Posted in Technology on May 10, 2022
What a difference a few years can make. It’s been over two years since COVID-19 was declared a pandemic, and while the light at the end of the tunnel has flickered and faded at times, bright spots have emerged and expanded to illuminate a feast of opportunities and recharge our sense of optimism.The journey from reckoning to recovery has certainly been a rough one, with the permanent closing of 128,564 restaurants in the U.S. since the onset of the pandemic, according to market research firm Datassential.1 As we’ve been busy relaying here at Let’s Chat Snacks, the shockwaves continue to reverberate as the industry intensifies a seismic shift to off-premises channels and the rapid integration of tech innovations.
Despite the dizzying pace of change, the post-pandemic world seems slow to arrive. But if hindsight is 2020 and 2020 is a few years behind us, we can take a clear view of how far we’ve come, how far we need to go and where we’re headed.
Data Is Served: The Inside Track on the Positive Outlook
It’s a testament to the progress we’ve made that 71% of consumers surveyed are convinced that the worst of the pandemic is behind us.1 Many have a pent-up hunger for freedom from the restrictive foodservice environment of the past few years, and “their risk perceptions are decreasing for nearly every foodservice venue and occasion,” reports Datassential.1 Despite the persistence of coronavirus variants, nearly 20% say they’re not worried about contracting the virus.1
While such data bodes well for the return of in-store traffic, the nimbler, leaner, more digitally driven competitive landscape is here to stay. Eighty-three percent of consumers surveyed consider the way we live permanently changed by the pandemic, especially in regards to remote work, food delivery and takeout.1 “A lot of off-premise and digital ordering strategies will stick around for good, not because people are afraid of getting sick but because they’re convenient,” said Mark Brandau, Datassential’s associate director of content.1
Bigger is Better: Major Brands Serve Up Largest Sales
The uptick in consumer optimism and ongoing high demand for delivery and takeout are major pluses, but what about revenue and ROI from all the transformative adjustments made during the evolution of the new norm? Technomic research reveals big gains for the big chains—and the bigger the brand, the better.2
The largest chains in the Technomic Top 500 saw an 18% spike in sales last year—a jump significant enough to recover from the falloff in 2019.2 Overall, the Top 500 amassed $361.2 billion in total sales—an 8.4% increase.2 While over half fell short of recouping losses, “the big chains at the top just carry so much volume,” explained Technomic Director of Research Kevin Schimpf. “They led everyone to far surpass 2019.”2
That said, though there were shortfalls, sales growth overall compared with 2019 was nearly universal for the Top 500. As Technomic Managing Principal Joe Pawlak put it: “The industry has certainly improved to a point where we’ve recovered from what has been the worst point in history for the overall restaurant industry.”2
Nine juggernauts in the Top 500—Starbucks, McDonald’s, Taco Bell, Wendy’s, Dunkin’, Chipotle, Chick-fil-A, Sonic and Domino’s—showed sales boost of 19% on average.2 Technomic attributes their standout success to their ability to quickly integrate a mix of pandemic-propelled innovations, including drive-thru service, curbside and mobile ordering and delivery.2
Such large chains had the advantage of existing off-channel and digital infrastructures to build on when the pandemic hit. But for all restaurants, the role of innovation has become more critical than ever. “Restaurants can't stop innovating and can’t stop delivering on consumers’ desire for something new,” Brandau said. “We all want a sense of normalcy to return, but it’s hard to see restaurants and food companies winning by just dusting off the same playbook that was relevant before the pandemic.”1
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1 Datassential, “Two Years and Counting,” FoodBytes, April 2022
2 Maze, Jonathan, “Technomic Top 500:Chain Restaurants Recover from the Pandemic,” Restaurant Business, April 7