Nearly six months into the crisis that rocked the restaurant industry, Upserve asked our customers to complete a survey about how restaurants have been affected by the COVID-19 crisis.
- Most restaurants (64%) feel optimistic for the future, but their biggest challenge (47%) has been shifting their business model to adapt to online ordering.
- Having Online Ordering set up for your business means you are more likely to re-open and be more optimistic about your business.
Methodology: Upserve received survey responses from 421 customers from the following dining cohorts:
- Full-Service Casual/Diner – 35%
- Upscale – 21%
- Bar – 21%
- Fast Casual/Quick Service – 16%
- Fine Dining – 5%
- Coffeeshop – 2%
While we recognize that the Fine Dining and Coffeeshop response was low, we left the data in to get a fuller picture of restaurant needs. This survey was completed June 29.
How Have Restaurants Been Affected by Covid-19?
We asked our customers what their biggest challenge was due to COVID:
- Food cost or supply chain issues
- Keeping staff safe
- Unable to pay staff
- Unable to pay bills
- Transitioning to a new business model with online ordering.
Nearly half (47%) of our customers said transitioning to Online Ordering has been the biggest challenge, followed by 20% who cited the inability to pay bills due to lack of revenue.
When we look at this question by type of restaurant, the breakdown remains the same, but with Fine Dining (57%) and Upscale (61%) restaurants who likely were not doing online ordering prior to the pandemic struggling the most to adapt to this new landscape. Bars (34%), who have been hard-hit by the pandemic restrictions, are more focused on their inability to pay bills. Food Cost and Supply Chain had the most impact on Fast Casual restaurants (25%), but while Fast Casual would seem primed for online ordering, 42% still felt that pivoting to a new business model was their biggest challenge.
It’s key that restaurants find an online ordering solution that works for their customers by the fall, when outdoor dining will no longer be an option for most of the country. As of July 2020, Upserve customers have seen a 782.7% increase in Online Order sales volume growth, and this number is only positioned to grow as outdoor dining options dwindle.
Katie O’Donnell, co-owner of Bywater in Warren, RI, set up their first online ordering menu by taking a look at their restaurant POS analytics to identify top sellers, and built her menu from there. “We went into Upserve HQ to pull our best sellers that we knew people would come back for,” she noted. “We set up our online menu so we could keep labor costs low, streamline our menu, and sell the crap out of everything to keep revenue high and costs down.”
When Will Restaurants Re-Open?
Restaurants will re-open at different times depending on their state and it’s local restrictions. More than 53% of restaurants have already reopened their doors. While more than half had already re-opened, the remaining restaurants were waiting for the safety of their staff (22%) or state regulation (15%). We saw a slight difference in customers using Online Ordering (55% were already open) vs. customers who were not (only 47%).
When we look at this breakdown by state, in current “hot” COVID zones like CA, TX, and FL, 76% of customers surveyed were re-opened for business at the time of the survey.
It’s important to understand that reopening may not be linear. As we’re seeing right now with California, there’s a strong possibility that reopened states will have to shut down again as another wave hits. For Joe Essa, CEO of the Thomas Keller Restaurant Group, that means being prepared for every possible situation and outcome, as well as tailoring a reopening plan to each restaurant and bakery based on location, demographics, data, and feedback from guests.
How Have Restaurants Adapted During COVID?
Surveyed restaurants had several big winning tactics for adapting in spite of COVID:
- 69% of restaurants Updated and pared down their menu for online ordering
- 66% become more engaged with their guests on social media.
- 33% of restaurants surveyed (33%) relied on third-party delivery
- 20% of restaurants started their own food delivery service.
- 24% of restaurants sold pantry or grocery items out of their restaurant or online
- 8% of restaurants created wine or cocktail subscriptions
- 6% of restaurants created grocery or food box subscriptions.
Ivan Lee, owner of Aloha Eats in Chicago, was taking the occasional food order by phone pre-COVID. After the dining ban went into effect, Lee pivoted his business to online ordering and was able to retain 100% of staff throughout the pandemic. He credits Upserve Online Ordering and social media marketing for helping his business thrive and keep its doors open despite the circumstances.
What Technology Will Restaurants Rely on To Re-open?
We asked survey customers what technology they will rely on most as they plan to re-open: 59% said Upserve Restaurant Management tools (to be fair, this was an Upserve Customer survey). 53% said third-party delivery apps, 38% said reservation tools, and 21% said workforce and labor solutions.
In a webinar with Upserve, Joe Essa explained how restaurant technology and data analytics helped them to make a lot of their reopening decisions, “I’ve learned over the years is that I have to adapt to using new technology, new tools, new products.” Essa chose to join the Upserve board because the data and analytics the system provides helps restaurants make better business decisions.
How Online Ordering Affects Business Forecasting and Opening
Customers surveyed who are not using online ordering were overall more pessimistic (26%) vs. customers who were using online ordering (16%). They were also more unsure of when they might open (16% of customers without online ordering were unsure of when they might re-open vs. 7% of customers using online ordering).
How Optimistic Are Restaurants About Their Future?
Despite the challenges faced by our industry, our survey data shows restaurants are optimistic about the future. 64% of respondents said they are slightly (41%) or very (23%) optimistic about the future, while 17% remain neutral.
Fast Casual restaurants, who have a more flexible business model were the most optimistic (28% very optimistic, 41% slightly optimistic), while Bars were the most pessimistic segment (20% slightly pessimistic, 5% very pessimistic).
When asked what made them feel optimistic about the future of their business, 55% of customers said the support they received from their community, followed by 29% who were grateful for government intervention.