Stats Of The Week
The State Of The Industry
According to forecasts from Techonomic, the foodservice industry will grow by 21% in 2021 but sales are expected to still be down 11% from 2019. After a dramatic dip in sales in 2020, the restaurant industry is expected to lose anywhere from $250 billion to almost $300 billion in sales this year as compared to 2019. They found quick service is among the segments performing the best while full-service restaurants, bars, travel and leisure, and education are still struggling. Techonomic’s forecast believes the hope of the industry recovering is tied directly to medical advances related to COVID-19, such as a vaccine or advanced therapies.
The Road To Restaurant Recovery Isn’t Without Speed Bumps
According to the NRA, at the start of the pandemic, restaurant employment in every state fell sharply in March and April. The northeast region of the country was hit the hardest with seven states losing more than 60% of their foodservice jobs during those two months. In May, restaurant employment levels in every state began to recover as local economies started to reopen. California, Texas, Florida, and New York set the pace by adding back more than 200,000 restaurant jobs between April and July. However, these were also the four states that lost the most restaurant jobs in March and April. The NRA predicts that the road to restaurant recovery will be bumpy as shown with Texas, Arizona, Florida, and Oklahoma seeing restaurant employee levels decline in July due to the spike of COVID-19 cases in those areas.
What’s Trending
NY Gov Considers Closing Outdoor Seating For NYC Restaurants
While New York City restaurants are fighting to reopen dining rooms, NY Governor Andrew Cuomo announced last week that he’s considering shutting down outdoor seating as well. This move would resort NYC restaurants to only offering food for take out and delivery as they did in March. During a press briefing, Cuomo said NYC poses a unique risk during the pandemic because of its population density and spoke about NYC restaurants and bars not enforcing safety guidelines. As the weather gets colder in the next few months, Cuomo said he may suspend outdoor services to combat the risk of coronavirus infection spikes.
Groups, such as the New York City Hospitality Alliance (NYCHA), say the local restaurant industry has been decimated by the loss of dine-in service and outdoor dining has been the only means of survival for most businesses. The group notes that restaurants in every other region of the state have been allowed to resume using up to 50% of their indoor seating capacities.
Virtual Restaurants Surge During The Pandemic
From ghost kitchen, host kitchens, and virtual restaurants, most restaurants are pivoting to delivery-only menus to boost off-premise revenue during the pandemic. The options are endless for the virtual restaurant space geared towards consumers looking to pick up food rather than dining in. With most restaurants operating at limited or zero indoor dining capacities, many are turning to various forms of ghost kitchens to create new channels of revenue. Restaurants like Chili’s, Maggiano’s Little Italy, Applebee’s, Ruby Tuesday, Nathan’s Famous, and others are utilizing their kitchens to offer special items that aren’t included in their regular menus to customers searching through online food delivery systems. Experts say delivery-only menus are critically important for casual dining chains trying to survive the coronavirus crisis that has crippled on-premise revenue, according to Nation’s Restaurant News.
“As the demand increases for virtual stores, we will start to see sit-down restaurants, especially casual dining, disappear unless they can find a new way to innovate,” said Tim Powell, managing principal at industry consultancy Foodservice IP in Chicago to NRN.
Mobile-Focused Concepts Become The Future For Chains
According to a survey from Bluedot and research firm SeeLevel HX, 50% of consumers are using restaurant mobile apps more often now than they did before the pandemic. With widespread consumer concerns around safety and social distancing, off-premise formats have seen a spike in innovations to sustain revenue. Taco Bell is launching a new restaurant concept called Taco Bell Go Mobile that is designed specifically for diners to order ahead through the chain’s mobile app, according to a company press release. These locations will include one traditional drive-thru lane and one priority pickup drive-thru lane that quickly services customers who order through the Taco Bell app.
Smart kitchen technology integrated into the chain’s app will keep track of when a customer has arrived at the restaurant. Depending on which is faster, the app will guide them to either the priority drive-thru lane or designated parking spaces for contactless curbside pickup. Go Mobile restaurants will be 1,325 square feet compared to standard Taco Bell locations, which average at 2,500 square feet, and will include tablet ordering at both its drive-thrus and curbside pickup operated by team members known as "bellhops”.
Shake Shack Rewards Employees With Year-End Bonuses
Shake Shack announced that they will be rewarding all of their employees with year-end bonuses. The announcement comes after the company ended a 10% bonus pay program for its hourly workers that had been in place at the end of April until August 19. Each employee will receive a bonus ranging from $250 to $400 depending on their position. The company will also be distributing bonus payments to all managers through the next two quarters. Shake Shack had struggled during the pandemic as many of its restaurants are located in tourist locations and have now recovered enough to provide bonuses to their employees as a thank you to them, according to Nation’s Restaurant News.
Google Takes Steps To Make Ordering Easier For Customers
With more and more consumers ordering food online during the pandemic, Google is adding new features to allow consumers to order directly from their programs. When restaurant dining rooms were forced to close, Google added new filters that show which restaurants offer take out and delivery to make the experience easier for consumers. Now, the company is partnering with restaurants to make ordering food directly through them that much easier.
According to a company press release, Panera Bread is working with Google to allow customers to order
food through Google Search, Google Maps, and Google Assistant. The program works by customers searching
for “Panera near me” through any of those systems and they are given the option of ordering for curbside
pickup or delivery. Customers can use contactless payments, like Google Pay, to complete their orders.
The companies are calling attention to this new partnership by running a promotion for anyone who orders
Panera through Google to receive 20% off their first delivery or curbside pickup order of $20 or more
through September 14.
Image credit: Thaspol - stock.adobe.com
Local Chef Takes Up New Skill To Drive Business
Luella’s Southern Kitchen in Chicago, IL is known for bringing true southern cuisine to the city. When the pandemic hit the area, chef and owner, Darnell Reed, pivoted to take out and delivery like so many other restaurants. Once the city began to loosen restrictions and allow dine-in services, Reed chose to strictly offer delivery and carry out to keep his employees and customers safe. Reed had to close his second restaurant, Luella’s Gospel Bird, but managed to keep all of his employees. He chose to use his time to learn a new skill that would ultimately turn into part of his business: baking.
Reed said to NBC that he began taking online classes to learn new baking techniques and help create a second business within the business to make up for lost revenue. He launched Baye’s Little Bakery which is hosted online and helps create hours for employees that previously worked at his Gospel Bird location. Reed said he is happy that practicing a new skill helped grow his business and keep his employees.
Restaurant Feeds Hospital Workers With Community Help
Doug Levy, owner of Feast in Tucson, AZ, saw the devastation that frontline workers were experiencing at the beginning of the pandemic and thought the best way to help bring a bright spot to their day is with the help of food. Levy knew feeding hundreds of hospital workers wouldn’t be cheap, especially when his revenue dropped by a third due to dine-in closures. He then decided to reach out to his 4,500 devoted supporters on his restaurant’s email list for help. He calls those who offered to help his “Feastlings” with the deal being that for every 250 meals donated, Feast would make 50 of its own meals.
Since early April, Levy and his crew have prepared and distributed more than 3,000 meals to hospital workers in their area. Hospital employees receive meals like beef bourguignon, chicken cacciatore, and other special dishes. Levy told Tucson.com that this experience is helping keep his staff afloat while keeping the people who are doing the critical work fed.
Quote Of Hope
“We have more time to see ourselves as part of the community. As restaurateurs, we have a renewed respect for our servers, cooks, dishwashers, and all our vendors that come through every day despite the difficulties and the fears.” - Alma Alcocer, the chief operating officer of El Chile Group and executive chef of Bouldin Creek Tex-Mex restaurant El Alma.
