Weekly Update: Coronavirus & The Foodservice Industry, Week 25

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Stats Of The Week

The State Of The Industry

Despite restaurants reopening and rehiring employees, the restaurant industry has lost 2.6 million jobs as of July, according to the Bureau of Labor Statistics. Since quick-service and fast-food restaurants had a less complex time pivoting to off-premise operations, they’ve been able to rebound more quickly than casual dining restaurants. In June, quick-service restaurants added 1.3 hourly staff per unit while fast-casual restaurants added 2.1 hourly employees per unit in June. Comparatively, casual dining lost 3.1 staff members per unit for front-of-house employees and 1.1 back-of-house employees in June, according to Black Box Workforce Intelligence data. The data also shows a slight decrease in base pay with limited-service staff earning $10.20 per hour during Q2 compared to $10.25 in Q1 2020. Full-service general manager salaries decreased to $71,479 in Q2 compared to $72,703 in Q1 2020.

Consumers Opt For Alternative Food Ordering To Limit Contact

The COVID-19 pandemic has driven a number of changes in the world, including the way consumers make orders from fast-food restaurants. The use of mobile apps for food ordering has spiked from 51% in April to 64% in July, according to a report from Bluedot and SeeLevel HX based on a July survey of 1,501 U.S. consumers. The report also shows that customers increased their drive-thru usage by 43% in April. Nearly three out of four consumers visit the drive-thru as often or more often than before. Curbside pickup has also increased with 40% of respondents saying they used it more often than usual, compared to 27% in April.

What’s Trending

Experts Predict The Delivery Boom Is Here To Stay

While the pandemic has forced many dining room closures, customers have flocked to food delivery in order to receive meals and support their favorite restaurants. Restaurant delivery has gone into overdrive with Grubhub and Uber Eats reporting in recent weeks massive spikes in revenue, orders, new users, and restaurant partners from April to June. As consumers are staying home to prevent the spread of COVID-19, they are ordering more food, more often and a significant portion of first-time users are coming back a second time, according to researcher Edison Trends.

Experts believe that the delivery boom will stay once the pandemic subsides because consumers have become accustomed to the convenience of delivery despite the added cost. Restaurants also support this outlook. Bloomin’ Brands, the parent company of Outback Steakhouse and Carrabba’s Italian Grill, saw it’s off-premise business triple during the pandemic. Even now, with 92% of its dining rooms open, off-premise is continuing to make up 45% of its sales, executives said on the company’s recent second-quarter earnings call.

“There’s a lot that’s still unknown. As the pandemic continues, we hypothesize that delivery will still be an important part of restaurants as far as how people are experiencing food,” Sam Acuna, managing partner with Gallup, said during the virtual Food on Demand conference.

Restaurants Create Virtual Events To Keep Customers Engaged

From cocktail demonstrations to master classes, virtual events filled with guests that are yearning for the restaurant or bar experiences have become the new norm. In Seattle, WA, Zach Geballe, wine educator for Tom Douglas Restaurants and owner of his own company, Disgorged Wine, has been running a series of online wine classes to educate his viewers on the best wine pairings and the history behind them. Geballe provides meaningful information for his customers while giving them the experience of taking a wine class.

Soon after Paul Grieco, general manager and owner of Terroir Tribeca wine bar in New York City, closed his wine bar he jumped onto social media to begin an interview series called “From the Bunker”. The name is a nod to Grieco taking interviews from his basement office where he spoke to well-known figures in the restaurant industry such as chef José Andrés, founder of Central World Kitchen, and master sommelier Bobby Stuckey of Frasca Food & Wine in Boulder, CO.

“I did not want to lose touch,” Grieco said to Nation’s Restaurant News. “It was hard to shut down. I wanted to talk about wine. It took a pandemic for me to start using social media. I'm an old dog, but it became time I started learning these new tricks. It has kept me engaged and it has kept our guests engaged with us.”

NYC Restaurant Workers Struggle While Jobs Remain Scarce

At the beginning of the pandemic, New York City was the epicenter of the coronavirus. Now, 5 months later, while the virus has subsided, former restaurant employees are still struggling to make ends meet. According to the latest unemployment figures from the state, less than half of the city’s estimated 26,000 restaurants are participating in the expanded outdoor dining program, and even those that choose to participate are seeing business diminish at around 30% to 50% of normal volume. Nearly 60% of hospitality industry workers remain without a job in New York.

Many of the former restaurant employees that have not been called back to work are immigrants that made up the majority of the staff working in kitchens by either cooking, cleaning, bussing, or running food. Now, you can often find these industry workers waiting in long lines at schools, food banks, and pantries to obtain much-needed supplies while waiting for the opportunity to get back to work.

Large Chains Backtrack & Accept Second-Round PPP Loans

During the first round of PPP loan disbursements, many large restaurant chains received criticism for accepting large amounts of funding while smaller businesses received little to no money. Potbelly Sandwich Shop, a sandwich chain with more than 440 units around the country, was among several chains that were criticized during the first round of funding. Eventually, the chain returned the loan and gained much praise from the restaurant community. Now, in the second round of funding the sandwich chain has reversed course and taken out another $10 million PPP loan. Potbelly said in a statement that their business has stabilized over the past few months, but has been well below pre-COVID sales levels. Potbelly says the funds will go to their dedicated employees, to preserving jobs, and to keeping shops open.

Ghost Kitchens Prove To Be The Future Of Restaurant Growth

Ghost kitchens have shown to be successful during the pandemic as operators are able to run additional food concepts in the back-end of their establishment and bring in more revenue. Fat Brand CEO Andy Wiederhorn announced last week that the company has added Johnny Rockets to its portfolio mix of casual and fast-casual brands. Wiederhorn said in an email to Restaurant Dive that COVID-19 is a temporary crisis and the company is buying Johnny Rockets for the long term. The ‘50s-style diner concept was slated to expand its reach to casinos, theme parks, and cruise ships at the beginning of the year, but now those industries aren’t expected to make a sizeable recovery anytime soon. Wiederhorn says he sees immediate growth in allowing franchisees to scale Johnny Rockets through virtual restaurants via other Fat brands.

“Ghost kitchens are a great way to do this as it allows us to offer our concepts in new territories at a faster rate. We have also seen great success with our virtual restaurant concept where franchisees will operate brands out of existing physical restaurant locations and provide a separate menu offered only via third-party delivery service providers,” Wiederhorn said.

Bright Spots In A COVID-19 World

Local Restaurant Creates A Pre-COVID Experience With Live Music

FitzGerald’s, a bar and live music venue in Berwyn, IL, is utilizing its outdoor space to bring a little normalcy back to its local community. The bar has a large patio that can safely hold 100 people while maintaining social distancing and following local guidelines. The venue started hosting live music at the beginning of the summer with reservations available through OpenTable. While concertgoers are not able to move around the grounds and dance as they’re used to, folks do gently dance in their respective areas while wearing masks. Will Duncan, FitzGerald’s owner, said to Eater that the response to the community concerts was positive as music and good drinks give residents something to latch on to during these troubling days.

Ohio Restaurant Association Launches Fundraiser For Workers

The Ohio Restaurant Association aims to raise $30,000 in donations over the course of 30 days to assist restaurant employees who are in need due to coronavirus-related issues. In a press release, the ORA said they hope to raise more money for employees who are struggling in the restaurant industry that has been devastated by the pandemic. Recent ORA data predicts that more than half of all Ohio restaurants may be forced to close if the situation doesn’t improve in the next nine months. The fundraiser will offer several virtual events and specials for donors, including a cooking class and beers through local breweries.

Quote Of Hope

“Look at every possible angle to discover a revenue stream you can create, from take out and delivery to merchandise. Try something and fail. Be bold but be careful, and always take care of your team.” - Niven Patel, Miami chef and a 2020 Food & Wine Best New Chef

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