Article

The Big Shift: Transition to 'delivery only' tough, but potentially lifesaving

The pandemic that has now got the U.S. restaurant industry in a stranglehold is forcing many brands to delivery-only operations, which not only is requiring extra manpower by some brands, but a lot of new practices by all sized brands as they seek to remain viable.

Shifting or adding to delivery? Check out this guidance from experts in the field (photo: iStock).

March 24, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

The transition to delivery almost exclusively in the U.S. restaurant industry is the order of the day, since every day new jurisdictions across the U.S. issue shelter-in-place orders that leave consumers with only one way to get their restaurant fixes: order online or by phone for delivery. Indeed, the biggest pizza brands have started something of a one-up-manship war to see who will hire the most new team members to meet this need. 

Just in the last several days, the big three publicly traded brands of Domino's, Pizza Hut and Papa John's have announced that collectively they will hire some 60,000 extra team members to handle increased demand. Domino's started the charge last Friday, announcing it would hire 10,000 new team members to meet the demand. That was followed early Monday by competitor Papa John's, which pledged it would hire 20,000 for similar purposes at that brand, as well as initiate contactless delivery. Then a little later Monday, Pizza Hut said on its blog it will hire 30,000 to meet its and its patrons' needs.  

Pizza Hut said on its blog that it is not only hiring, but enacting new procedures to meet the changing consumer demands in the current pandemic-riddled U.S. and elsewhere. A spokesperson said that meant the brand will require more cooks, shift leaders, restaurant managers and virtual call center agents, while Pizza Hut has said it will also be hiring drivers.  

All three large publicly traded pizza brands are now also offering contact-free delivery for customers who choose that option when ordering and pre-paying. And, at some Pizza Hut stores, customers can opt for curbside pickup to avoid delivery fees. 

"Given the increased demand we're seeing for delivery, we're hiring new team members to help us feed America," said Kevin Hochman, president of Pizza Hut U.S. in a statement about that company's increased hiring needs.

A brand spokesperson also said in an email to this website that the onboarding of new employees was adjusting to fit increasing demand. 

"While candidates are still required to take all of the same trainings, we've expedited the onboarding process by reordering trainings so that new hires take their safety and delivery courses right off the bat," the spokesperson said in an email. "This has allowed the process to become nearly three times faster, getting drivers out on the road quickly and safely."

But pizza brands aren't the only ones playing this heightened delivery game. In the QSR realm, for instance, Nathan's Famous has stepped up its operations on the delivery and carryout sides of its operations to accommodate the increased business there, according to Nathan's Senior Vice President, Restaurants James Walker. 

"Some examples of the steps we are taking to help the brand include working to launch a network of managed cloud kitchen platforms. …" Walker said in response to a question from this website. "We are also in the process of looking to partner with independent restaurant owners and expand on the 'ghost kitchen' concept, where we would allow solid, reputable restaurants to sell Nathan's products through aggregators."

Walker said delivery has been available via third-party providers for some time, but more operators are enrolling "daily," he said. The brand is also waiving delivery fees, and offering "value bundles," as well as other discounts.  

"We have recently implemented in our company restaurants the option of 'curbside pick-up,'" Walker added. That's "where our customers can call ahead, place their order, and one of our Nathan's employees will deliver their food to their car door. This new curbside pick-up opportunity is being made available to our system." 

As smaller brands struggle to deliver, options emerge

But smaller brands are hustling to adapt — almost overnight — to these increased needs for delivery amidst COVID-19 precautions, according to Joe Thull, the head of North American operations for cloud-based delivery platform Radaro. The brand specializes in rapidly onlining brands that want to add or augment delivery using their own or contracted workers. The company is hearing from a lot of brands in relatively desperate need now. 

"Restaurateurs are clamoring for solutions to help them adapt to a new normal, specifically that they must have a delivery offering to survive in the current economic climate," Thull told this website in an interview. "They are grappling with a fundamental shift in their business model, moving toward pickup and delivery as primary mechanisms for selling to their customers. 

"This requires a business process and workforce restructuring, all while navigating the tricky waters of heightened food safety sensitivities. They're scrambling to acclimate to a new landscape, while attempting to mitigate financial losses."

According to Thull, most U.S. restaurant brands don't currently have delivery in place or outsource the service to third-party providers, which he said might have worked financially when those same brands had enough dine-in customers to support the bottom line. But he believes that model becomes more challenging when restaurant businesses are already being financially pressured so intensely by sales decreases overall. 

Of course, Radaro does supply a restaurant-owned system for delivery, so it's natural that Thull advocates for this approach over what might be a quicker path to getting delivery up and running through third-party providers. But he cautioned that quickly jumping to that path may end up a poor decision in the long term for some brands. 

"Brands may think to turn to this model as a bridge back to normal, but they may be waiting longer than they think, which could end up being too great a financial risk," Thull told this website. "It also presumes that the current crisis won't have lasting implications, which it very well might. Therefore, as a restaurant brand, owning the delivery system is critical to adapting to the new environment and changing consumer needs. The quicker they acclimate, the better off they'll be."

The third-party delivery providers this website contacted failed to respond to the questions addressed in this story, so it's unclear how or if they would counter those assertions. But operationally, Thull said the time may be right now for brands to begin their own delivery systems, since slowed sales have forced many to lay off or terminate staff. 

"A big advantage of owning the delivery system is that it gives restaurants an opportunity to save jobs by repurposing existing employees as drivers within a new system and business model," Thull said. "This is also crucial in controlling the customer delivery experience, from food preparation through to delivery.  

"Brands can retrain current employees and manage the food quality standards from order to delivery. Brands can better monitor food quality standards and food handling safety protocol with respect to social distancing. The customer delivery experience is critical in protecting one's brand in this climate."

Delivery ops shift demands more vigilant food safety practices

That experience has been a sticking point with third-party delivery providers for some time and remains a concern. Restaurant food safety experts at Steritech also emphasized that the heightened packaging, training and sanitation needs of a delivery-focused operation should be gaining solid attention from all brands shifting or even just retaining delivery operations in this current industry environment. 

Steritech Technical Consultant Paula Herald said this is an especially important time for restaurants to review practices and update or change as needed when it comes to the way everything from payments to food and packaging is handled as they relate to delivery practices. 

Herald provided these tips for maneuvering around food safety threats for restaurants transitioning to delivery and/or takeout only for the time being:

• Packaging: Ensure it can withstand the rigors of carryout and/or delivery and continues to protect food throughout its journey, while also including some way for customers to see when packages have been tampered with in any way. 
• Cash/payment handling: Designate separate staffers to handle cash/credit cards who will not also be packaging food, preparing drinks or condiments, which should also have a designated staffer whose duties do not include payment handling. Put practices in place to divert as much payment to mobile/online pre-pay as possible.
• Pickup location sanitation: The area designated for food pickup should limit customer contact and be frequently disinfected, with team members always wearing gloves to handle these tasks. Preference here is for a park-and-wait location where a team member delivers food to vehicles. Third-party delivery providers should ensure regular disinfection of delivery containers, vehicle surfaces and hands, as well as providing a designated pickup place for customers to limit contact.
• Limit customer in-restaurant access:Ideally, customers should not enter restaurants, but for those which offer pickup that requires customers to leave their vehicles, Herald advises marking 6-foot intervals on the floor to maintain social distancing.  

Of course, even with all these efforts to quickly transition restaurant businesses to delivery and low-contact carryout, many brands are still finding it a necessity to discontinue operations. Earlier this week, McDonald's in the U.K. and Ireland said it was closing its doors for the immediate future. 

And in New York City, many of that restaurant towns' brands are doing the same, according to the New York Post, less than one week after such foodservice brands were mandated to transition to takeout and delivery only. Many brands said that sales have just made even that operational model unsustainable in this pandemic-ridden world. 

In this respect, brands in the more dine-in-focused sectors like casual and fine dining have paid the steepest price. In fact, some restaurateurs and restaurant industry investors are concerned the Big Apple's dining scene will be forever changed by the pandemic. 

"Cafeteria never shut down during 9/11, or the Lehman collapse, and got a car-size generator to stay open after Hurricane Sandy," said Manhattan's Cafeteria and Empire Diner investor Mark Amadei in the article. "This situation is apocalyptic for the restaurant business."

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.