When COVID-19 Ends, Here’s How Restaurants Will Win
April 2020 QSR Magazine (A monthly restaurant industry magazine).
Datassential released its latest 1,000-consumer report Thursday, titled “
Money Matters,
” exploring how restaurants can begin to address customers’ financial anxieties, understand how people view their situation, where they’ve cut back, and where their money will go when recovery begins.
Who is going to benefit?
“When consumer budgets do loosen up, it appears people will rush back into social environments. This is where full-service restaurants stand to benefit the most, but it could take a while to get there, Datassential cautioned.”
“People will emerge concerned about ordering too many high-margin ancillaries that sit-down operators historically use to drive up checks, such as alcohol, appetizers, and desserts. They’re a little more likely to cut back on alcohol (either with a meal or going out to bars) and on coffee away from home than they are to add those drinks back into their routines.”
“Even when we’re no longer sheltering in place, Datassential said, nearly three-quarters of consumers across all generations will retain many habits developed during quarantine, from stocking up on essential groceries to being mindful of health and sanitation practices.”
“Gen Z/millennials and Boomers differ, however, when it comes to money. More than two-thirds of younger consumers are more likely to maintain specific budgets, the company said, adopt frugal tactics, or switch to cheaper brands, compared to fewer than a third of Boomers who would do the same. Boomers are also significantly less likely (73 percent) to order more takeout and delivery post COVID-19—perhaps a lingering attachment to socialized dining, Datassential said.”
“Which of these statements will be true when social distancing eases after COVID-19.”
- A restaurant’s cleanliness and food safety will matter more to me after COVID-19: 76 percent (if this isn’t already on the recover whiteboard, put it there).
- I’ll keep a stash of essential groceries on hand, just in case this happens again: 72 percent
- I’ll avoid crowded places: Even if the government says it’s safe, I won’t believe it: 69 percent (this is proof that it might be wise to cut back capacity for a bit. A way to combat the possible sales loss could be to expand hours of operation and grow into other daypart. Say, start a late-night program or promote breakfast heavier).
- I’ll still avoid self-serve food like buffets, salad bars, etc.: 66 percent
- I’ll have a specific budget in mind before going to the grocery store: 56 percent
- I’ll try to save money by buying groceries in bulk more than I used to: 56 percent
- I’ll have a specific budget in mind before going to eat at a restaurant: 55 percent
- I’ll stick with what I know and NOT try new restaurants or menu items: 52 percent
- I’ll maintain my current usage of takeout and delivery: 40 percent
- I’ll switch to cheaper brands of food from the grocery store: 38 percent
“Consumers will pay attention to how restaurants treat employees pre- and post-COVID-19. Datassential found that Boomers were most concerned with getting laid-off people back to work. Younger consumers were open to a wider array of tactics. Millennials were more likely to believe front-line staff should be paid like “essential workers,” while Gen Z was even more progressive, ranking health care as their top issue and supporting subsidized child care and unionization for restaurant workers at much higher rates.”
“It will be vital for restaurants to understand consumers’ desires to assist restaurants. Most will look to things that require little incremental effort, like tipping more. There will be a balancing act between asking consumers for help and just letting it happen. “
“Half of Boomers in Datassential’s study said they plan to tip more, while nearly half of them would try to visit restaurants more. Gen Z and millennials, generally feeling less financially secure, were more likely to use their social circles on restaurants’ behalf, such as praising a place on review sites or getting bigger groups together to dine out.”
“This will be a time where understanding your core user is key. Perhaps if you skew younger diners, come up with some promotions or themes around group and social events. Let the user-generated content and engagement chip in.”
What will keep consumers from eating at a sit-down restaurant when social distancing has been eased?”
- Health risk / still scared to get infected or spread it to others: 43 percent
- Risk of contact / distance to other people (restaurants will be too crowded): 42 percent
- Risk of contact with staff (people handling my food, they could be sick): 34 percent
- Economic uncertainty / wanting to save money: 33 percent
- I’ve come to prefer cooking and eating at home since coronavirus: 23 percent
- My favorite restaurants closed permanently during social distancing: 21 percent
- Risk of food safety (improper cooking technique / temperature): 17 percent
- Wanting to eat healthy / lose weight (after gaining weight during coronavirus): 16 percent
- No concerns about eating at restaurants after social distancing is eased: 16 percent
- I’ve come to prefer getting restaurant meals to-go or delivered since coronavirus: 13 percent
The good news is the top three points are all things restaurants can address head on through improved operations, training, and direct marketing efforts.
Some More Positivity
Despite all their concerns, consumers still expressed willingness to spend more at restaurants once this is over, Datassential’s study found.
Across the board, the most compelling motivation was the desire to help restaurants recover from months of eliminated dine-in traffic and economic instability. This was especially strong among Boomers (41 percent) and less so for Gen Z (23) percent, who gravitated more to trying new and exciting dishes they can’t create at home.
While the differences were small, millennials proved more willing than any generation to shell out for expansive, upscale, healthful, and/or locally sourced ingredients. “No longer just a commonplace activity, dining at restaurants seems more like a luxury with each passing day,” Datassential said.
“Once social distancing eases, what will cause consumers to spend more at restaurants?”
- Wanting to help restaurants and economy recover: 35 percent
- Wanting to socialize more: 25 percent
- Foods I couldn’t easily make at home: 24 percent
- Hosting special occasions at restaurants: 22 percent
- Trying new and exciting dishes: 22 percent
- Tipping servers ore generously than before: 22 percent
- Healthier foods and beverages: 17 percent
- More expensive restaurants that go the extra mile to ensure guest safety: 17 percent
- More expensive restaurants that focus on locally sourced ingredients: 11 percent
