Restaurant Industry Roundup: May 2020
As the US slowly eases quarantine restrictions, restaurant owners and operators are scrambling for dine-in traffic. The industry has experienced historic Mother’s Day restaurant meltdowns, operators are preparing to put more effort into breakfast, and UK consumers have big feelings about reopening hospitality businesses. Look through our laminated, limited menu, and experience flavors from around the world in our restaurant industry roundup, May 2020 edition.
The British Are Coming
How do customers feel about returning to their favorite pubs, restaurants, and bars in the UK? It seems like the British are hungry for restaurants. The UK government’s goal is to reopen hospitality businesses on July 4 with health and safety measures to be published in the upcoming weeks. Kare Nicholls, chief executive from UKHospitality, points out that “consumer confidence is going to be key once businesses begin to reopen. It is going to be a long, hard road back to normality, and venues are going to need the support of their communities.”
Caterer.com gathered statistics from a survey of 2000 adults:
- 51% were ready for hospitality to “get back to normal.”
- 35% pledged to dine out more.
- 43% expressed their plans to tip more than they would have before COVID lockdowns.
Along with taking this survey, customers provided suggestions that they would like to see in place:
- 62% would feel comfortable eating in restaurants with every other table occupied.
- 55% want businesses only to allow parties of up to four per table.
- Around 40% of customers are prepared for additional charges for enhanced restaurant safety measures.
Digital and Delivery Orders on the Rise
In March 2020, restaurant traffic declined by 22% compared to March 2019. However, digital restaurant orders increased 63% and delivery by 67%, as reported by The NPD Group. QSR visits decreased by 19%, but the segment represented most of the digital and delivery order gains. Even though QSR drive-thru visits declined by 3%, the average checks increased by 5%.
In the FSR segment, traffic declined 35% between March 2019 to March 2020. The average check size for FSRs increased by 15% in March. NPD food industry advisor and author of Eating Patterns in America, David Portalatin, states, “It’s clear that consumers are not willing to give up on the convenience and experience a restaurant meal brings them and their families regardless of the barriers.”
Up Next: Breakfast Wars
The” disruption to routines,” to breakfasts across the industry have restaurants like McDonald’s, Wendy’s, Dunkin’, and Starbucks adapting. The Bureau of Labor Statistics reported the unemployment rate rose to 14.7 % in April, and 5.5 million unemployed workers came from restaurants. Essentially, fewer customers are out in the morning as quarantine destroys the need for a commute. For quick-service restaurants, breakfast tends to be more profitable than the lunch and dinner parts of a business day. Buying breakfast is a constant purchasing pattern for customers, especially when it comes to coffee. Mobile location analytics platform, Placer.ai, ran their data for breakfast traffic, including:
- Dunkin’ has 9.2% between 10 and 11 am in 2020, only .3% difference from 2019. (Dunkin’ CEO Dave Hoffmann states, “Sales volumes in the early morning are down, but have picked up from 10 am to 2 pm as people venture out for a break.”).
- Starbucks’ daily visits from 8 to 11 am was at 20.3%, comparatively up from 19% in 2019.
- Panera’s daily visits decreased only at 0.4% between 8 to 11 am from 14.6% to 14.2%.
- McDonald’s customer visits dropped to 12.5% in 2020, from 15% of customer visits.
- Burger King experienced a change from 11% to 9.4%.
According to Wendy’s CEO, Todd Penegor, before COVID-19, breakfast was responsible for same-store sales, increasing 15% in the launch week of the company’s breakfast menu. “While the environment encountered as we started breakfast was not what anyone would have expected, the strength of our program makes this daypart a key bright spot for us,” says Penegor.
Learning from the Mother’s Day Fiasco
Businesses across the country experienced a Mother’s Day crush from the wave of customer orders for pickup and delivery. The owner of Fannie’s Café in Chicago tried to prepare for the chaos, but customers still waited over 90 minutes for their orders. A Florida IHOP is shown through a video with a long line of customers waiting in the rain. A Pittsburgh Red Lobster had almost 100 cars in its parking lot. The local media reported that the police arrived, and a store manager came out and told the group that all orders had been canceled. Allegedly, a New York Cheesecake Factory had customers waiting about two hours for orders.
Kathy Thorpe, the owner of Pasta Faire and Francesco’s Ristorante in Florida and a 30-year restaurant professional, stated that Mother’s Day 2020 was the most challenging she had ever received. “In the future, for my restaurants, if we stay in this takeout world, busy holidays will require smaller menus.”
How has the pandemic altered your course? Click the link below for our page containing helpful restaurant resources for the COVID-19 outbreak.
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About the Author
Devyn is the Social & PR Specialist on the Marketing Team. She has a B.S. in Communication and an M.S. in Global Strategic Communication. She liked QR codes (before they were cool) ever since a two-week trip to China. She’s obsessed with true crime and enjoys quality time with her friends and family. Ask her about books she’s read, Criminal Minds, her dog-child, or her favorite cocktails!