Restaurant operators have been riding a rollercoaster from the “complete shock and awe” of the coronavirus pandemic in early to late March to the current state of “How can I survive?”
“We’re in for a long ride,” said Kelli Valade, CEO of Dallas-based Black Box Intelligence, a data company that represents about 290 restaurant companies and about 50,000 restaurant units.
The depth and duration of the pandemic’s impact have exceeded predictions, and segments like limited service have performed well while full service has suffered, she said.
Valade said Black Box in July polled members and webinar participants on their optimism, and 68% of operators said they expected things to get worse in the next 90 days. She said conditions had not changed materially to impact that level of pessimism.
“That’s the tone and tenor of what most people are thinking right now,” she said. “It may continue to get worse before it gets better, unfortunately.”
Valade said the National Restaurant Association estimated $145 billion in revenue was lost between March and June in an industry that was expected to do more than $850 billion in revenue for the year. That could grow to a $250 billion loss in revenue.
“It truly is devastating,” Valade said.
However, some restaurant industry segments are fairing better than others, Black Box data indicates, and some impacts — such as the move toward off-premise sales — may be longterm.
The disparity of improvement in limited-service restaurants vs. full-service operations is large, Valade said, and quick-service — with drive-thru infrastructure — has performed with marked strength. Recent Black Box data showed limited-service sales up fractionally at 0.7% while full-service sales were down 26.4%.
As restaurants reopen dining rooms amid easing to state and local capacity restrictions, customers increasingly are looking for safety cues from operators, Valade said.
“People will go to a restaurant if they feel comfortable and they feel safe,” she said, but they will revert to off-premise if they need to.
Rebuilding consumer trust is based on safety, Valade added.
Black Box polled its members on changing safety measures. As of three weeks ago, Valade said, the percentage of operators included:
- 97% offered hand sanitiziers throughout the restaurant.
- 96% required masks for all staff.
- 86% removed some tables.
- 77% took employee temperatures.
- 71% required gloves for all staff.
- 58% used plastic shields.
“The obvious changes in policy have come because of the duration of this,” Valade said. A number of large multi-unit brands, from Starbucks to McDonald’s, have also required customers to wear masks, she said.
“Clean is the new ambience,” Valade said.
Recovery is a delicate word, she said, with safety at the top of the ladder and digital innovation for online ordering and apps becoming in table stakes.
“It’s clearly going to take longer than we thought,” Valade said. For consumers, she said, “you have to deliver on the basic needs right now.”
This is part of special coverage of the Restaurants Rise digital summit taking place online Aug. 11-13 and Aug. 18-20, powered by Nation’s Restaurant News and Restaurant Hospitality. Register for live sessions or on-demand replays at RestaurantsRise.com.
Title sponsors for Restaurants Rise include Campbell’s Foodservice, GrubHub, Idaho Potato, ShiftPixy, Wisely and Impossible.
Contact Ron Ruggless at [email protected]
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