Utilizing Resources: Generating New Revenue and Repurposing Employees
Dine-in traffic is lagging and restaurants are seeing demand dry up for their core offerings. Layoffs and furloughs have been pervasive throughout the industry as part of cost-saving initiatives and lower need for labor. The small restaurants that will survive this crisis will do so by creating new opportunities amidst the chaos. Restaurants must take advantage of consumers’ new demands by repurposing their workforce, which will lead to increased revenue generation. This research will cover recommended initiatives for repurposing restaurants’ workforce, including sample case studies.
Consider Moving Into Grocery
Food shopping habits are changing rapidly, presenting a valuable opportunity for restaurants to consider entering the grocery business. Consumers are making fewer trips to the physical grocery store, spending more on groceries and cooking more at home for themselves and their families. While people are relying more on food delivery services like Instacart, Amazon Fresh and Walmart Delivery to lessen possible exposure to COVID-19, these services are being pushed to the brink. With so much demand, online delivery services often do not have available time slots and customers are experiencing delays with orders. By offering contactless grocery delivery, curbside grocery pickup, or drive-thru groceries, restaurants can capitalize on a new revenue opportunity, while helping customers avoid crowded grocery stores and the inconvenience of overworked online delivery platforms.
Panera launched Panera Grocery on April 8, allowing guests to purchase in-demand household items like milk, yogurt, a variety of breads, and fresh produce with their menu items ordered. The service enables customers to get groceries via delivery, pickup, or drive-thru, which Panera’s CEO, Niren Chaudhary sees as a major disruption. Just Salad, a fast casual salad restaurant with 50 locations recently launched Just Grocery, delivering fresh greens, veggies, fruit and proteins to the doors of customers. Other restaurants like California Pizza Kitchen, Subway, Denny’s and Moes have all launched similar initiatives. This has become a popular trend amongst large chains, but small, local restaurants have also followed suit, offering groceries to customers to capture new demand.
Fort Defiance, a neighborhood restaurant in Brooklyn began operating as a general store on March 30 because its owner noticed that many people in his community were reluctant to visit the supermarket and had trouble with online delivery. The restaurant has collaborated with its vendors to offer fish, meat, dairy, vegetables and pantry items to customers. Additionally, two New York Based Japanese dessert operators have collaborated to create an online grocery platform devoted to Japanese products through Konveny.com. The co-founder of both establishments, Jimmy Chen, has reported soaring demand for the offering, with the site currently making deliveries to Brooklyn, Manhattan, Queens, and Nassau New York.
Canlis, a small, well-known restaurant in Seattle has created their own version of a grocery service. The restaurant gathers fresh items from farmers, combining them into its community supported agricultural boxes, creating boxes of the best ingredients to deliver to customers looking to cook at home.
Self-Delivery Initiatives
With 60% of surveyed consumers saying they ordered takeout or delivery from a restaurant for dinner each week, it is clear restaurant food is still in demand (National Restaurant Association). As more demand is reliant on delivery, restaurants are implementing and expanding self delivery initiatives, since third-party delivery services are the least preferred delivery method by consumers, with just 18% of consumers selecting them as a favorite in an AlixPartners survey. Not only are self-delivery initiatives more profitable, but they also allow for food quality control and current employees to be repurposed in the midst of COVID-19.
Repurposing employees as delivery drivers part time has proven successful in the past. Panera Bread, a pioneer in quick-service delivery, operates with a hybrid delivery model, repurposing store workers to make deliveries and outsourcing to third-party fleets when it is unable to meet demand. This reduced costs for the chain and created a more unique customer experience. Other chains such as Outback Steakhouse and Carabba’s Italian Grill also use this model.
In order to continue to serve customers efficiently, small restaurants have begun implementing their own delivery networks. Taco Bamba, a five-unit concept based in Washington D.C. is repurposing employees from its closed dining rooms to do deliveries and Canlis, a small upscale dining establishment in Seattle has repurposed its wait staff and other non-kitchen staff as delivery drivers. Additionally, Pinkbox Doughnuts, an award-winning, Las Vegas based donut shop with three stores, is working to grow its self delivery business.
Some restaurants may feel they do not have the in-house resources to launch their own delivery networks. Shiftpixy is there to assist with its technology which helps power native delivery for restaurants, making in-house delivery a seamless process. Also, many technology vendors in the realm of delivery and online and mobile ordering are temporarily offering free access to restaurant customers. In order to facilitate the success of in-house delivery, Bringg is offering its last-mile delivery management system to customers for free. Also, Menudrive, an online ordering platform, is providing free software to restaurants that can increase delivery efficiency.
Partnerships Serving Food Banks and Healthcare Workers
Food banks are seeing surging demand with fewer food donations and volunteer workers. Food insecurity has always been an issue across the United States, but COVID-19 crisis has exacerbated the problem. According to Phil Knight, the Executive Director of the Food Bank Council of Michigan, there are three types of people driving the rising demand. These include: students who were qualified for free or reduced lunch, senior citizens, and those who have never needed emergency food before. In order to attend to those facing hunger, Feeding America, the nation’s largest domestic hunger-relief organization announced an estimated $1.4 billion in additional resources will be needed over the next 6 months.
Small restaurants can set up partnerships with nonprofit organizations serving food banks or the local food banks themselves. This can help restaurants maintain financial stability through incoming donations and repurpose employees to pack and deliver food, while supporting the community. San Antonio restaurants have partnered with the local food bank to set up a mutually beneficial initiative. Restaurants are offering meal packages for two or four people and each purchase results in a donation to the San Antonio Food Bank of either $200 or $400, which leads to at least 1,400 meals for those facing hunger.
Also, throughout this global pandemic, healthcare workers have been on the frontlines saving lives, sacrificing for the greater good of society. They deserved to be recognized and by delivering food to local hospitals through fundraisers, small restaurants can serve their communities and help sustain their own businesses. FieldTrip, a Harlem based, fast-casual eatery, is choosing a nearby hospital to help out each day. Since March 24, it has delivered 1,300+ meals to healthcare workers in New York City. This allowed Chef JJ Johnson, the owner, to hire back half of his staff that was laid off prior. For every $8 donated, FieldTrip will match $2 to complete the cost of their $10 bowls. Additionally, Eleven Madison Park has served as a kitchen for a nonprofit organization, getting thousands of meals to healthcare workers and elderly in need recently.
Also several restaurants in Michigan have partnered with newly created nonprofit, Frontline Foods which arranges partnerships with local hospitals, collects donations and gives proceeds directly to the restaurants that are helping feed frontline workers.
As a social impact initiative, Rem and Company also offers free consulting services and resources to small businesses and nonprofits impacted by COVID-19. Our pro-bono consulting teams provide small businesses with the opportunity to identify and prioritize issues facing their business, propose innovative strategies, and facilitate execution. If you are a small business or nonprofit in need of assistance, learn more about how we can help.