Big changes for restaurants after COVID-19

I thought it was time to look into the crystal ball.  After scouring news articles for 60 days, several themes arose from the ashes of the pandemic to reveal the top-10 changes for restaurants after the crisis ends.

1. Chains will rule – 7 of 10 restaurants are owned by individual operators according to the National Restaurant Association, most of whom are independent. Unfortunately, those independents have been the majority of closures and if 10-15% of all restaurants permanently close during the pandemic, then only healthy chains will be left.

Prior to the Pandemic, the outlook by the National Restaurant Association was reported here for context. https://www.restaurant.org/research/restaurant-statistics/restaurant-industry-facts-at-a-glance

2) Growth will rebound – Chains will increase unit growth to fill the void left by closed restaurant locations. New independents will arise out of the ashes. The new wave of restauranteurs will have learned from the recent crisis and will focus on sustainability of operations by leaning hard into delivery, take-home, contactless payment, and other enabling technology.

3) Ghost kitchens – new and existing concepts will cooperate together to develop ghost kitchens where multiple cuisines live in harmony to satisfy the appetite of urban dweller and the virtual food court will become a thing.

Starbird’s is working on virtual brands for what they call a cloud kitchen strategy.  Details: https://www.qsrmagazine.com/emerging-concepts/ceos-5-takeaways-what-works-post-pandemic?utm_campaign=20200601&utm_medium=email&utm_source=jolt

4) Cleanliness is next to Godliness –  Serve-Safe and other entities who train restaurant employees to prepare and handle food will proliferate and the constant disinfecting of communal surfaces such as counters, door handles, tables, chairs, and condiments will become the expected norm. The reopening guide by the NRA will be followed by all and probably expanded by many. https://go.restaurant.org/covid19-reopening-guide

5) Off-premise will continue to grow – Now that consumers are getting used to ordering food digitally and internal and external delivery is expected, the trend may slow after the pandemic ends but the trend for facilitating delivery, take-out, meal kits and the like will proliferate.

6) Digital Rules – Every restaurant, whether they be independent, or part of a chain will provide as many e-commerce channels for guests to order food as possible. Wing Stop, Domino’s, and Chipotle are doing well during the pandemic because they were positioned to survive in a crisis.  All restaurateurs who don’t learn that they need to embrace digital orders and provide ways for customers to get the food where they want it and when they want it will fail. Perhaps this should be #1 on the list for the top-10 changes we will see in the restaurant industry.

7) Shrinking dining rooms – Because of the shift to off-premise dining, new restaurants in all categories will reduce the square feet of their dining areas. Existing locations will remove tables and chairs to always be prepared for social distancing.

8) Marketing mix shift – Whereas TV was a big part of the advertising mix for national chains and larger regional chains, the shift to off-premise will force restaurant brands to lean much more heavily into digital advertising channels. The shift will occur because restaurants will more easily track conversions from online visibility to online orders as a key metric. The brands that do continue to use to TV will determine how to make Outcome-Based TV buying work.

9) Marketing Messaging – All restaurants will need to understand their consumer and know the new customer journey better than ever before. Every brand will also need to nail their brand proposition because if they don’t, all ads after the pandemic ends will be about digital ordering and delivery.  Digital channels may be a convenient benefit, but if every restaurant offers the standard digital channels, those digital channels will not be unique to anyone.

10) Counter Culture – There will also be creative and innovative individuals and organizations that will buck the status quo. Whether they embrace video dining, reinvent food halls, or return to a cash-only payment model, we will see successful attempts to do everything they can to not be trapped by the previous 9 changes.

In conclusion, the top-10 changes for restaurants may be different from this list but you can bet many of the themes will occur because they are happening now.

https://www.itbpartners.com/doug-reifschneider/

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