The question on Firebirds Wood Fired Grill’s VP of marketing Stephen Loftis’ mind is one many operators have asked since the onset of COVID-19. Why have restaurants felt like the proverbial punching bag?
Back on March 16, President Donald Trump shared guidelines to flatten the coronavirus curve, called “15 Days to Slow the Spread.” In the seven-point document was the following message, “Avoid eating or drinking in bars, restaurants, and food courts—use drive thru, pickup, or delivery options.”
At that point, a dozen states had ordered restaurants to suspend dine-in service, triggered mainly by unyielding St. Patrick’s Day crowds. The CDC asked all businesses nationwide, including restaurants and bars, to impose capacity limits. The White House’s March 16 statement called for gatherings of fewer than 10 people, much stricter than the CDC’s previous 50.
The ball tumbled quickly after that, as states from coast to coast and everywhere in between mandated dine-in closures and sparked the rapid pivot to takeout and delivery you see today.
According to Restaurant365, March 11 was the first tipping point for restaurants thanks to a bevy of COVID-19 news, including the NBA suspending its season and actor Tom Hanks, along with his wife, Rita, sharing they tested positive.
You can see this in the chart below.
Then closures surged in the week of March 22 (as states put in orders), with New York City alone hitting a staggering 70.4 percent.
Brands that remained open under a limited capacity saw a 68 percent decrease in year-over-year sales on March 22. In the week ending March 29, year-over-year sales for open restaurants fell roughly 60 percent, the company said.
All graphs from Restaurant365
Black Box Intelligence’s data looks pretty similar, with same-store sales plummeting north of 60 percent in the week ending March 27—a 2.1 percentage point drop from the previous week.
In sum, the middle of March, when the “don’t eat at restaurants,” message compounded early closures and concerns, marked the onset of one of the steepest revenue drops in modern retail history. While still early, it’s likely COVID-19 will end up being the single greatest disruption restaurants have endured. The National Restaurant Association Thursday estimated March and April combined could result in $100 billion lost in revenue, with seven million jobs vacated. In just the next two weeks, the Association said 15 percent of restaurants might permanently close.
Going off The NPD’s 2018 figure of 660,755 restaurants, we could be looking at more than 99,000 closures, although it’s unclear if the Association’s estimate is limited to just chain and independent restaurants (as the NPD count is), or if it includes a broader scope of foodservice, such as non-commercial. Either way, it’s a significant and troubling slice of America’s second largest private sector employer.
For Loftis, the debate isn’t so much about closing restaurants and flattening the curve—that’s a necessary reality—but why dining concepts have absorbed such a swifter blow than grocery stores?
“Obviously you don’t poo poo the grocers and what they’re doing, but man, it just feels like we’re the redheaded step child for whatever reason,” he says.
Essentially, why do the vast majority of Americans consider grocery stores safer than restaurants?
In the first Datassential coronavirus report, back on March 12, which feels ages ago, the company asked 1,000 consumers, “thinking of COVID-19, which do you feel safer eating?”
Almost 90 percent (89) picked grocery stores/food from home. Also, 69 percent of people said they planned to increase how much they cook at home. That as 54 percent expected to decrease restaurant visits. And this was before the March 16 message landed.
By March 24, to the question, “which of these venues are consumers trying to avoid getting food from,” 29 percent of people said ordering from a restaurant for pickup. Thirty-one percent said restaurant delivery and 28 percent and 31 percent were trying to stay clear of drive thrus.
Grocery stores? Just 16 percent.
Only three days later, Datassential presented this dilemma: “How risky do you consider each of the following places to get food?”
In the “too risky,” distinction, fast food came in at 30 percent; fast casual 37 percent; fine dining 45 percent; and casual sit-down restaurants 52 percent.
Grocery stores? In the same ballpark as before—17 percent.
There are a few things at work, and not all of them are tied to perception. The FDA recommended customers should buy enough food for a week or two at a time. You simply can’t do that in a restaurant.
There are scores of people who don’t want to leave the house at all right now, even to go grab pickup. So they’d rather stock up as much as possible and lock the front door.
Some people don’t trust delivery drivers (this is something that affects grocery orders, too, although that’s still surging well above normal levels in recent weeks). Black Box said Thursday, for two consecutive weeks, guest satisfaction for takeout has grown more positive while delivery satisfaction tracks more negative. It added grocery stores sales stabilized a bit in the period leading up to March 27, with year-over-year growth of 15.5 percent. The previous period it soared 73.6 percent. This is likely the result of people trying to make their last trip’s haul last, to the FDA’s early April two-week suggestion. Online grocery sales growth remains high, however, up 62.3 percent.
Experts continue to say deliveries are safer overall than getting food in person, but scheduling is no easy path. Windows close in a hurry and there isn’t always time to plan. Andrew Janowski, a pediatric infectious disease physician at Washington University School of Medicine and St. Louis Children’s Hospital, told The Wall Street Journal, consumers should, if possible, stick to delivery, “Simply because there’s less people.”
Broadly, customers are cutting back on spending as they self-quarantine (also, 16.8 million people have filed for unemployment in the last three weeks). And, typically, eating at home is more cost effective than dining out. Restaurants continue to address this with family bundle meals and other take-home kits, but this is a consumer behavior point with very deep roots. One way to change the narrative is for restaurants to push value heavy in these bulk offerings, since many people live paycheck to paycheck and need something to hold them over between massive grocery hauls. Much more on that here.
Recently, Datassential found that 57 percent of consumers have cut back on food from restaurants. That’s well above the second measure—clothing at 38 percent. And only 19 percent of people planned to use their CARES Act relief checks on “restaurants in my community.”
However, Datassential, said there remains very high consumer interest in the aforementioned “family dinners without the fuss.” Close to 80 percent (78) said they were “very interested” or “somewhat interested” in buy-one-take-one entrée deals, like what Olive Garden is doing. It was even higher among households with kids, at 85 percent
- Full 3- or 4-Course Family Meal Deals: 68 percent
- Sunday Roast/Sunday Supper: 64 percent
- Dinner and a Movie Deals: 63 percent
- Breakfast/Brunch Boxes: 62 percent
- Holiday Feast: 59 percent
- Upscale Dinner: 58 percent
- Kids Eat Free: 47 percent
- Kids Party Packs: 41 percent
Going back to the overall message, a lot of the restaurant wariness hails from not knowing who prepared the food. And if they are infected or not.
This, Loftis said, is something restaurants should try to address and can turn into a strength if positioned correctly.
Restaurant employees, especially since COVID-19, are frequently drilled on food safety and sanitization practices. Loftis says he worked a shift recently at his local Firebirds and the restaurant staff methodically cleaned. Employees wiped down every surface, wore gloves. They understand the stakes. The majority of restaurant employees still working day to day are managers. “It’s just a story that needs to be told, and it would great if it got on the consumer side of the business, too, so they could start connecting the dots a little bit,” Loftis says.
Like many restaurants, Firebirds created make-shift drive thrus so people can pull up in their cars and have employees bring the food out and drop it wherever asked. Most customers prepay. Firebirds will put the food in the trunk or pass it through the window.
A spokesperson for the CDC told TIME on March 17 that “[currently] there is no evidence to support transmission of COVID-19 associated with food or food packaging.”
Which brings up the question: which experience has less touchpoints, ordering curbside or going to the grocery store?
An article in the Atlantic, said, of delivery, “a local restaurant is a better choice than a start-up that sends gig workers with no health-care benefits into crowded big-box grocery stores to fight over dried beans on your behalf. The restaurant delivery person interacts with fewer people, lessening his or her individual risk, and the money you pay for the food goes toward keeping a restaurant’s staff employed through a crisis.”
It also pointed out that, in Wuhan (the epicenter), local delivery drivers were the city’s lifeline during a lockdown that made venturing out for fresh food difficult.
Curbside, or takeout, compared to delivery, removes another yet touchpoint by cutting out the middleman
“You watch these people handle melons five or six times with no gloves on,” Loftis says of grocery stores. “And I know there are conversations that food doesn’t transmit the diseases, but it’s still gross and they’re packed. I’m not saying we need to bad mouth the grocery stores but I just feel like the restaurants get beat up as a result of it.”
As many pundits agree, the real danger of shopping at grocery stores is from the other people, not the food itself or even the staff. Stores nationwide are restricting shopper counts and ramping up cleaning protocols. Sanitary wipes are being provided and many people are electing to wear masks, as now recommended by the CDC. Gloves as they work their way up the aisles.
It’s not the most settling of experiences.
Outside of delivery, the grocery channel simply cannot provide the frictionless/minimal contact experience that consumers are demanding. Not like restaurants can. Yet reality and perception aren’t linking up for most.
This is something restaurateurs are trying to change, but understand it might not be fully possible.
Chris Elliott, the CEO of Beef ‘O’ Brady’s, echoed a lot of Loftis’ thoughts.
“Think about it,” he said. “I went into a grocery store yesterday for the first time, literally, in a month. And about half of the patrons and about half of the employees were wearing masks. There were a few wearing gloves. But, look, every cart or every basket is touched by dozens if not hundreds of different people a day. And there’s no way to be able to sanitize all of that. You’re in the aisle with people and the checkout aisle with people who are not 6 feet apart.”
“Grocery stores are an essential need, you’ve got to eat,” he added. “But the idea that it’s safer than being in a restaurant, it’s just kind of silly really. But it is what it is.”
Front Burner Restaurants CEO Randy Dewitt, whose Texas-based brands have leaned on meal kits in recent weeks, like take-home cocktail packages, says their customers have embraced the difference once they try it.
“They can’t believe how well they’re able to eat at home so conveniently,” he says, “and not have to go into a crowded grocery store and find bare shelves and have to bump into people. And even if you do fill up on a shopping basket, the cashier is handling every single item. Our customer base picked that up pretty fast.”
He adds: “One thing I haven’t really seen happening in the consumer media is just the realization that using a restaurant curbside is safer than shopping in a grocery store. I don’t think the average consumer is getting that pitch,” Dewitt says. “And people are still flocking to the grocery stores and big boxes like Costco and wholesale stuff.”
One reason grocery stores remain at the forefront has nothing to do with food. People need other essentials, like paper towels, milk, toilet paper, etc. But to Dewitt’s point, finding these items is like chasing for rubies in a roadside gem shack.
And that’s given rise in recent weeks to restaurants trying to shift this conversation; the idea they’re not essential businesses and don’t serve that role in society. (Restaurants that offer off-premises meals are typically classified as essential business under state and local stay-at-home directives, but it’s not widely understood).
Many chains, with Panera Bread being the biggest, have pivoted to makeshift grocery operations. Panera even offers the service on Grubhub, where people can order from a restaurant and then tack on some household items, like fruit and milk. Customers can also access the platform from Panera’s app and website. They can grab lunch or dinner and also pick up a few groceries. And do so via curbside, drive thru, or delivery, if they want. Frisch’s, Potbelly, Huddle House, and Perkins are all doing this, too, as is fast casual Just Salad and many others.
Dewitt’s Whiskey Cake brand has offered “quarantine survival kids” from the early days, complete with two sirloin steaks, six burgers, two brined and marinated chickens, 30 eggs, a gallon of milk, a pound of butter, half a dozen oranges and two rolls of toilet paper for $48 (the packages change often and are shared via social channels).
Firebirds sells cut steaks and seasoned beef for customers to take home and grill themselves.
Restaurants are gaining traction here, Datassential said Friday. The company asked 1,000 consumers, “What is your interest in purchasing the following grocery categories from restaurants during the COVID-19 crisis?”
- Breads/bakery items: 72 percent
- Fresh produce: 70 percent
- Fresh meat/seafood: 70 percent
- Deli or cured meat products: 66 percent
- Dairy items: 65 percent
- Pantry items and dry goods: 64 percent
- Paper goods: 63 percent
- Non-alcoholic beverages: 59 percent
- Baking ingredients: 58 percent
- Adult/alcoholic beverages: 52 percent
“But execution will be crucial, given all the forms this new idea could take,” Datassential said. “Will customers be able to pre-order online? Curbside pick-up, or delivery? Bundled meal kits, or customizable orders? If a restaurant figures out which combination works for its operation, the potential is there for a big audience.”
Stephen Morse, an epidemiologist at Columbia University, told the Atlantic that “cooked foods are unlikely to be a concern unless they get contaminated after cooking.”
So the real danger of getting food from a restaurant, if you don’t actually come into contact with anybody who works there, stems from somebody with COVID-19 touching the actual food itself after preparation. If the food is handled properly, he said, “there should be very little risk.”
And this is mostly a theoretical concept, since, again, there is no evidence to support transmission of COVID-19 associated with food. It would mostly be a fear of a worker sneezing on a salad, or something along those lines, Morse said.
But Loftis notes he’d rather take that risk that the one presented by grocery stores—all the other people. Like Elliott says, all you need to do with curbside is grab the food from one person and go. You have bags and and boxes and bottles to clean from a grocery store. As well as all the precautions you take in the store itself.
Live Science wrote in an article that people, at the grocery store, should follow these steps:
- Sanitize their hands often
- Wears a mask
- Practice social distancing
- Touch only what you buy (this would be nice, but how can you prove this of others?)
- Don’t touch your face
When you get home
- Wash your hands
- Don’t leave your food outside
- Rinse your produce
- Don’t use soup (on produce)
- Wash reusable bags
In the case of restaurants, consumers are generally relying on the restaurant itself to take precautionary measures. That trust is perhaps where the biggest gap needs to be crossed. The CDC recently released recommended safeguards for restaurants and their employees. And many brands have gone above and beyond these.
Loftis says it comes down to making sure the customer hears that message. While the restaurant doesn’t want to continually remind guests what’s happening with COVID-19, it needs to be transparent with the steps taken to keep everybody safe. Taco Bell just announced Friday an extensive seven-point plan it plans to roll out over the next month, which includes employee temperature checks at the beginning of each shift.
Every step matters.
Things like making sure orders and packages are deliberately and visibly sealed are critical. And restaurants have a history in this, given all the health inspections and other standards they’re held to by officials. Best practices didn’t start with COVID-19—they accelerated.
The truth is, Loftis says, restaurants across the broad are taking every precaution possible. They have no choice considering how miniscule the margin for error is right now. Is the same true of grocery stores?
“It just feels like the rug’s been pulled out from restaurants,” he says. “I would much rather do [curbside] and get my meal. And the way things are priced now, I can feed a family of four for $30 at Firebirds, and have plenty of food left over. I’d rather do that than go and deal with all the junk in the grocery store. It’s almost like that’s story is not being told.”