Unfortunately, COVID is still as prevalent an issue as it was back in April. Overall, the state of foodservice looks much more promising and uplifting today than it did 8 months ago. We’ll get into the reasons why, but it’s clear that restaurants have learned to pivot and meet customers where they are. From contactless service experiences, new employee protocols, and strategies to keep flexible far into the future.
The state of the industry today
The restaurant industry as a whole is still hurting from the limitations the pandemic brought this spring. However, the summer showed hopeful signs of improvement for quick-serve and fast-food operations. According to Rally for Restaurants, that trend seems to be extending into the fall season, with QSRs outperforming full-service revenue by 5.5% just since September 1st.
The chart below from Sense360 shows year-over-year change in the share of restaurant visits by market. You can see that quick service and pizza establishments have both kept a steady hold, even through the uneasy days of early and peak COVID. These trends seem likely to continue into the late fall and winter months, as other foodservice establishments can no longer rely on outdoor dining. The flexibility and lower-touch structure fast food and QSR operations offer are better configured to endure constant change.
One thing helping restaurants of all types adapt is an increased reliance on digital app solutions. From ordering to delivery apps and contactless payments, adoption of digital tools is essential and has proved to be effective. Restaurant Dive reported that digital orders have skyrocketed in the past year. “Prior to the coronavirus, one out of 20 orders were done digitally. Now, one out of five orders are digital…”
While the beginning of COVID required an abundance of caution from customers who mostly opted to stay home, the past few months have seen shifts to a past sense of normalcy. As the virus is understood more, consumers are comfortable eating at outdoor establishments and being indoors with proper mask usage- including in office buildings.
Sense 360 reported that more people have been returning to work and regular commuting schedules. “In April, 55% of full-time employees reported going into the office, vs August, when 63% report going into the office.” This is good news for QSRs and fast-food operations offering breakfast and coffee since the breakfast daypart has struggled more than anticipated during the pandemic.
You can see in the chart below that breakfast sales have improved significantly since peak COVID days, which can be attributed to the return of these daily commuters.
Adjustments and adaptability
While things are still changing for the restaurant industry as the pandemic continues to rage on, nothing seems as uncertain as the first few days into the coronavirus. Immediate closures of restaurants and businesses called for instant adjustments, leaving more time for panic than strategy. As the summer offered more time to understand this new normal, many industries have gotten a better handle on what they need to change in order to be successful. The QSR industry has found their stride and doubled down. Restaurant Dive reports that “Since March, 67% of operators added curbside pickup, 27% added 3rd party delivery, and 17% added in-house delivery. 3% added drive-thrus.”
And the investment in these alternative service models isn’t slowing down any time soon. According to QSR Magazine, drive-thru sales made up 42% of all restaurant visits from April to June. Major QSR and fast food brands have announced plans to build out their drive-thru and delivery capabilities even more in 2021.
Wendy’s shared interest in drive-thru only restaurants for the new year while Sonic, Taco Bell, and Chipotle have released new restaurant designs that allow for dedicated mobile order pickup lanes, and kitchen designs that offer better working conditions for employees while increasing staff efficiency. President of Sonic Claudia San Pedro said, “…what we’ve seen is with the initial kitchen design that we are able to move at least 62 new transactions a day in a faster time period…the faster we can serve our guests, the more guests that we can serve and provide that experience.”
Squadle customer Mark McBee shared his plans to continue investing in a more optimized drive-thru experience, a new lobby design to allow for easier social distancing, and technology that allows for contactless payment.
Continued struggles
Although sizable improvements have been made, there are still some challenges for the industry ahead. The late night service daypart was hit the hardest in peak COVID times, and hasn’t bounced back yet, as the chart below reflects. City curfews and shuttered nightlife are contributing factors.
While there may be uncertainty in the months to come, the recovery the QSR industry has seen over the past few months is remarkable. Customers have shown that they will continue to patronize loyally, as long as your operations are running safely and seamlessly. The ability to be nimble and adaptable will continue to be a focus for operators until the pandemic is safely behind us.
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