If you thought last year was a rollercoaster, this year might be another – with a few more ups and downs instead of a long, gradual drop. As we emerge from the pandemic, the great news is that consumers are excited to support restaurants in a big way: A recent survey of 5,000 consumers by the marketing company Constant Contact found that 44 percent of respondents said restaurants were among the first businesses they plan to return to. Some restaurants, particularly those that have incorporated technology into the day-to-day management of their business, have already experienced record-breaking customer demand (and therefore sales) this year. Of course, we’re not completely in the clear just yet, and a premature return to indoor gatherings could lead to a fourth wave of the virus. How can restaurants manage being in the position of having to rapidly ramp up inventory and staff like never before, navigate potential supply chain shortages, and then have to scale business back down in the event of an uptick in infections? First, be nimble: As you adopt new technology and systems for your business, prioritize those that allow you to make decisions minute to minute. Can your system help you adjust your menu, ordering and staff scheduling if a key ingredient suddenly climbs in price or becomes scarce, if your state reports a spike in infections, or if the weekend forecast is likely to bring crowds to your restaurant? Then keep your back-up plans handy: That means knowing what ingredients can be substituted for others in a pinch, creating multiple points of interest on your menu so people have many reasons to order from you, and knowing which companies can provide temporary workers on short notice for certain roles if you’re faced with sudden spikes in business.
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.
This year has been a frightening rollercoaster ride for restaurants – and while 2021 shows glimmers of improvement, we’re surely going to experience more twists and turns between now and recovery. But restaurants can also play an important role in shaping what’s to come. Recent research from McKinsey & Company said that to survive COVID-19, most restaurants will need a redesign – both in terms of their physical layout and business structure. If you’re planning to scale down your hours this winter or close altogether in anticipation of a stronger reopening in the spring, how can you use that down time to your advantage? Can you reconfigure your interior and exterior space to accommodate streamlined food pick-ups? Now is the time to, at the very least, create new systems that allow you to keep a finger on the pulse of your business every day (ask us how we can help). Ideally, that means adopting analytics and automation capabilities. They will help you manage inventory, monitor your equipment and energy use, provide contactless pickups, manage labor fluctuations, anticipate customer preferences – all of the critical capabilities you will need to succeed as we push through this difficult period.
COVID-19 is not done with us yet, as recent virus spikes and tightening local restrictions around the country have demonstrated. While everyone wants to avoid a repeat of this past spring’s restrictions, if you were suddenly faced another four- to six-week lockdown this winter, could you power through? What would your top concern be? The restaurant industry management platform Restaurant365 asked this question recently in a large survey of operators that included independent restaurants, restaurant groups, fine-dining and quick-service establishments, and full-service franchisees and franchise brands. The top concern – for nearly 26 percent of respondents – was generating enough revenue to break even. So what can you do now to fortify your operation and make sure the items you are offering are generating the largest-possible profits for you? Are there profits lurking on your menu that you could promote a bit better? Now is the time to identify which items give back to your restaurant. Sure, you might be able to tell right away that your bar menu and desserts are money-makers. Can you reinvent those items for take-away? There are likely other items that may not seem profitable on the surface but save you money because they minimize preparation time and ingredients. The app Eat says high-profit menu items that are often overlooked include, among others, low-prep dishes, nose-to-tail items, foods that minimize waste, and foods perceived as value items.
No question, the restaurant landscape will look a lot different once we emerge from the pandemic. Technomic estimates that 20 to 25 percent of independent restaurants won’t reopen. It’s easy to dwell on the sad realities of losing these businesses, but what if this period is what is required to usher in an industry transformation that many restaurant operators and employees would argue is long-needed? In a recent Eater report, two dozen restaurant leaders were asked to predict what the industry might look like in five years. Many of them see reasons for optimism – but first, they say some broken systems need to be overhauled when it comes to employee compensation, food transparency, consumer education about the true cost of food, management of the supply chain, and changes to the ownership structure of restaurant businesses. In the meantime, what’s clear is that consumers’ demand for restaurant meals won’t diminish – and as the Washington Post reports, new service formats like ghost kitchens are actually experiencing significant growth right now to meet that demand. While the experience of dining on restaurant food may well change in the coming months in years, perhaps the range of new restaurant businesses that emerge from this period will serve as incubators for fresh ideas on making the industry work more sustainably for all.
The reopening of restaurant dining rooms across the United States has been a study of extremes, whether in terms of guests’ responses to restaurant reopenings, operators’ willingness to enforce new health and safety guidelines, or even the guidelines themselves. As we enter the summer months and jurisdictions look to accommodate outdoor dining in previously unseen ways, we’re likely to see an even broader range of approaches to kick-starting restaurant sales. While your state and local authorities detail the precautions your business must take to protect against the spread of COVID-19, there is also room for some imagination within the rules you must follow. Hearing from operators who have deftly maneuvered through their own reopenings may help you sidestep some challenges (or even just plain awkwardness, like how to go about confirming the accuracy of orders when everyone in your establishment must wear a face mask, or determining how guests can best store their masks while they eat). A new website launched by Team Four Foodservice, www.foodserviceceo.com, can serve as a guide to the many guidelines restaurants are following right now. The site includes information from health and safety authorities but also recommendations from industry consultants. It may offer you some ideas that make sense to implement in your business. In any case, leaning on your network of restaurant operators as you reopen can help you tackle existing challenges and anticipate potential ones.