Summer is here, record-breaking temperatures can be a challenge for operators to do business as usual, or for people to be willing to eat at restaurants outdoors (or even indoors, unless there was reliably cold air conditioning). As we move through summer, extreme weather conditions – whether intense heat, fires or hurricanes that knock out electricity or otherwise impede business – will continue to be a threat to different parts of the country. But if the pandemic taught the restaurant industry anything, it taught us how to flex in response to a changing situation. Now is a good time to review your emergency management plan: If your facility is hit with a power outage, for example, will you be alerted right away? What actions should this trigger with regard to preserving inventory, safeguarding your facility and contacting employees? If a heat wave strains the energy grid and knocks out your air conditioning, how could you flex your service model, hours, menu and staffing to avoid short-term closure? To be sure, many challenges that come along may be out of your hands. But if you can prepare cloud-based back-up plans to guide you through how to shift operations in different potential scenarios, you may be able to ride out the challenges a little easier.
As evidence of their growing prominence in the restaurant industry, ghost kitchens are now getting their own events. In June, the Ghost Kitchen Conference in Dallas addressed this new and growing segment of the restaurant industry and how brands are approaching everything from menu development to digital marketing to site selection. Nation’s Restaurant News reports that ghost kitchens are demonstrating potential and an ability to gain competitive advantage in a few key areas. Service is one. While demand for delivery and off-premise restaurant food is high, the experience of eating this food can be lacking and difficult for operators to control. There is opportunity in the ghost kitchen segment to condense the physical distance between restaurants and customers and also channel more resources into building stronger relationships with delivery providers in an effort to make delivery a higher-quality experience (Fazoli’s, for example, treats delivery drivers to breadsticks.) Because ghost kitchens are small, nimble and flexible, there is also potential for them to push the boundaries of the segment. They can easily plug into grocery stores, airports, hotels or other facilities with a captive audience for restaurant food. Finally, these kitchens are lowering the barriers of entry into the industry. No longer does opening a restaurant require a substantial investment or attractive real estate (though the challenges of marketing ghost kitchens without brick-and-mortar counterparts surely generate new challenges related to marketing and customer engagement).
The pandemic has been a time of reckoning for restaurant employees – and, since labor is scarce, also a time of empowerment. Bit by bit across the country, more restaurant workers are taking steps to unionize, whether in an effort to improve the current working environment at their restaurant or to normalize and spread the employee-friendly culture they already experience at their restaurant. It’s a trend that industry analysts expect to continue. In the U.S., just 1.2 percent of the estimated 11.9 million people working in restaurants and foodservice belongs to a union, according to the U.S. Bureau of Labor Statistics. That makes the industry one of the least unionized of any employment sector, despite its reputation – fairly or unfairly – for instability, low benefits and pay, and abuse from managers and guests. Many new efforts at unionization, such as those at Pavement Cooffeehouse in Boston, have been employee-led. In other cases, restaurant operators are going so far as to encourage the unionization of their business at the outset. In Rochester, N.Y., Meghesh Pansari, the owner of the Indian restaurant Nani’s Kitchen, encouraged his employees’ decision to unionize – perhaps because his restaurant already has an employee-friendly culture that he would like to serve as a model for other operators. Workers there share tips, make $15 an hour, get a week of paid sick leave annually, and the company covers half of the monthly payment for the health care package it offers full-time workers through the Healthy New York EPO plan, according to the Rochester City Newspaper. One shift leader said, “We had to unionize at Nani’s because we already had very good conditions, and we think that it’s important to kind of try to start pushing this and encouraging other restaurants to unionize.”
Restaurant digital orders skyrocketed 124 percent in March over the same period in 2020, according to NPD Group. That spike resulted in an influx of new restaurant loyalty programs in the market over the past year. Now a number of brands are revamping their existing programs in order to fine-tune their approach to their loyal guests – and enhance their actionable data as a result. As CNBC reports, some of those changes include improving the number or the quality of rewards for guests, expanding the number of payment options (including cash), and incorporating technology that recognizes a guest as soon as they enter the drive-thru or front door, enabling staff to greet the person by name and call up their preferences before they say a word. Others are providing loyalty program members with information on how many rewards they have earned in the past year. To be sure, as more of these programs enter the market, it will become harder for them to stand out – but it also means consumers will come to expect some rewards customized to their preferences in exchange for their regular business at restaurants.
The pandemic has set all kinds of innovation in motion across the restaurant industry, so it makes sense that it would touch delivery, which many in the industry viewed as ripe for reinvention even before the pandemic. New models have been emerging in recent months in an attempt to make delivery work financially for restaurants, particularly for smaller ones that don’t have the scale to support in-house delivery or to be able to afford the fees charged by third-party vendors. One such model is community-based delivery services. Many of these services, which have been popping up in places as geographically diverse as Nebraska, Ohio and Washington, D.C., are cooperatives – the result of owners and workers pooling resources to provide delivery without the unmanageable costs. As The Counter reports, the participating restaurants pay membership fees to cover operating costs, as well as salaries for drivers and dispatchers. They receive a share of profits each year. In practice, this could amount to a $300 monthly fee for a restaurant to participate, along with a monthly subscription fee or a flat, per-order fee for customers. If you have a loyal following of customers and relationships with other restaurant operators around your community who struggle to make the math of third-party delivery work, joining (or starting) a community-based delivery service might be a helpful alternative.