Although Covid caused many restaurants to struggle, some restaurants can use this hardship as a means to adjust their long-term strategy to better cater to consumer’s needs. To evaluate where restaurant strategies are pivoting, the Restaurant Franchise Group at TD Bank conducted a study of 250 restaurants. First, it is no surprise consumers overwhelmingly desire a contactless experience. Restaurants adapted their long-term strategy accordingly by providing mobile order along with off-site delivery.
In turn, restaurants must also begin to plan how they will account for third party delivery fees, employee bases, and overall lease profile. Next, preferred payment methods have changed. Many consumers now value quick, easy, and contactless payments. Restaurants responded by implementing non-traditional payments, such as mobile pay, cloud-based POS systems, and P2P apps, as an available payment method. Finally, Restaurants are rethinking their real estate.
Nearly half reported that they plan to reduce or have already reduced the number or size of their franchise locations. As more and more consumers are preferring curb-side pick-up or delivery over dine-in, restaurants are wise to facilitate these capabilities. With vaccine rollout on the horizon, restaurants will hopefully see both a return on their investments as well as a slight return to normalcy.
Attached below is an excerpt from the QSR Article where you can find more data and insights:
The restaurant industry has been hard-hit by COVID-19. According to the National Restaurant Association’s September 2020 report, one in six restaurants closed permanently or long-term as COVID-19 restrictions evolved. These restrictions, which initially resulted in temporary closures, later allowed for outdoor dining and indoor dining at limited capacities. Restaurants will likely continue to struggle throughout the colder winter months as we see an uptick in COVID-19 cases nationwide.
However, as we have seen throughout the pandemic, restaurant owners and operators are creative. They will continue to adapt to cater to consumer preferences and rethink their operational models to enhance consumer confidence. If restaurants pursue this positive, flexible mindset, they can use this time as an opportunity to re-evaluate their operational model and determine how they can adjust their long-term business strategy.
Overview by James O’Brien, Research Analyst at Mercator Advisory Group
