Stats Of The Week
The State Of The Industry
According to a recent Yelp report, in the months of August and September, 6,600 new restaurants and food businesses opened. These business openings are comparable to similar volumes between 2019 and 2018. Overall new restaurant openings in the third quarter of 2020 were down 10% compared to the same time last year. September showed a large increase in reopenings with 210,000 businesses reopening in the third quarter that were previously closed. The report shows a surge in outdoor dining during the summer months helped bring many restaurants back. The amount of Yelp restaurant reviews with outdoor dining doubled in the third quarter of the year.
Restaurants Enhance Off-Premise Operations In Response To Restrictions
With dining room closures preventing restaurants from being fully operational, many strengthened their delivery and mobile capabilities to bring in much-needed revenue. 86% of franchisee respondents offered delivery and online ordering prior to the pandemic and 72% have incorporated enhanced measures to off-premise channels since the pandemic, according to a TD Bank survey. Restaurant owners are planning for the long-term with the end of the pandemic being unknown. In 2020, 63% of franchisees planned to invest in delivery compared to 12% in 2019. Also, 63% of respondents planned to invest in mobile ordering this year versus 25% in last year’s survey.
How Winter Will Affect Restaurants
After restaurants started to recover during the warmer months, the upcoming cold weather may put a stall to any industry gains. Winter will eventually eliminate outdoor dining in states that reach exceptionally low temperatures, but a shift in consumer spending to take out may help keep them afloat. Since March, the industry has recovered $25.6 billion in monthly sales but remains 14% lower than where it was last year, according to recent federal data. With the combination of the cold weather and a spike in COVID-19 cases, recovery has slowed with some local officials reinstating dine-in restrictions.
Consumer spending is projected to shift from less on travel and more on holiday furnishing and decor, according to the Deloitte holiday retail survey. The state of the economy also is going to play a role with 40% of shoppers expecting to spend less this year due to money concerns. For winter, restaurants need to focus on take out and delivery and figure out ways to accommodate capacities in a safe manner.
Ghost Kitchens May Be The Answer To Keeping Independents Going
Many chains have been developing ghost kitchens as another revenue stream, but independent operators are turning to ghost kitchens to survive. Independents are turning to ghost kitchens because they’ve either been forced to close all on-premise operations or their off-premise business hasn’t generated enough to remain open. The main reason ghost kitchens have become so popular is because of their low cost which has been a major concern for independents during the pandemic. Ghost kitchens or virtual brand spaces pay less for occupancy, labor, equipment, and more.
“Ghost kitchens are not the solution, but they are certainly one solution for restaurants that are looking to lower expenses and avoid uncertainty around reopening because of their lower overhead, we predict that ghost kitchens are here to stay,” Krystle Mobayeni, CEO and founder of BentoBox said to Restaurant Dive.
Customers Show Support To Restaurants During The Pandemic
While restaurants adapted to their new way of life during the pandemic, a new and innovative playing field emerged as a result. Ghost kitchens are on the rise and prioritizing take out and delivery has never been more important. A new study shows that customers are supporting restaurants’ efforts and shifting their buying habits to work with restaurants. 23% of participants expect to continue ordering more take out and delivery even when we reach post-pandemic times and 46% say they don’t believe they will change their overall dining habits they adopted during the pandemic. 62% of respondents say their main reason for buying meals from a restaurant is the convenience, according to a Deloitte study.
“Restaurants that emerge from this unplanned inflection point in the industry’s history will be set up to provide a new standard in customer convenience, responsiveness, and safety that can pay off long after the tumult of this pandemic is over,” Jean Chick, a Deloitte principal said to Restaurant Business.
How To Build Consumer Trust Post-Pandemic
With the dangers of the pandemic on the top of everyone’s mind, consumer priorities have changed from taste and convenience to health and safety when it comes to dining out or ordering in. The pandemic has exacerbated consumer awareness of a restaurant’s cleanliness. Many customers say a restaurant’s sanitary practices are a major factor when deciding where to dine. Datassential surveyed customers and asked which brands made them feel safe. The survey found that Chick-fil-A, Cosi, Cotton Patch Cafe, Cheesecake Factory, Maggiano’s Little Italy, and World of Beer were among the top restaurants that gave customers the perception of zero risk. Chick-fil-A held the highest rank for making customers feel safe with customers stating that they trust that the chain is sanitizing frequently and maintaining high safety standards.
Customers Get The International Experience Through Menu Items
While everyone’s travel plans were put on hold for the year, restaurants are incorporating international flavors into food and drinks to help give customers a taste of being on vacation. A popular trend has been offering global cuisines for take out and delivery and adding ingredients that would traditionally be found in food being added to drinks. According to data from Technomic, bartenders and chefs are playing around with popular ingredients including Asian shishito peppers, saffron, gochujang, harissa, and seaweed in both meals and beverages.
Bright Spots In A COVID-19 World
Restaurant Group Creates An Inspirational Video With Local Independents
Giardino Gourmet Salads has 14 locations in Florida and has worked with the owners of their franchisees to help them out during the pandemic. Owners Ody and Kenny Lugo said before they knew it they became an accountant, a lawyer, and a doctor in any situation that was needed to give answers to franchisees. During the COVID-19 crisis, the owners have prioritized safety and even when their governor lifted all restrictions in the state, nothing changed for them. Ody Lugo said to Nation’s Restaurant News they would not compromise the safety of their staff or customers at any point. In the middle of the pandemic, the owners contacted local businesses to create a video that would show customers the faces behind each small business. Though these restaurants are competitors, each one participated and helped create the feel of a community from a distance. The video went viral and was even showed on NBC news.
Local Chefs Host Virtual Event For Food Pantry Fundraiser
The West Suburban Community Pantry in Woodridge, IL typically hosts an in-person fundraiser to help raise money and reach their mission of creating a community without hunger. This year their annual event went virtual with the help of local chefs hosting video calls and instruct cooking classes. Nearly 300 guests participated in the event and the organizers nearly doubled their goal and exceeded the amount raised from last year’s event.
“At a time when so many are in such need, it is gratifying to know that we have the support of the community. We could not have made this happen without the support of sponsors, the restaurants, caterers, bakeries, wine merchants, and the many people who attended,” Jeff Sietz, Board of Directors said to Patch.com.
Quote Of Hope
“The restaurant and hotel industry will continue to adapt and evolve against adversity. The restaurant concept of tomorrow will be focused on the technology of the future.” - Junior Therriaut, General Manager of About Last Knife in Chicago, IL