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As we head into 2025, the saying “flat is the new up” continues to hold true in the restaurant industry: guests are still dining out, but they’re stretching out the time between visits. Despite rising competition and constantly shifting consumer expectations, many are cautiously optimistic about the year ahead—but it remains a challenging environment for restaurant operators. Derek Rosenbaum, President and CTO of Groucho’s Deli, shared in a recent conversation, doubling down on driving repeat guest visits can help brands combat this ongoing challenge.

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Here’s how Groucho’s Deli, an 83-year-old brand from South Carolina, is using retention strategies to navigate the complexities of today’s market—and what other operators can learn from their approach.

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Why Retention Matters More Than Ever

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Rosenbaum shared key insights from Groucho’s 2024 performance: while new guest traffic was down 5%, repeat traffic was up an impressive 22%. This focus on retention has allowed Groucho’s to grow AOV and revenue despite broader economic pressures. Their strategy centers on one core belief: when you focus on retaining guests, you can increase frequency, and in turn, new guest acquisition can happen as a byproduct of strong brand loyalty.

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Adapting to the New Normal 

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The restaurant landscape has fundamentally changed. Off-premise dining now accounts for 58% of Groucho’s revenue—a significant shift driven by consumer demand for convenience. However, Rosenbaum emphasized that retaining guests in this environment requires more than simply offering convenience. It means creating consistent, memorable, and meaningful experiences that keep guests coming back, regardless of the channel.

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Key elements of Groucho’s guest retention strategy include:

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1. Personalizing Engagement: By collecting and leveraging first-party guest data through tools like loyalty programs, Groucho’s creates tailored offers and experiences that encourage repeat visits. Personalized communications—whether emails, text messages, or app notifications—play a crucial role in reminding guests why they love the brand.
2. Educating Guests About Value: To retain customers who might otherwise order through third-party apps, Groucho’s emphasizes the benefits of ordering directly, such as cost savings and a better ability to cater to guest preferences. This approach not only boosts retention but also strengthens the direct relationship with their guests.

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Retention Tactics Across Channels

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In a world increasingly dominated by digital interactions, restaurants must deliver exceptional experiences across every channel to keep guests loyal. Groucho’s employs specific retention tactics to meet this challenge:

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• Strengthening Loyalty Programs: Rosenbaum emphasized the growing importance of gamification and rewards, especially for younger generations like Gen Z. Instant gratification through points or discounts fosters engagement and encourages repeat visits.
• Enhancing Off-Premise Experiences: From investing in high-quality takeout packaging to improving the efficiency of native online ordering systems, Groucho’s ensures that even guests dining off-premise feel valued and connected to the brand.
• Digital Communication for Service Recovery: Groucho’s leverages online reviews and social platforms to engage with guests after their visits. Addressing issues promptly and publicly reinforces the brand’s commitment to excellent service and builds trust among current and potential customers.

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The Path Forward

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As Groucho’s Deli looks to 2025, their focus on guest retention remains clear. By personalizing guest experiences, leveraging guest data, and optimizing digital communication, they aim to deepen relationships with their existing customers and adapt to the challenges of an ever-evolving restaurant landscape.

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For operators navigating similar challenges, the takeaway is simple: retention is one of your most powerful tools. Nurture your current guests, meet them where they are, and give them every reason to keep coming back.