Third-party food delivery and off-premise ordering critical for restaurants during pandemic
Published March 19, 2020
By the time of their last report Tuesday, March 17, the World Health Organization had counted over 179,000 confirmed cases of COVID-19 globally, and 3,503 in the U.S. While many industries are struggling to understand and cope with the impact to daily operations and revenues, restaurants will be among the hardest hit—especially as social distancing, city restrictions on large gatherings and several government-mandated bans on on-site dining take hold.
Restaurants feel the impact of social distancing
Whole countries have gone on lockdown, shuttering restaurants, bars and nightlife venues. And in the U.S., several cities and states have ordered restaurants and bars to limit or close their on-premise operations. So far, these include Washington, Maryland, Massachusetts, Illinois, Michigan, Rhode Island, New York, Connecticut, New Jersey, Kentucky, Louisiana, Indiana, Ohio, California, some Pennsylvania counties and cities like Anchorage, Denver, Los Angeles. On Tuesday, shelter-in-place orders were given to residents of two of America’s largest cities, in New York and San Francisco.
Some brands have responded by voluntarily closing their dining rooms. Chick-Fil-A, Starbucks, Taco Bell, Shake Shack, Zaxby’s and others instead are turning to drive-thru, mobile ordering, take out and contactless payments to try and prevent the spread of the virus. Starbucks also said it would temporarily close stores in “high social gathering locations,” such as malls or university campuses, and reduce operating hours or temporarily close select units in high case communities like Seattle or New York.
Reports show people aren’t venturing out much, anyway
According to a Coresight Research poll, 47.2% of U.S. internet users are avoiding shopping centers and malls while 74.6% said they would steer clear of shopping centers altogether if the outbreak worsens. More than 30% said they were avoiding physical stores.
Almost 40% of people are avoiding restaurants, bars and coffee shops, with 60.5% saying they will avoid them. And nearly 60% of consumers said they were concerned about dining out, with 1 in 5 “definitely” avoiding it.
Table service restaurants are being hit the hardest. As FSR magazine reports, “The industry has seen double-digit declines in recent days, with brands like Darden, Texas Roadhouse, Cracker Barrel, Bloomin’ Brands, BJ’s, Shake Shack, Cheesecake Factory, Brinker International, Dine Brands, Jack in the Box, Denny’s, Carrols Restaurant Group, and Noodles & Company all dipping between 10–20 percent. Dave & Buster’s, Red Robin, and McDonald’s franchisee Arcos Dorados have plummeted more than 20 percent. Also to track, Aramark and Sysco sank double-digits, too. As did Grub Hub.”
Restaurants are looking to delivery to shore up their business as in-person dining sharply declines
To encourage more restaurants to do business through their platforms, third-party delivery providers like Grub Hub and Postmates said they were temporarily removing fees for delivery for independent restaurants; Uber Eats shortly followed suit.
Several fine dining restaurants are trying to pivot to delivery and takeout, adjusting their menus and their operations. According to Eater.com, Seattle restaurant Canlis will “become a meal delivery service, a casual bagel shop and a “drive-thru” selling burgers and salads. Spago and Alexander’s Steakhouse will debut shorter take-out menus. New York’s Empellon restaurants are adding more to-go and catering options.
Other restauranteurs took to LinkedIn to talk about their plans for delivery. Portofino Italian Ristorante says it is considering “running strictly takeout/delivery,” while Chicago restaurant All Together Now said they were “actively amping up our efforts on delivery platforms and adding wine and other prepared meals to our offerings,” which include a wine and cheese hotline so guests can call in for pairing recommendations.
Several restaurants and delivery providers are also offering no-contact delivery options
McDonald’s, Starbucks, Postmates, DoorDash and others are trying to reduce person-to-person contact and the spread of the virus (not to mention alleviating fears about contact for consumers) by offering options like delivering to the door, leaving sealed bags at doorsteps and allowing customers to provide instructions on where to leave orders. Other cities like Atlanta and Nashville are providing delivery and curbside pickup.
But some restaurants haven’t yet seen a huge spike in delivery orders
According to an article in Eater SF, “Our numbers don’t reflect that, at least not yet,” said Korey Reynolds, director of people of Tacolicious, a San Francisco-based Mexican restaurant with five locations in the Bay Area. “For now, takeout and delivery seem to be steady, but overall sales are declining. We thought we would see a much larger uptick, but it’s not what we thought it might be.”
That’s in line with what Technomic Inc., a consulting and research firm, is finding. Saying “delivery won’t be a catchall for lost traffic,” Technomic reports that more than 30% of people plan not to leave the house or go to restaurants as often—and only 13% of those said they plan to order more delivery.
Still others in the industry are getting creative
According to a Bloomberg article, Grato, a West Palm Beach restaurant, is carrying all orders to cars waiting at the curb. Memphis’s Restaurant Iris is offering a limited menu but doing all the deliveries themselves. Sushi by Bou is offering omakase boxes for delivery.
Says Andy Rosenbloom, head of marketing for restaurant GPO and consultant service Consolidated Concepts says, “Customers have been increasingly leaning on delivery anyway. So, it’s not a bad time to shore up those off-premise programs or add off-premise programs.”
In a time of uncertainty, NCR is ready to help
NCR is committed to helping restaurants of all sizes navigate the many challenges of the coronavirus outbreak. For more information on off-premise optimization, take out and delivery options—or just for an empathetic ear and ideas to help—please contact NCR.
Our restaurant solutions experts are in the trenches with our customers, working hard to help provide guidance, solutions and recommendations.
You can find us at NCR.com/restaurants, have us call you back, call us in the U.S. at 1-800-CALL-NCR or call outside of the U.S. at 1-937-445-1936.
