Weekly Update: Coronavirus & The Foodservice Industry, Week 45

Published on  Updated on  

Stats Of The Week

The State Of The Industry

Newly released federal data has shown that 2020 was the worst year ever recorded for the restaurant industry. At the beginning of 2020, the NRA projected that restaurant sales would hit a record high of $899 billion. At the end of last year, with restaurants facing the negative impacts of COVID-19, restaurant sales declined to $617 billion. Over the past three months there have been consistent downward sales trends, with sales declining 4.5% in December from November alone. With coronavirus cases at an ultimate high and state shutdowns increasing, the next few months are projected to be even more challenging for the industry.

Experts Predict 2021 Will Be The Year Of Transitioning

Even though vaccine distribution is ramping up and restaurants experienced a bit of recovery during the summer, the dramatic sales losses restaurants suffered won’t be easily reversed in 2021. During a virtual conference hosted by ICR, a communications and advisory company, top industry experts, Peter Saleh and Hudson Riehle, said 2021 will be hindered by dining room closures, capacity restrictions, and consumer concern over dining out. Though there will be challenges, they believe that there are still opportunities for the industry to go towards market improvement. They cited that the demand for Americans wanting to eat out has increased with about 67% of citizens saying they weren’t eating at restaurants as much as they would have compared to just 45% last March.

"It’s important to see 2021 as a year of transition for the industry. Because when you look at the timing of vaccine distribution reaching a critical mass, it is approaching the summer months. There's also the issue of how consumers adapt to lower overall income levels," Riehle said during the ICR virtual conference.

What’s Trending

Biden’s New Financial Plan Brings Hope For Restaurant Assistance

Last Thursday, President Joe Biden provided details on his $1.9 trillion American Rescue Plan which lays out funds for the hardest-hit industries. The program includes a $15 billion grant program to over 1 million small businesses and a $35 billion investment toward local financing programs to offer low-interest loans to entrepreneurs. Though this financial assistance does not specifically target the restaurant industry, it leaves room for the opportunity of future relief. The Independent Restaurant Coalition said in an email to Restaurant Dive that it is encouraged by President Biden’s repeated and outspoken support for direct aid to independent restaurants and bars, especially as the restaurant industry is one of the only industries experiencing shrinking employment and closing doors across the country.

Top 2020 Trends That Helped The Industry Survive

The NRA has released a list of the top trends that kept restaurants in business during the trials and tribulations of the pandemic in 2020. The association surveyed 6,000 restaurant operators about culinary trends, innovation, and consumer preferences to compile a list of restaurant trends during the pandemic. At the top of the list is streamlined menus. No matter the type or size of the restaurant, all establishments minimized their menus to eliminate excess items when dining room closures were initiated. Then, off-premise operations took precedence with restaurants forced to move to take out and delivery to stay in business. Bundled meals and family-sized portions offered convenience and easy meals at larger portions for families that have children attending virtual school while managing their work from home. Also, restaurants implemented grocery items to sell, helping them stay afloat while allowing customers to receive items they needed and would otherwise be sold out at traditional grocery stores.

How Some Restaurants Are Hiring As Others Close

As the coronavirus has devastated most of the restaurant industry, it may seem hard to believe that some restaurants are expanding. The quick-service segment has seen exponential growth because it was better equipped to handle dining room closures due to already-established off-premise operations. Chipotle Mexican Grill is one chain that has been continually hiring employees. The nation-wide chain focuses on employee culture, benefits, training, diversity, and inclusion. According to experts, companies with a good combination of benefits and effective employee wellness programs are better able to manage and recover from the impact of the pandemic. The company also credits its growth amid the pandemic to its business model that incorporates more sales through digital platforms.

"If you look at the top five responsibilities of every one of our restaurant general managers, the number one responsibility is hiring and onboarding new people. What we're doing from a national standpoint is really accelerating their ability to do it all in one day, and fill a lot of the needs now because we have them," Marissa Andrada, Chipotle Chief Diversity, Inclusion, and People Officer, said to HR Dive.

Vaccine Rollout Creates Restaurant Confusion

When it comes to whether or not restaurant operators will require their employees to take the COVID-19 vaccine, the consensus is uncertain. A new Restaurant Business survey shows that only 20.4% of restaurant employers intend to require their staff to be vaccinated, with more than half of them indicating they’ll make exceptions for religious or health reasons. Other operators have stated that their policies are still being drafted. It seems restaurant operators have more questions than answers as vaccine distribution is still underway and prioritized for frontline workers and elders. Roslyn Stone, COO of Zero Hour Health, said to Restaurant Business that establishing guidelines is complicated because the industry knows less than they need to make really good decisions because there’s so much we don’t know.

Catering Goes Virtual

The catering industry has experienced a record loss in sales due to the effects of COVID-19 and events being canceled. About two-thirds of operators have suspended their catering programs entirely, according to Technomic. As an attempt to make up for lost business, Panera has launched a Virtual Catering program. The catering program is targeted towards remote workers with the goal of helping bring back the sense of community when sharing a meal with coworkers during a meeting or event. Companies are able to buy digital vouchers to send to remote employees prior to an event that is timestamped and valid during the time of the meeting. DoorDash and Uber Eats have also offered similar programs to allow businesses to offer employees meals whether they’re working from home or in the office. A DoorDash survey found that 90% of American employees miss at least one food-related benefit of being in the office which shows a great opportunity for virtual catering.

Bright Spots In A COVID-19 World

Fundraiser To ‘86 Restaurant Struggle’ During The Pandemic

Andrew and Lauren Gruel, owners of Slapfish in Huntington Beach, CA, have launched a fundraiser to help struggling restaurant workers during the pandemic. Their grassroots fundraiser is aptly called ‘86 Restaurant Struggle’ which gives out $601 donations, one dollar more than the government gave to citizens in the most recent stimulus package. Any restaurant worker who has had their hours cut or has been laid off is eligible to receive funds. So far, the couple has fundraised $293,000 and is going for a goal of $1 million to help restaurant employees in need.

Community Comes Together To Help One Another

Ian Braverman, Chicago resident, took it upon himself to start a GoFundMe campaign to help garner community support and collect donations for local restaurants. In a matter of weeks, his campaign raised about $14,700 which included $7,000 from an anonymous donor. Braverman said to the Chicago Tribune that seeing people donate showed him the spirit of selflessness and how people are just trying to help each other out to get through this all. Braverman divided up the funds and gave them to struggling restaurants in his area. Braverman said some of the restaurants put the donated money towards utility and rent bills or their employees and some pumped the funds back into the community. Grill House, owned by Nick Drivas, decided to pay the money forward by donating $1,000 in which they gave away $50 Grill House gift cards to 20 families in need.

“It feels good to give. I know how I felt when Ian came in and gave that money to me, and I was just thinking that maybe it would be best to give that same feeling to somebody else and pass it on,” Drivas said to the Chicago Tribune.

Quote Of Hope

“It takes a community to [work together]. I think it just shows how strong a community is, as well as how far people are willing to go to make sure others are taken care of.” - Ian Braverman, Chicago resident

Published on  Updated on