As much as we all hoped and expected this summer would represent a return to pre-pandemic gathering and eating out, the delta variant has had other plans in store for many parts of the country. Restaurant operators, again, have been put in the challenging position of having to be enforcers of ever-fluctuating state and local regulations – all while continuing to juggle ongoing labor and supply shortages. If you haven’t already, it’s a good time to take a look back at your early-pandemic playbook and identify income streams that might help you weather the current challenges. That could mean posting new products for sale on your website, offering cocktails to-go if allowed in your state, and promoting family-style meal packages for guests who crave your food but aren’t yet comfortable eating out. Consider how your restaurant might adapt to the current situation of local consumers – whether that be a continuation of working from home or the beginning of hybrid work. Try to create stability, wherever possible, for both guests and staff. That could involve sticking with delivery and takeout service only (at least for the time being) or operating on a limited but set schedule. While it may feel like you’re missing opportunities to generate sales, guests and employees alike are likely to value predictability. Your loyalty program may help you here too. Do you want to boost visits on particular days and times? Increase your carry-out business while dine-in business is uncertain? Consider how you can incentivize your most loyal guests to help you keep business humming. As the pandemic continues, hybrid work arrangements look like they may be here to stay for many – if not most – companies around the country. Global research indicates that 72 percent of corporate leaders plan to offer hybrid models of working. How might your restaurant meet the moment? If your dine-in business lunch traffic continues to be low, could your business find a new way to attract the guests who used to come to you? Panera, for one, has been acting on a new strategy aimed specifically at remote workers. They are offering scheduled group ordering, as well as catering for companies with workers in different places. At a time when companies are trying to navigate how to maintain camaraderie across employee teams that may only see each other for a few days each week in satellite offices, offering a regularly scheduled catered lunch might be an appealing way to make the most of the time employees spend face to face. Or, you could target the large population of consumers working from home. The World Economic Forum said recently that up to 20 percent of the U.S. entire workforce will continue to work from home permanently, up from 5 percent pre-pandemic. If you’re located in an area with condominium complexes where people are apt to be continuing to work from home, offering a scheduled building-wide delivery might enable you to attract lunchtime traffic – even if it’s not in your dining room 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 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. Seemingly all restaurant operators have had to adjust how they operate during the course of the pandemic, whether by enabling curbside pickup, designing delivery-friendly menus, redesigning a strip of sidewalk to accommodate tables in any weather, or otherwise. But even as we ease back into more normal conditions, it will likely benefit you to retain many of the changes you have made. For one, make your outdoor dining areas usable year-round with the help of solid structures, sturdy weather-resistant canopies, heat lamps and even those dining bubbles used widely last winter. This is simply about scrutinizing your entire real estate footprint so you are making money from each square foot. Along those lines, try flexing your space to better accommodate carryout and delivery orders during lunch, or offering promotions to remote workers looking for a temporary workspace or snack break during your quiet periods. Your takeout menu is another area that needs to hold strong with foods that travel well, coordinated cocktails and special touches like notes or candies included in the bag. Continue to seek out technology that will help you streamline ordering and payment, minimize lines and turn tables faster. Finally, maintain your efforts to show your commitment to cleanliness. Hand sanitizers should be ready for guests as they walk in your doors – and asking guests to sanitize their hands before they sit can help you show them you care about safety. On-demand food delivery is just getting started – and restaurants may be just one part of it. Uber announced recently that it had partnered with the on-demand delivery startup GoPuff to offer items from grocery and convenience stories in 95 cities within the next couple of months. (This is on top of its recent acquisition of Drizly, enabling the delivery of alcohol.) As grocery stores offer more ready-to-eat foods and companies like Uber appear to be making it easier for consumers to have food and drink delivered when they want it from businesses beyond just restaurants, where does this leave restaurants? To be sure, developments like this hint at how third-party delivery companies could be shifting gears to promote greater profitability after the pandemic – and potentially become less reliant on business from restaurants. In any case, as life begins to return to normal, restaurant operators need to continue to think about how they can innovate. That means studying developments in delivery and identifying new ways to make it work financially, whether through in-house options, partnerships with other restaurants or other avenues. It’s also about looking for new opportunities to get a restaurant’s brand in front of consumers – via such routes as ghost kitchens and partnerships with grocery stores that can offer hot or prepackaged restaurant food to go – or elevating and differentiating the in-restaurant dining experience so consumers feel the need to make it a bigger part of their lives again. A recent report from Restaurant Hospitality shared some things operators are doing to innovate, ranging from delivering food to lockers in apartment buildings to finding creative ways to minimize food waste.
Among the many aspects of life that are evolving because of the pandemic is residential real estate – perspectives are changing about the best places to live and people are looking for their living environments to fill a wider variety of needs. While flight from urban areas might not be as pronounced as media reports might have you believe, according to a Barclays Capital report on commercial real estate, urban developers are still feeling the need to redesign communities to attract and retain residents in creative ways: Think multifunctional spaces that allow people to live, work, socialize, work out and eat without leaving the complex. As a result, these developments are becoming a growth area for ghost kitchens. The Spoon reports that the virtual restaurant network C3 has partnered with an apartment developer to serve up meals for delivery, as well as for onsite service in bars and pool areas at communities in Phoenix and Nashville, with other cities being added soon. If your restaurant is looking for a new niche, consider making a pitch to self-contained living environments – from extended-stay hotels to apartment complexes to senior living condominium communities. These facilities may not only have the kitchen space your business needs but also the concentrated demand for food that feels special.
Takeout is here to stay (and even if you’re eager to serve a full dining room again, you have reason to be happy about the takeout part). The proof is in the numbers. According to a new survey of more than 2,000 U.S. consumers by Paytronix Systems, 63 percent of the money that U.S. consumers spent on food orders last year was on food eaten at home. Digital channels supported those orders by a large margin: Of the money consumers spent online on food orders, 89 percent was spent on orders placed via desktop websites, mobile apps and aggregator apps. What’s more, the research found that consumers spent 50 percent more on average when they placed orders online for takeout. Paytronix CEO Andrew Robbins says that in 2021, a consumer’s ability to order online, collect orders via a drive-thru or curbside pickup, and earn rewards through loyalty programs will create the most opportunities for restaurants. This makes it all the more critical to be able to use your POS to quickly summon information about what your recipes cost, which menu items deliver the most profitability, and what items a guest has ordered in the past. If your restaurant receives a grant from the American Rescue Plan, consider using it to fine-tune your tech to streamline your takeout so you can suggest the profitable items and combinations that a guest is most likely to crave time and again.
While COVID-19 has expedited a great number of advances for the restaurant industry, it has also forced a notable regression for many operators with regard to packaging. Pre-pandemic, reusable containers and recyclable or compostable packaging had been a key area of focus for restaurants. But concerns about safety, efficiency and cost in the past year have made many operators scale back on those efforts and even revert to the use of plastics and Styrofoam to accommodate off-premise orders. As we emerge from the pandemic, your packaging should be ready to carry some extra weight: It should minimize waste, demonstrate your brand values, steer customer behavior and uphold pandemic-era safety and sanitation precautions at a time when off-premise dining continues to comprise an outsize portion of overall restaurant sales. For example, as Nation’s Restaurant News reports, Just Salad has launched a “zero-waste” reusable bowl packaging option for customers who order online. (The reusable option had been offered for years but not for online orders.) Customers return their bowl to the store for sanitation and reuse. Not only does it save the business on the cost of disposable packaging, but it also elevates the brand’s environmental values: Many consumers want to support the environmentally friendly option when they order food online – if they have such an option and it also preserves safety. In a recent paper from McKinsey & Company about U.S. consumer attitudes towards sustainability in packaging, the company advised operators to keep three tenets in mind regarding packaging: Make sustainable packaging available and apparent to customers, adopt an experimental approach to options and communicate about them clearly, and also bear in mind COVID-19 protections for hygiene and food safety. Does your packaging meet those criteria?
The ghost kitchen segment has plenty of room to grow, with less than 5 percent of restaurants adding delivery from ghost kitchens as an option during the pandemic. These kitchens also boast a range of potential benefits, ranging from improved scalability to decreased overhead costs. After a year in which restaurant operators have been forced to pivot on a daily basis in order to survive, ghost kitchens have become the poster children of flexibility, allowing operators to churn out a rotating range of menu options – often items rarely seen together on a menu – in response to consumer whims. Operators are also uncovering new and often cost-effective places to open ghost kitchens, from college campuses to hotels to really any centrally located space that has a professional kitchen. But just as the pandemic has required the restaurant industry to be flexible in its accommodation of off-premise orders, coming out of the pandemic may require a different kind of flexibility. As this Grub Street report explains, a lot of the magic of eating in restaurants (and the improved quality of the food experienced on-site) just can’t be replicated by the ghosts. While consumers crave convenience, they also appreciate a special experience – communing with others and trying foods they wouldn’t have otherwise considered, which is generally more likely to occur onsite. That may be especially true as people look to make up for lost time after a year spent close to home and away from gatherings (according to a new report from Paytronix and PYMNTS, more than two-thirds of the restaurant food ordered last year was eaten at home). So going forward, whether you’re considering new real estate, kitchen equipment or ingredients, look for flexibility: As you shift your operations to support off-premise sales, consider the potential that you might want to shift back.
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