Three ways Covid has changed the restaurant industry


Editor’s note: Tune in to CNN this Sunday at 8 p.m. ET to watch “Restaurant Nation: What’s Changed?” An episode of “The Whole Story” with Anderson Cooper featuring celebrity chef Bobby Flay, to see how the industry is adapting.

In March 2020, a lot came out American restaurants have had to close their doors During the early days of the covid pandemic according to local restrictions. Now, more than three years later, it’s a program The restaurant industry is back. But the pandemic has led to some changes that are here to stay.

In the early days of the pandemic, people used to eat their restaurant food at home. Today, they’re back in restaurant dining rooms—but they still prefer getting their meals via drive-thru, window pick-up, or delivery than they did before. Meanwhile, restaurants are adjusting not just to changing consumer behaviors, but to new industry conditions, such as a drop in available workers after several exits from the sector in recent years.

Here’s how things have changed.

Dining rooms shrink or disappear

Before the pandemic hit, Esther Choi’s Korean restaurant, Mŏkbar, in Manhattan had 20 seats versus 20, and now, those seats are gone.

“After the pandemic when I decided, we’d just do quick service,” Choi told Chef Bobby Flay on an episode of “The Whole Story” with Anderson Cooper, about how restaurants are adapting to the new reality. The episode airs Sunday, August 13 at 8 p.m. ET on CNN.

She said this decision led to an increase in sales. Mŏkbar also continued to sell meals that customers could reheat at home, and to deliver meal kits and kimchi nationwide. “I completely reconsidered the company’s model,” Choi said.

Esther Choi and Masaharu Morimoto at the National Arts Club on October 15, 2022 in New York City. (Photo by Roy Rochlin/Getty Images for NYCWFF) – Roy Rochlin/Getty Images for NYCWFF

“The pandemic has taught consumers that you can still get a good meal, you don’t have to eat it in a restaurant,” said Joe Pawlak, managing director of Technomic, a research and consulting firm focused on the food industry.

Restaurants across the country are finding that their businesses can thrive outside of the dining room.

Local favourites, such as NYC Levin’s Bakery And Carbonea small chain of upscale Italian restaurants, began selling boxed versions of its signature products online and in stores shortly after Covid hit, and continues to do so.

And Restaurant chains are experimenting Many of the new, smaller formats are designed for mobility demands, along with completely skip-seat driving.

McDonald’s (MCD), for example, recently introduced a smaller format concept called CosMc’s. In the past, before delivery was so popular, McDonald’s said, small restaurants were essentially “off-limits.” (MCD) CEO Chris Kempinski during a recent analyst call.

other fast food chains, Like Taco BellThey test drive-ins that have more hallways and larger kitchens, and no dining rooms at all.

Delivery is here to stay

When covid forced many restaurants to close in 2020, Many quickly set up delivery services. Over the past few years, customers have developed a taste for cucumber.

For many restaurants, delivery has been a lifeline, however which came at a high cost. Delivery providers, such as DoorDash (dash)Uber (Uber) Eats and others stepped in when demand was high, providing an option for restaurants that had not previously offered delivery. But they charged high commission fees on the restaurants’ profits, along with fees for customers.

Some restaurant operators have ended up partnering with smaller service providers who offer better prices or They were more attentive. In the end, the major players offered restaurants more choice, including levels of service, at lower costs.

Delivery workers wait outside a restaurant on July 07, 2023 in New York City.  (Photo by Spencer Platt/Getty Images) - Spencer Platt/Getty Images

Delivery workers wait outside a restaurant on July 07, 2023 in New York City. (Photo by Spencer Platt/Getty Images) – Spencer Platt/Getty Images

However, Pawlak said delivery isn’t a great deal for most restaurants.

“I think diners still tell you that to them [third-party delivery] … still a difficult proposition, from a profitability standpoint. “

He said some restaurants will cut off access to delivery on weekends or during busy times, when they have lots of discounts in dining rooms.

Even chains that were offering deliveries before the pandemic are under pressure due to the growing trend.

Domino’s (DPZ)that made plugging her calling card for years, He had difficulty finding delivery drivers In the midst of crushing new competitors. For a while, I stopped partnering with third-party delivery providers. But in July, I broke down, Seal a deal with Uber Eats and Postmates to appear on their platform but not use their drivers.

Whether restaurants like it or not, “delivery is definitely here to stay,” Pawlak said. But “I think we’re starting to see a slowdown in delivery,” he noted, because for customers “the price has become astronomical.”

With higher prices and customers Already cutting back on spendingsome may begin to turn to drive-through or commuting options, leaving delivery for special events.

However, Doordash reported in August that in the second quarter, total orders grew.

Too many jobs, too few workers

early in the pandemic, Many restaurant workers have been laid off. Others, fearing for their health or the health of their loved ones – or Simply burnt due to stressful circumstances – I looked for other jobs And hold on to them.

Now, more than three years after the pandemic hit the United States, some restaurant jobs remain unfilled.

The size of the restaurant workforce remains below pre-pandemic levels. said the National Restaurant Association in August, After the July jobs report. As of July 2023, food and beverage venues had 64,000 jobs – or 0.5% – below peak employment in February 2020.”

Some restaurant operators have reconsidered their business models during Covid, aiming to offer workers more benefits, consistency and transparency.

Israel and Bonnie Morales from Kachka in Portland, Oregon, September 24, 2020 (Leah Nash for The Washington Post) -- Leah Nash/The Washington Post/Getty Images

Israel and Bonnie Morales from Kachka in Portland, Oregon, September 24, 2020 (Leah Nash for The Washington Post) — Leah Nash/The Washington Post/Getty Images

Bonnie and Israel Morales, for example, scraped tips at their restaurant, Kachka, in Portland. They’ve instituted a $25 minimum wage and begun charging a mandatory 22% service fee to offset costs, they told Flay during Sunday’s episode of “The Whole Story.”

Donna’s, a restaurant and bar in New York City, closed during the pandemic and reopened as a worker-owned co-op.

restaurant chains They raised wages, too A little bit in an effort to attract and retain workers. But many of these they have at the same time They strongly opposed the proposed legislation It could raise the minimum wage for fast food workers.

Pawlak said that the industry in general should “do a better job of showing people … that this is a good profession”. “I think we have to start stepping up in terms of paying people better.”

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