Article

How the restaurant industry is staying the course during the pandemic

As coronavirus is officially dubbed a pandemic by the World Health Organization, restaurant brands are doing their best to adapt.

Photo: iStock

March 12, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

By Cherryh Cansler & Shelly Whitehead/Staff Editors

In light of the coronavirus, which the World Health Organization officially declared a pandemic this week, restaurants around the globe are putting in policies to not only keep their businesses afloat but to also protect customers and employees. McDonald's, for example, said this morning that it was giving five paid days off per year to employees at its U.S. corporate-owned locations, while employees from corporate-owned U.S. stores would receive two weeks of pay if they are quarantined.

The chain also said it had stepped up in-store hygienic procedures, a move Starbucks and many other chains had taken earlier this week. In anopen letter to customers on its website, Starbucks CEO Kevin Johnson said he was prioritizing two things: the health and well-being of customers and partners while also playing a constructive role in supporting local health officials and government leaders as they work to contain the virus.

He said although the chain was maintaining regular operations across the U.S. and Canada, stores are prepared to modify operations as needed. That may include limiting seating to improve social distancing, enabling mobile order-only scenarios for pick-up via the Starbucks App or delivery via Uber Eats, or in some cases, only the Drive-Thru will be open.  

"As a last resort, we will close a store if we feel it is in the best interest of our customers and partners, or if we are directed to do so by government authorities. In any such situation, we expect store disruption to be temporary," he wrote.

A coronavirus update from the Ohio Restaurant Association is emblematic of the issues restaurateurs are dealing with as the result of the pandemic. ORA cited a Black Box Intelligence update on the impact of COVID-19 on the restaurant industry, saying, "What is expected for the upcoming weeks are sharp drops in restaurant sales specific to those locations in which major outbreaks occurred by the first week of March." 

ORA said some publicly traded restaurant stocks watched their valuations drop more than 15% Wednesday in the midst of a Wall Street sell-off that punched companies like Red Robin and BJ's Restaurants in the financial "gut."

Smaller brands feeling the heat
While business is tough for large brands like McDonald's and Starbucks, it's getting scary for smaller brands. Curry Up Now CEO Kapoor, for example, said his sales were down 10% overall last week over the previous week.

"The largest impacted store saw a 25% decline, but the worrying thing was that the weekend sales declines were trending even lower, and I feel as if mid-week last week is when the awareness and reaction went up a few notches," said the founder of the 10 unit-chain based in San Francisco. "Weekend sales declined 15% over the previous weekend."

Deliveries, however, were going better than expected with Kapoor's in-house delivery increasing 14% last week.

"What we have lost, is catering and group corporate orders," he said. "We expect a 25% decline in volume this week, so labor and food buys have been cut by 25% with a backup available on both food and labor for our stores."

Kapoor said safety is his top priority, which is why he was thinking beyond hand sanitizers.

"Because those aren't available anyway," he said.

He's requiring hand-washing and glove changes for all employees every 10 minutes. Restrooms must be cleaned every 15 minutes and employees are cleaning hard surfaces — tables, chairs and door handles/knobs — every 30 minutes. They're also deep-cleaning every night, he said.  

"We're monitoring employee health and asking anyone sick to not come in and to get checked out," Kapoor said. "We're also encouraging guests to not pay with cash and use Apple/Google Pay or their credit cards. We've thought about temperature scans for our employees, but we've put that on hold for now."

The U.S. House was expected to vote today on sweeping legislation to address the economic fallout of the coronavirus, as well. 

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.