Until widespread testing of individuals is fully operational, we really don’t know the extent of this novel coronavirus. Restaurants will be among the hardest hit segments of the economy as more stringent measures are taken to contain and significantly reduce the threat of COVID-19.
Many states are trying to mitigate its impact by restricting people in groups, including sitting inside restaurant dining areas. Quick service (QSRs) and fast casual restaurants could be in the best position to conduct a fair amount of business. Many QSR chains can get about 50% of daily sales under normal conditions.
Separately, mobile order and pay has ramped up in the last few years, especially for coffee cafes and pizza shops. This gives restaurants another sales channel that is allowable during the virus restrictions. Additionally, many restaurant offer delivery services with their own drivers or through one of several major services such as DoorDash, Grubhub, or Uber Eats.
Will these dine-in alternatives be enough to get restaurants through these unprecedented times? It depends on how long the restrictions are in place. More importantly, it depends on whether restaurant employees and delivery drivers remain healthy enough to keep on the job. This will become more evident in weeks, not days. Stay healthy out there.
A QSR article discusses more on this topic, which is excerpted below:
As a slew of states pause dine-in service around the country in an effort to stem the spread of COVID-19, with more almost certain to follow, Starbucks said Sunday it’s “made the decision to move to our next level of protocols,” an initiative that includes the temporarily stoppage of all seating, including café and patios, throughout its U.S. and Canada restaurants.
Calls for social distancing have picked up in the past 24 hours and appear poised to gains team. The CDC urged late Sunday for a nationwide halt to gatherings of more than 50 people for the next eight weeks. Ohio, Illinois, New York City, Washington State, and Massachusetts all ordered restaurants to close dine-in service. California shut down bars and nightclubs. Dr. Anthony Fauci recommended a two-week shutdown of all bars and restaurants, something he shared on CNN’s “State of the Nation,” over the weekend.
For Starbucks, the company said the switch to a to-go-only model would last at least two weeks. Café, mobile order & pay, drive thru, and delivery will still be open. Starbucks’ delivery platform included 3,500 units across 49 markets last quarter, up from 115 restaurants in the year-ago period.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group
