Reopening Restaurants | Nation's Restaurant News
The restaurant operator's guide to reopening after closures due to the pandemic
The restaurant operator's guide to reopening after closures due to the pandemic
Shifts in Consumer Behavior
The once-high-touch full-service segment becomes no-touch
Of restaurant industry segments, the social-distancing requirements to stem the spread of the coronavirus have impacted few as deeply and profoundly as the once-high-touch full-service dining.
Under the new operational guidance to protect both workers and guests, six feet of personal space is the minimum and the ventilation patterns of indoor spaces are especially suspect.
Restaurant settings that were once cozy and comfortable have become scary and inhospitable. For years, waiters were told that a touch on the guest’s shoulder would help them increase their tips. But no more.
High touch has become no touch.
During the pandemic’s most severe dine-in restrictions, brands were forced to rely predominantly — if not solely — on the relative anonymity of delivery, takeout and curbside pickup. Full-service restaurants, already seeing a decline in sales, struggled the most.
“These are indeed challenging times for the world, our country, our industry,” said Wyman Roberts, CEO of Dallas-based Brinker International Inc. and its Chili’s Grill & Bar and Maggiano’s Little Italy brands, both of which turned to off-premise sales during the coronavirus restrictions.
In the last week of June, for example, longtime full-service Brinker announced it was bringing a new virtual, delivery-only brand to market with the widespread introduction of the new It’s Just Wings chicken wings concept with DoorDash in as many as 1,000 of its brick-and-mortar kitchens.
Darden Restaurants also embraced off-premise for the long term, though officials there remain optimistic that the full-service category will be restored.
“Over the past three months, our businesses — our business changed in ways we never imagined,” said Gene Lee, CEO of Darden Restaurants Inc., in late June.
“When I look back on all that has transpired, one thing that stands out is the resiliency of the full-service dining industry,” Lee said. “Prior to the pandemic, total annual sales for the casual dining industry was approximately $108 billion. And while I do not know how long it will take the industry to recover from the significant impact it experienced, I am confident that this category will get back to the size it once was.”
Lee, who oversees such brands as Olive Garden, LongHorn Steakhouse and Cheddar’s Scratch Kitchen as well as others, said full-service restaurants play a vital role in communities as evidenced by how consumers “relied on restaurants over the last several months” in a totally to-go environment.
“While off-premise will continue to play an important role as we recover, we know that the consumer still wants to enjoy an in-restaurant experience,” Lee said. “In fact, going out to a restaurant with friends and family is the No. 1 activity consumers say they look forward to doing as the economy opens back up, and we've seen that as our dining rooms reopen across the country.”
No more games
Some parts of the full-service industry were less fortunate in the now low-touch world.
The eatertainment segment, which was booming as a way to lure customers out of their homes and away from Netflix in a highly social environment, suffered deeply as distancing became the watchword .
Denver-based Punch Bowl Social temporarily closed all 20 of its locations and eventually permanently shuttered two of those — one in Stapleton, Colo. and one in Schaumburg, Ill.
And amid those closures, Cracker Barrel Old Country Store Inc. announced it was pulling out of its $140 million non-controlling stake in Punch Bowl after less than a year to focus “on its core business.”
Punch Bowl Social was meeting with investors and looking at other financing options, CEO Robert Thompson said.
Thompson said the Stapleton and Schaumburg locations closed as a result of being unable to negotiate with their landlord, but that most of their landlords throughout this process have been “understanding that we all lose if we don’t jointly absorb this pain.”
Dallas-based Dave & Buster’s Entertainment Inc. had to shut down all 137 of its eatertainment units on March 20 and only began to reopen them in May.
“Our singular goal has been to weather the shutdown period and reopen our stores as soon as we safely can,” said Brian Jenkins, Dave & Buster’s CEO in mid-June.
The COVID-19 impact was deep. For the first quarter ended May 3, Dave & Buster’s revenues decreased 56% compared with prior year period including a 59% decrease in same-store sales.
“During the three weeks leading up to March 20 closures, we had already experienced significant declines in traffic as consumers proactively started avoiding restaurants and group entertainment venues. Our first quarter results clearly reflect that sudden change in our business,” said Scott Bowman, Dave & Buster’s chief financial officer.
Wall Street analysts from Jefferies said in a note that the post-shutdown consumer has changed from before the coronavirus restrictions.
Early feedback “seems to show more young adult consumers and less parents with kids (understandable to some extent even with new cleaning and safety measures this is still a high-touch environment) and about a 5%-point mix to games/amusements from food,” the report said.
Jefferies noted that Dave & Buster’s is working on changes in the service model that include testing a contactless order-and-payment system at tables and the size of the menu was trimmed from 40 items before the pandemic to around 15 now.
“High degrees of uncertainty and volatility are likely,” Jefferies noted. “We remain of the view that near-term improvements will be choppy and slow.”
The volatility extended into planned mergers in full-service landscape, with at least one deal going under.
Dallas-based TGI Fridays, a longtime casual-dining fixture, was set to merge with Allegro Merger Corp. , but that $380 million deal collapsed in early April because of “extraordinary market conditions” caused by the pandemic.
Don’t serve yourself
Perhaps most impacted by coronavirus was the buffet segment, which required consumers to touch things as part of their appeal. Reopening guidelines for a number of states, however, said buffets had to remain closed.
In May, Garden Fresh Restaurants LLC, parent to the Souplantation and Sweet Tomatoes buffet brands, filed for Chapter 7 bankruptcy and began liquidating its assets , closing all 97 of its restaurants and three distribution centers.
In June, Luby's Inc., Houston-based parent to the Luby’s Cafeteria and Fuddruckers brands, announced it was seeking to sell its real estate assets , wind down its operating divisions and distribute net proceeds to shareholders if the company couldn’t be sold in its entirety.
Raleigh, N.C.-based Golden Corral Corp., known for its scatter-buffet format, was forced to suspend operations at its 35 company-owned units in March . Some franchisees began reopening as state and local restrictions eased in May.
Golden SW Financial, for example, a franchisee in Tucson, Ariz., reopened May 11, but the buffet had been transformed to “cafeteria-style service that eliminates the need for guests to touch serving utensils,” along with social-distancing measures.
As if to put a nail into the coffin, the most recent Food and Drug Administration guidelines, issued in response to the novel coronavirus, recommend “discontinuing operations, such as salad bars, buffets and beverage service stations that require customers to use common utensils or dispensers.”
Dallas-based Pizza Inn, which instituted a contactless buffet-to-go during the shutdown, in May announced the launch of its “New Right-Way Buffets” for restaurants that were reopening.
Procedures vary by location, but changes include cafeteria-style service and even table service at some units; one-way traffic around the buffet to minimize contact; guests will be given gloves or sanitizer before helping themselves; and utensils will be changed between each customer.
“Our New Right-Way Buffet is our way of giving guests the buffet experience that they have come to love while practicing enhanced health and safety measures,” said Justin Smith, Pizza Inn’s senior director of operations, in a statement.
Investing in Health & Safety
The cost of equipping a post-shutdown restaurant
As if running a restaurant wasn’t challenging enough, in a post-coronavirus world it now requires a whole new set of tools and gear just to keep employees and customers safe. Yet, operators across the country are rising to the challenge, prioritizing health and safety and making major investments in the necessary equipment, regardless of the costs.
“It’s not a chapter in a book — it’s a whole new book,” said Steve Greer, chief marketing officer of Encinitas, Calif.-based Urban Plates. “It had to end with physical changes and investment.”
The most significant investment for the 19-unit, fresh-made fast-casual chain has been the expansion of its kitchen display system to reroute how guests order.
Previously, guests would walk a food line, select what they’d like from various stations while a staffer prepared that part of the dish, then passed it to the employee at the next station, and so on. Since the onset of COVID-19, Urban Plates has eliminated that process by revamping the line layout. Now guests walk directly to the cashier, who is behind a plexiglass barrier, to place their order.
“It was a massive undertaking,” said Greer. “We’re thinking long-term and investing.”
A Nekter Juice Bar employee wearing PPE behind new Plexiglass cashier barrier.
The price tag for the physical changes and all the associated new equipment, such as additional computers and printers, was about $22,000 per location. That investment is on top of the $78,000 the chain spent from March through June providing masks, gloves, and hand sanitizer to its more than 600 employees.
Other chains have found a way to protect employees and customers through less drastic, yet still costly, changes.
For example, the most notable investment made by Bellevue, Wash.-based MOD Pizza has been the installation of POS/cashier shields. To install plexiglass sneeze guards around the cashier stations systemwide has cost the chain about $70,000.
“We went through a lot of testing, so the squad feels safe,” said Kevin Petrisko, senior vice president of store development for MOD Pizza, of the new barriers. “It was a high priority for our leadership.”
MOD is also in the process of switching from hand dryers to contactless paper towel dispensers in its restrooms. With the dispensers priced between $30 and $50 each and the need to install at least two in each MOD location, the chain will soon shell out as much or maybe even more than $40,000.
By far the biggest investment for Santa Ana, Calif.-based-based Nekter Juice Bar has been personal protective equipment, or PPE. The 171-unit chain, which specializes in smoothies and açai bowls, is using per day more than 800 disposable face masks, 21,000 pairs of gloves and about 160 gallons of hand sanitizer. The cost to keep its 2,100 employees safely outfitted is between $3 and $5 per employee per day.
“It’s hard enough to make a restaurant work at 100% capacity, and [now] you have improved costs … it adds up,” said Steve Schulze, Nekter president and CEO.
“It’s not a chapter in a book — it’s a whole new book... it had to end with physical changes and investment.”
Steve Greer, CMO of Urban Plates
Other equipment investments being made at the franchised juice brand on a store-by-store basis include the addition of plexiglass barriers for cashier stations, and two-sided refrigerators, which are being tested in the chain’s top three markets of Arizona, California and Texas. Franchisees can opt-in to purchase the refrigerators, which cost about $1,000 each.
The two-sided cold cases make it easier for staff to load up orders from one side while customers or third-party delivery drivers grab them from the other side, eliminating potential contact between the two.
Meanwhile, City Winery, Michael Dorf’s restaurant, winery and live-music venue with 12 locations in seven cities, has not heavily focused its investments in any one area, but rather across a variety of areas.
“Health and safety is paramount,” said David Miller, City Winery’s chief operating officer.
Among the notable investments are providing disposable masks and gloves for the 155 employees out of about 1,100 who have been called back to work so far; adding hand sanitizer stations around the front of house; upgrading bathrooms with contactless soap and paper towel dispensers and toe pulls for all stalls/doors; and installing plexiglass barriers around customer service stations.
A breakdown of the costs per investment weren’t available, but Miller said he estimates that City Winery has so far spent “tens of thousands of dollars.”
A new expeditor station at Urban Plates, part of the chain's Kitchen Display System revamp.
With such high costs associated with even the basic tools and gear, operators are taking disparate approaches to paying for it all.
“As we think of these as the new normal, my hypotheses is we would absorb most of this into the cost of doing business,” said MOD Pizza’s Petrisko.
Right now, however, Petrisko said MOD is paying for these investments by re-allocating a lot of its new store opening growth capital.
Other operators are drawing on existing resources or simply eating the additional costs.
“We are fortunate enough to have funds in the brand to afford this,” said Urban Plate’s Greer.
As we think of these as the new normal, my hypotheses is we would absorb most of this into the cost of doing business.
Kevin Petrisko, SVP Store Development of MOD Pizza
Similarly, before reopening, City Winery narrowed its team, took pay cuts and in general conserved cash in anticipation of needing to make safety investments.
“There was a priority of funds,” said Miller. “[We] stopped spending anywhere we could not to bleed.”
At Nekter, Schulze is trying to offset the costs by optimizing labor and absorbing the rest.
“Right now we have to absorb those costs,” said Schulze. “Most important thing right now is to get guests back into the restaurants and do it safely.”
A Flexible Workforce
Constantly changing regulations means that operators and their staff need to adapt quickly
The coronavirus pandemic and the ever-changing regulations that have come with it have made the task of staffing restaurants properly, which is difficult in the best of times, an even more daunting task.
But many operators rose to the occasion, shifting their business models and figuring out what staff it needed at what times. Outside service providers also have been on-hand to provide technical assistance to restaurateurs in facets they might not have experience in, such as delivery.
In a special summertime session of the Restaurants Rise digital summit on how to build a flexible workforce, Peter Bruce, supervisor of restaurant operations for 23-unit Flanigan’s, a casual-dining chain in South Florida, shared how he continues to juggle the different regulations in the four counties where he operates while keeping his customers and workers happy and safe. And Steve Holmes, co-founder of the staffing software company ShiftPixy, discussed what other solutions are available to operators.
Bruce said that Flanigan’s, known for its baby back ribs, has had to implement new systems as new regulations come and go.
“The restrictions and mandates that are pushed upon us are different from county to county,” he said, including different curfews and hours they were allowed to be open, mask wearing, social distancing, whether customers could dine indoors or not and to what capacity the restaurants could be filled.
“We had a multitude of different systems that we’ve implemented,” and they continue to be improved upon, Bruce said.
At first, they could only do delivery and pickup. Bruce said the company was able to keep many of its employees working at that time by shifting their roles and having them deliver the food.
An initial benefit of that was that their servers were already familiar with Flanigan’s food and its takeout packaging.
“We were able to load maps onto the computers at the stores and [the servers] were able to figure out the delivery address,” which they kept within three miles of each restaurant to ensure that the food was delivered hot and fresh.
“We had such a great work team at Flanigan’s,” Bruce said, that they were willing to deliver, take phone orders, pack the food or whatever else was required. “It was very easy to attain,” he said.
Cross-training was already part of Flanigan’s practices, so the staff was used to wearing multiple hats, he said. “We’re consistently training and cross-training,” he said.
“Curbside [pickup] took on a very large role for us when our dining rooms were closed,” more so than delivery, Bruce said. “A lot of times the customers got a little cabin fever and they wanted to get out and get to a [restaurant], and the way our curbside works, they never had to get out of their cars.”
But demands have ebbed and flowed as regulations have changed, with dining rooms being closed again in some counties, and face masks being required outdoors at some locations, even while the guests are seated, until their food arrives.
Bruce said that meant the supervisory team had to have “a great communication highway where we’re consistently staying in touch with all of our managers and general managers, keeping them up to date with the latest curfew mandates, social distancing mandates, capacity mandates. Their schedules are constantly changing, and the reason they’re changing is because their mandates are changing.” Restaurants that might have been able to stay open until midnight last week might now have to close at 10 p.m., for example.
“We had to create new traffic patterns in our parking lots because they couldn’t come in the building. … Our team members were out in the hot sun, bringing the food to them, getting their order number, getting the payments from them.”
They created to-go pickup stations and point-of-sales systems outside to follow social distancing mandates. “And as this rolled and kept on going, we improved upon them. We’ve really streamlined this.”
They also created “outdoor dining rooms” with tents in the parking lots with marks where tables had to stay to make sure everyone was socially distanced.
The changing regulations required “creative scheduling, I would say,” he said with a laugh, including shifting staff to the new revenue stream of curbside pickup. He added that curbside pickup volume changed based on the changing regulations with regard to dining room capacity.
“We have created such an efficient system there that when they hand out a new mandate it’s just us turning left and turning right and turning left and turning right. It’s a bit of a juggling game, but we’re doing it very well.”
The result of Flanigan’s flexibility has helped them develop a new customer base of guests who used to go to other restaurants that weren’t able to pivot as quickly to the new realities, Bruce said.
He said that as regulations change, they look at recent data to anticipate how much staff they’ll need where. So if a dining room is returned to 25% capacity, for example, Bruce and his team look at what the demands were the last time they were at 25% capacity.
“They do have empirical data they can go back to.”
He said scheduling “is on a sliding scale” based on the changing regulations. “There’s always work to be done,” he said. “We may not be able to maximize everybody’s schedule to the full potential that we would like them to be at, but if we utilize a little bit of each person, everybody wins in the end.”
Flanigan’s has stopped doing delivery now that table service is available, because, Bruce said, they want to focus on their guests at the restaurants. They haven’t used third-party delivery because they’re not comfortable with how those deliverers would handle the food, he said.
He said that Flanigan’s uses social media to keep its customers aware of changing regulations, and Holmes of ShiftPixy said that people are increasingly making dining decisions online.
He said that fact “necessitate a digital transformation. It’s no longer [just] an option. This is about preserving relevancy and becoming more agile.”
One area where a digital presence is important is delivery, he said, which many restaurants farm out to third-party delivery companies.
He pointed out that, while many restaurant segments have suffered during the pandemic, pizza delivery has flourished — up 140%.
“We believe it’s because they own that customer engagement in all these off-premise opportunities,” he said, adding that that reality will continue after the crisis is over.
That’s in contrast to using third-party delivery, which Holmes said leaves 35% of customers unsatisfied, of which 80% blame the restaurant, not the delivery company.
“We see quite a bit of brand damage that has come along with it,” he said, adding that third-party delivery is less profitable, and that those companies keep restaurants’ customers’ data.
“If you’re not learning anything about the people buying your product, and you’re paying for the privilege, are these services really working for you, or are you working for them?” he said.
Holmes said 70% of customers surveyed said they’d rather have their food delivered by a uniformed restaurant employee than a third-party delivery worker. He said he believed that was because customers trusted restaurants to deliver their food safely.
He said ShiftPixy provides technology that allows restaurants to manage their own drivers — as well as other functionalities such as enabling digital marketing and allowing customers to order and pay electronically.
Holmes said that bringing delivery in-house can drive customers to restaurants’ own loyalty and rewards programs “and the ability to connect the user, incentivizing the user to connect with you and order with you.”
On top of that, he said managing your own delivery is more profitable.
Craving Comfort Food
Deep dish comfort foods — from sizzling skillets to indulgent casseroles — are resonating with customers at a time when abundance and value reign king
Denny’s chief brand officer John Dillon noted in a recent CNN Business Interview that the chain’s Sizzlin’ Skillet Supreme had fallen victim, at least temporarily, to menu simplification, but the good news is that other sizzlin’ favorites like Crazy Spicy Sizzlin’ Skillet made the cut on the newly slimmed-down bill of fare.
As diners return to post-pandemic dining rooms, skillets — along with other old-fashioned, don’t-get-at-home comfort foods — will reassert their crowd-pleasing presence and broad-based popularity, thanks to their value, abundance and presentation pop.
Why skillets score. Skillets — one of the oldest tricks in full-service chains’ playbooks — deliver total sensory appeal with their surefire preparation-and-presentation combos. Their rustic appearance connotes back-to-basics authenticity, and their auditory crackle and wafting aroma suggest hot-off-the-stove freshness and hands-on kitchen expertise.
Applebee’s skillets trace their roots back to the chain’s early days; a menu from 1998 touts five varieties of Sizzling Skillet Sensations, like N’Awlins and Sicilian. The Bourbon Street Steak currently on offer is jazzed up with Cajun spices and garlic butter and served searing on a cast-iron platter. TGI Friday’s Sizzling Fridays Signature Whiskey-Glazed Flat Iron Steak is soy marinated and topped with Cajun-spiced onion rings, while Quaker Steak & Lube’s loaded mac and cheese skillet piles on extra cheese and pulled chicken or pork.
Sweets are super in skillets, too, like Applebee’s Sizzling caramel apple blondie or Quaker Steak & Lube’s Amazing chocolate chunk cookie skillet with salted pretzel balls.
Why buckets are big. They telegraph abundance and value, as with KFC’s iconic bucket, which house-bound, finger-lickin’ consumers rediscovered to the tune of double-digit sales increases in May. This summer’s $20 Fill Up promotion invites diners to fill the bucket with their chicken of choice and throws in slaw, biscuits and mashed potatoes on the side.
Buckets also suggest shareable informality, as with Grapevine, Tx.-based Cotton Patch Cafe’s new chicken fried bacon bucket that consists of hand-breaded, Southern-fried bacon strips with choice of cream gravy or ranch dipping sauce. In fact, bacon and buckets seem to have a real affinity. They are paired in Southern Calif.-based Lazy Dog Restaurant & Bar’s bacon candy appetizer, which is baked in brown sugar, crushed red pepper chile flakes and black pepper, and in Nashville, Tenn.’s Logan’s Roadhouse’s bacon on a stick appetizer, in which the bacon is skewered on wooden sticks and placed inside a silver bucket lined with newspaper.
Buckets aren’t the only source of deep-dish satisfaction. Huntington Beach, Calif.-based BJ’s Restaurant & Brewhouse’s long-running Pizookie line of desserts features cookie dough baked in a pizza pan, promising the perfect ratio of warm and gooey to cold and creamy. The seasonal Strawberry Shortcake Pizookie swaps out conventional shortcake for a large, hot sugar cookie topped with strawberries, strawberry puree, vanilla ice cream and whipped cream.
Why casseroles are comforting. Their familiar, double-handled informality conjures neighborly potlucks and Sunday suppers. Served in a cast-iron casserole, Lazy Dog’s queso dip delivers a contemporary take with cheddar, jack and queso blanco cheeses combined with pimento, hatch chiles and cilantro black beans. Cracker Barrel’s all-day breakfast menu gets a boost from the classic hashbrown casserole; the loaded version is finished on the grill with bacon crumbles and melted colby cheese. At City Winery’s outpost in New York City, a special French toast casserole topped with berries was on offer for Mother’s Day brunch.
Independent restaurateurs favor creative casseroles, too. Bluestem Brasserie in San Francisco — currently temporarily closed during the pandemic — features an unexpected cast iron cornbread with chocolate crémeux and mascarpone. In a similar vein, the first floor tavern at Boston’s Post 390 — temporarily closed during the pandemic — cooks up cast iron s’mores in the restaurant’s brick oven.
On the savory side, Prairie Grass Café in Northbrook, Ill. includes spicy chicken chilaquiles casserole as part of a family-style meal package. In downtown Atlanta, By George presents pot au feu (French beef stew) in a shiny metal casserole, while at Cold Beer nearby, a dish of deviled crab, sunchokes and preserved sunflower seeds comes in a brown enamel casserole dish. Skillet Cornbread with sorghum and butter is a popular starter course at no. 246 in Decatur, GA.
Looking ahead, when customers return to restaurants, they’ll crave the comfort of familiar foods served with style. Skillets, buckets and casseroles are humble vehicles that deliver a visual pop of reassurance along with their tasty contents.