A 4-Part Weekly Series by Buyers Edge Platform
Of all the industries negatively impacted by the COVID-19 pandemic, the restaurant industry may have been hit the hardest. The one-two punch of dining room shutdowns and major supply chain issues dramatically slashed revenues. The National Restaurant Association estimates more than 110,000 restaurants in the U.S. closed for business in 2020 with more than 2.5 million jobs erased from pre-pandemic levels. Operators that were able to survive had to be smart, nimble, and a little lucky. As more Americans get vaccinated and restrictions on dining begin to be relaxed, it’s time to look at ways the pandemic changed the restaurant industry, why some of those changes won’t be changing back, and how operators can be better prepared to handle it all.
Buyers Edge Platform analyzed more than $12 billion in purchasing data from January 2020 to now, and also surveyed 500 Americans about their dining habits. From this data and our own in-depth industry knowledge, we’ve come up a list of four ways the pandemic changed the restaurant industry that won’t be changing back any time soon.
Off-Premise Dining is Here to Stay
The future is contactless. The less touchpoints, the more safe your customers feel. Customer perception has changed and even though indoor dining has returned, the comfort and convenience of being able to eat your favorite restaurant foods is not going away. Operators are finding new avenues to drive sales through takeout and delivery. With the adoption of off-premise and delivery comes an expanded reach of new customers who would not necessarily find an operation if it wasn’t close to their home.
According to our survey of consumers, the pandemic drastically changed how (and how much) people order food from restaurants.
- 25% say they ordered less food overall from restaurants during the pandemic.
- 46% say when they ordered food, they ordered more carry out and delivery during the pandemic.
Restaurant ordering overall is going to pick up in the next 12 months.
- 33% of consumers say they plan to order more food from restaurants in the next 12 months.
- Only 11% say they will order less.
Off-premise ordering will continue to be a big part of the industry.
- Only 7% say they will order less carryout in the next year
- Only 9% say they will order less via delivery in the next year
The Buyers Edge Platform Data backs this up. Orders for disposable containers spiked in the spring of last year as restaurants across the country closed in person dining. And even as many areas have opened back up to in person dining, disposable container orders remain high.
In April 2020, in the heart of the shutdowns, disposable container orders were up 53.5% over pre-pandemic levels.
Orders still remain elevated, with February 2021 orders still 43% higher than pre-pandemic levels.
But the shift to more off-premise ordering is not without problems. Even though consumers say they’ll order more carryout and delivery, many still prefer the traditional in person experience.
While many plan to continue ordering off premise, there are some things about it that they don’t like. We asked customers what annoys them the most about ordering takeout and delivery.
- The biggest complaint was that the food arrived cold, with 27.4% giving that as their top complaint.
- The next two complaints, each with 16% of the vote, were long wait times and incorrect orders
- The poor quality of to-go and delivered food came next with 7.8%
- 4.57% say their biggest complaint is the added cost associated with delivery options
- Then came complaints about packaging, either too much or that it was not made from green materials. That accounted for 3.7% of the complaints.
- 13.6% said they wouldn’t change a thing, and that they were happy overall with the to-go and delivery experience.
What should operators take away from this data? The encouraging news is that some of the biggest complaints can be addressed. While it will always be a challenge to have food at home be as hot as food delivered to the table fresh out of the kitchen, many operators are taking steps to ensure better temperature management throughout the off-premise process. This includes investing in higher quality containers that keep food warmer longer. And equipping delivery drivers with better insulated bags to store food in while they drive.
As restaurants dealt with the challenges of pivoting to much greater off-premise ordering, some of the growing pains included longer wait times and incorrect orders, which were the next two highest complaint categories. Now that the “new normal” has just become normal, those logistical errors are likely to decline.
Photo credit: Michael Browning/Unsplash
Tune in next week for part 2 of this series.