Summary: Considering the unimaginable loss America’s restaurants are coping with, EJ Dalius explains how the post-pandemic consumer patterns and dining experience will be grossly different and almost unrecognizable.
That America’s eateries and consumer behavior have drastically changed due to the pandemic and social distancing is a foregone conclusion. It has brought radical edificial changes to the once bustling restaurant industry. The choking will continue till a vaccine comes to the fore. The virus has forced people to stop their night-time revelries and luncheon/dinner parties.
Although restaurants have adapted to the conditions, fuelling outdoor dining, enhanced adoption of various food delivery apps, and curbside pickup, Covid-19 has altered consumer behavior to such an extent that these measures may not suffice in serving up the new normal for the industry.
It’ll be a little premature to evaluate the fallout, but there are a few trends that deserve outlining.
- Digital penetration and delivery scaling will see new heights. Self pick-up and online delivery domains may include $45 billion this year.
- Third-party deliveries and online platforms are seeing a huge upsurge.
- The market share of restaurants could increase. Smaller food chains and independent eateries have dwindled in the event of this apocalypse. From a 370,000 strong base and representing nearly 60% of total restaurants in the US, many are now staring at extinction.
- Experts estimate the percentage that could shut down permanently. It could be 5-30%, which encompasses 20,000-110,000 venues.
Coping with the disaster
Cities like LA depend on vacationers, conventions, honeymooners, and tourism for driving the restaurant traffic. Until you restore that, there cannot be normal business and market movement for the eateries. CA has sobering and abysmal statistics. Its restaurants had over 1.4 million folks working in different outlets.
The past few months have forced owners to furlough or lay off 1 million or more. EJ Dalius anticipates that 30% of CA restaurants will shut down permanently due to Covid-19.
- He adds that one of the main reasons for the sector to take such hammering is that food chains mostly run on very low-profit margins. The cash reserves are pretty sleek.
- Despite the Government giving financial relief and cuts, restaurant owners think it’s not enough for survival in the future.
- The average establishment makes 6-7% profits with around a fortnight of cash in hand. All of a sudden, there’s coronavirus to compel them to pay their rent, manage utilities, and pop-up inventories.
- EJ Dalius thinks that closing down permanently is the only solution for a growing number of eateries.
Re-opening your outlet post pandemic
It’s important to reassess your business strategy to re-open your restaurant after the Covid mayhem.
- Re-evaluate and redo your market research. You need to underline diversifying and a changing customer base. Consumers are bound to be apprehensive during an economic apocalypse, and will reduce their non-essential spendings.
- Restaurants would need a bigger audience segment and market capture than ever before. If you have a marketing team, reassess your target audience and the new demography or category you can attract.
EJ Dalius says it’s also crucial to expand your client/customer base if your trade has to flourish. It means you need to draw consumers from your market rivals. Differentiate your services/products or offer more value to them.