Here are five COVID-19-related developments affecting the foodservice industry.
While the promise of the vaccines offers hope for the beleaguered and battered restaurant industry, it does not offset the pain many operators and their suppliers continue to endure in the near-term. Still, some bright spots continue to break through the clouds as consumer habits keep evolving to meet the realities of their day to day lives. Here’s a quick overview.
National Restaurant Association appeals for help:
More than 17% of restaurants have closed permanently or long-term, per data from The National Restaurant Association. In addition, 87% of restaurants report a 36% decline in sales. “What these findings make clear is that more than 500,000 restaurants of every business type — franchise, chain and independent — are in an economic free fall,” said Sean Kennedy, executive vice president for Public Affairs. “And for every month that passes without a solution from Congress, thousands more restaurants will close their doors for good.”
The NRA shared this data with congressional leaders in a letter. “In short, the restaurant industry simply cannot wait for relief any longer. We appreciate the efforts of a group of moderate members of the House and Senate to advance a true compromise between the competing proposals from Democratic and Republican leaders,” Kennedy says. “If this moderate plan represents a ‘down payment’ for a larger relief package in early 2021, it will provide restaurants with immediate relief to hold on through the most dangerous point in our business year.”
In addition to the letter, the NRA also shared a plan that shows how to strengthen a proposed second draw from the Paycheck Protection Program (PPP) to reflect the unique business model of the restaurant industry and highlighted other important measures in the proposal that would support restaurants in the short-term.
Segments showing potential:
Looking to the future industry development opportunities, some data from the Foodservice Consultants Society International – The Americas might offer a glimpse as to which segments show promise in the next 6 to 12 months. The top three segments over that timespan, per FCSI members, are ghost kitchens, hospitals, and senior living and its various forms. A distant fourth and fifth on this list are quick-service and fast-casual restaurants. Further positive news is the fact that consultants remain active, responding to requests for proposals. Along those lines, 72% of consultants say they are responding to 1 to 3 RFPs per week and 18% say they respond to 4 to 6 RFPs per week. Over the past 3 months, 40% of consultants report an increase in the number of RFPs they are responding to, which is twice as many as those consultants reporting a decline in this area.
Dining restrictions take on a regional flavor:
With the number of positive COVID-19 cases remaining high and hospitalizations increasing around the country, dining restrictions continue to remain a center of the plate conversation for the restaurant industry. But the flavor of those conversations will vary considerably by region. While most states and municipalities allow it, California is starting to ban outdoor dining in various regions. Pasadena was among the first California municipalities to have outdoor dining banned. And less than three months after indoor dining was permitted, New York City is facing the devastating news that the state may ban it again as early as this week. Outdoor dining in the Big Apple would still be permissible, though. Upon hearing about the potential indoor dining ban, the New York City Hospitality Alliance articulated the impact such a move would have on the city’s restaurant community. In Chicago, where Illinois Governor J.B. Pritzker banned indoor dining weeks ago, someone snitched on a northside restaurant that had been quietly serving some of its regulars in a rear dining room. The kicker: The restaurant is owned by an influential alderman, who has since promised to cease this practice, putting a decidedly Chicago twist to this tale.
Dining by daypart changes:
Prior to the pandemic, breakfast was the daypart that showed the greatest potential for restaurants across a variety of segments. But in light of where and the way people work has changed, it’s only fitting to expect consumer traffic patterns will change. A study of c-store traffic from Chicago-based consulting firm FoodserviceIP shows lunch and the shoulder periods being the biggest beneficiaries of remote working and learning. Lunch traffic, for example, is up 21% at c-stores since the start of the pandemic. And late-morning meal/snack-related traffic is up 8% since the start of the pandemic. In contrast, dinner traffic is down 9% and late-night meal/snack-related traffic is down 10%, per FoodserviceIP. Some of this is likely to change when the vaccine becomes more widely available but that is many months from now. Until people start returning to their workplaces on a more regular basis, and working from home less, FoodserviceIP expects business to continue to flourish in the middle of the day.
Cheers to the governor:
Over the past nine months, elected officials have drawn the ire of restaurants and other hospitality-related business while trying to slow the spread of the coronavirus. Michigan brewery, The Rake Beer Project is one operator coming out in support of its state’s governor. In support of Michigan Governor Gretchen Whitmer’s handling of the COVID-19 crisis, the brewery released Big Gretch, a dry hopped saison. The cans featured Whitmer rocking a pair of Cartier shades. So how was this received by the beer-drinking public? Available in four-packs, the beer sold out rather quickly.
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