owned business and a single location, not a chain. A few years ago, they decided to expand since they frequently had a line out the door at lunch and dinner with wait times of 30 to 60 minutes.
However, when they expanded, they changed the physical layout of the restaurant. Instead of having one large dining room they built several smaller rooms — similar to a hub and spoke concept.
When the expansion was complete, business declined.
After speaking with several “regulars,” we learned they perceived the quality of the food had declined when the restaurant expanded. Further probing this perception led to the learning that the consumers’ perception of food quality was correlated with how crowded the restaurant was.
When asked for details on how the food quality had declined, respondents did not provide any consistent specifics. When probed further, we frequently heard, “it’s just not as crowded as it used to be so the food quality must have gone down.”
With the expansion of the restaurant and the redesign of the interior, diners did not get the impression the restaurant was as crowded as it was before the expansion and this must be because the food didn’t taste as good.
Once the restaurant tore down some walls and recreated its large dining room feel, business picked back up and exceeded pre-expansion levels.
I don’t know if there’s anything the restaurant owner could do to foresee this problem other than research the best practices of larger chains. We are glad they obtained consumer insights to rectify their problem.