Two years into the pandemic, many people working or investing in the restaurant industry are still (understandably) operating in defense mode – cutting back on expenses, trying to anticipate the next challenge and otherwise playing it safe until somewhat more normal conditions return, whenever that may be. But for others, it is prime time to take risks. For instance, Fortune recently reported that since the start of the pandemic, Mercado Partners' Savory Fund has doubled down on restaurant investments. It raised two separate funds of $100 million each, aggressively invested in seven new restaurant brands and opened 55 new restaurants. On a smaller scale, forward-thinking operators are also finding opportunities for reinvention right now (and at a lower-risk entry point than might exist when the restaurant industry is flying high). QSR Magazine reports that when the restaurant Otto’s Tacos was concerned about having to close, neighboring restaurant Mighty Quinn’s Barbecue, which had a similar inventory, equipment, commitment to quality and footprint in New York City, saw an opportunity to grow both businesses. Otto’s Tacos has survived as a virtual brand run out of Mighty Quinn’s kitchen facility. While the pandemic continues to throw curveballs at restaurant operators, it is also revealing opportunities for positive and profitable change – if you know where to look.
For many consumers, it can feel like life is returning to pre-pandemic times, complete with in-restaurant meals and holiday gatherings. But as we begin another winter with Covid hovering in the background, restaurant operators are still having to develop strategies for keeping business humming during uncertain times. Beyond efforts to make outdoor dining a comfortable reality, indoor dining well-ventilated, and off-premise sales seamless, the industry has also been pushing Congress to replenish the Restaurant Revitalization Fund. The effort has reached a critical point and the Independent Restaurant Coalition is urging operators to make noise in Congress right now by contacting representatives and encouraging restaurant patrons to get on board too. If you want to get involved but aren’t sure where to start, the coalition has developed some resources to help, including an outreach guide, which includes background about the fund and sample scripts that can be used as the basis for emails, calls and social media posts, as well as state-specific resources. If your loyal guests are willing to help you in the effort, here is a flyer you can share with them – it includes some information about the fund and how they can help spread the word on your behalf.
At this time last year, it would have been unthinkable: During the first three quarters of 2021, sales for DoorDash and Uber Eats have plateaued, after a steady rise in 2000. To be sure, off-premise solutions are still needed and not going anywhere – particularly after the lockdowns made restaurant takeout and delivery the only means of getting restaurant food. But even as consumers have been enjoying a gradual return to in-restaurant dining this year, the stagnation in sales for third-party delivery providers does demonstrate the need for restaurant operators to be nimble in response to fluctuating demand from different sources. When you are faced with changing conditions – be it the weather, supply hiccups, foot traffic outside your storefront or something else – how quickly can you adapt? Lean on forecasting tools and information on historic sales to schedule staff and predict traffic, along with a Kitchen Display System that can help you streamline and prioritize orders from different streams. On the lower-tech side, consider approaches including cross-training staff in a range of tasks and using more speed-scratch ingredients in the kitchen in order to free up staff to take on different tasks as demand requires.
Times of challenge create opportunity – and while the pandemic has presented plenty of hurdles for restaurant operators, it is also revealing new possibilities for those with the resources and flexibility to snap them up. Case in point: A number of large restaurant brands are planning aggressive franchise expansion right now. According to a recent Restaurant Dive report, lower taxes, milder weather and more relaxed Covid restrictions have made the South and Southeast U.S. attractive targets for restaurant expansion lately. Shake Shack, for one, announced that it will be adding up to 50 new locations in 2022 – its largest expansion to date. Even for independents and smaller chain restaurants, there are opportunities. As restaurants have closed during the difficult months of the pandemic, some are leaving behind real estate pre-configured for drive-through business, along with heavy-duty equipment that may be available at a reduced cost. With an excess of restaurant real estate on the market, look for more preferable terms from landlords as well – particularly in higher-end locations that may have been out of reach pre-pandemic. Finally, if you’re open to less conventional arrangements, consider other restaurants or even complementary businesses that may want to join forces via sub-leasing arrangements or other partnerships that can help you both bring business in the door.
Your off-premise business no doubt looks a lot different than it did just a couple of years ago. According to research from NPD Group, off-premise restaurant orders were up 20 percent in September compared to where they were in 2019. But what happens when you’re not only struggling to source key ingredients but also the cups and containers you need to enable your food to get out the door? Ongoing global supply chain challenges have resulted in increased costs and scarcity of these items, with key suppliers having to limit the number of cases restaurant customers can purchase from them. Some major brands are finding alternatives that have fringe benefits. Sara Burnett, who leads sustainability efforts for Panera Bread, told CNBC that the brand had switched to a compostable thermal wrap for their sandwiches – and it happens to use 60 percent less material, is easier to transport and has a smaller carbon footprint. But as the pandemic ebbs, there may be less consumer concern about the need for single-use items – and perhaps an opportunity for restaurant brands to revive the pre-pandemic programs they had in place for reusable containers. As Nation’s Restaurant News reported recently, Tupperware has created reusable packaging for Tim Hortons as part of the brands’ partnership with the zero-waste platform Loop.