How Restaurants Are Improving Revenue while losing money, during the Pandemic

By: Nick Gardner

Just two words defined restaurant survival in 2020 and 2021 (and probably will probably continue to do so in 2022 as well): flexibility and creativity.
 

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  • Flexibility requires breaking down many boundaries that had long been traditional in the restaurant world. In the fine-dining segment, learning how to work with once-unthinkable delivery, pick-up and carry-out operations was a key factor in their survival. Shorter or longer working hours reduce the number of employees on the premises while switching roles (like packaging instead of prepping) helps employees keep their jobs.

 

  • Creativity finds innovative food service options that bring in revenues and keep staff busy, ranging from parking-lot picnics to pop-up markets selling off now-unusable inventory in shuttered dining rooms. Cost-effective menus and practical presentations require a complete re-think of restaurant operations, as packaged-to-go meals have very different logistics from eye-pleasing dishes plated for the table.

Looser Alcohol Delivery Laws

As the entire nation moved into lockdown during 2020, many states eased their alcohol delivery laws, allowing homebound customers to add wines and cocktails to their delivery orders. This was a huge help to struggling restaurants, as alcohol sales account for some of their heftiest profits.

Here are the inspiring stories of some restaurant owners who are not only surviving but thriving in this pandemic-fettered world. 

Wingstop Flying High 

Picking its way smoothly through the ever-changing coronavirus context, Dallas-based Wingstop increased its-store sales by over 30% during the early weeks of the pandemic. Its secret ingredient? Shifting swiftly to off-premise sales, tied to an online free delivery offer through DoorDash.

The loss of dine-in revenues has been offset and more by higher average tickets, as consumers using the delivery channel are often ordering for the whole family. As a result, online order checks are up to $10 higher than dine-in transactions. In fact, its digital sales topped $1 billion systemwide during 2020, accounting for 60% of total sales.

With its dining rooms closed, deliveries and digital orders soared from just over 40% to 65% of Wingstop sales. This was driven partly by fast footwork in its advertising department, which pivoted placements originally planned for live sports events (all canceled almost overnight) to paid search and social media, as well as gaming platforms (like Twitch), and live streaming options (like Hulu).

Other innovations include:

  • Worker incentives at company-owned restaurants may boost full-time weekly wages by as much as $150, with brand partners encouraged to follow suit;

     

  • Community donations are providing thousands of meals to underprivileged youngsters, as well as serving meals to healthcare workers at local hospitals;

     

  • Health and safety are ensured by a cross-functional task force providing information that underpins fast decisions

     

  • Building up digital infrastructure, a new CTO is working towards digitizing 100% of its transactions.

Unexpected benefit: soaring chicken breast demands triggered by an upsurge in home-cooked meals resulted in a glut of jumbo chicken wings. This pushed prices down with immediate cash flow benefits, as wings are purchased weekly on the spot market. 

Moo Creamery Still Churning out Meals 

Having survived the 2008 recession, Moo Creamery owner Jessica Pounds is confident she’ll cope with Covid-19 as well. Her innovative solution was to minimize the number of employees in her restaurant at any one time by shifting to around-the-clock operations. This means that food prepping takes place overnight, with only service staff on the premises during business hours, limiting personal contacts with safe social distancing.

Although some of her employees chose not to return, many kitchen staffers were comfortable working nights in greater safety. For added space, she converted the used dining room into a carefully-arranged prepping area,  with added peace of mind for staffers. 

Initially pivoting to curbside pickup and delivery, she progressed to patio dining as lockdowns eased. Her intention is to provide comfort and a feeling of normalcy for her regular customers, towards whom she feels tremendous gratitude for their support. That’s why she’s determined to continue spreading happiness through the Bakersfield community while preserving the livelihoods of local suppliers. 

Mama Kat’s Picks Picnics

On Mother’s Day, Mama Kat’s was running at full capacity from dawn until after midnight, posting record pandemic-period sales. However, owner Michael Herrera points out that this is still less than half of his usual revenues. His solution? Innovation with isolation.

 Looking at his empty tables, equally empty parking lot, and a dozen or so employees standing idle (many of them with him for over a decade), he devised a solution that’s kept most of his staff working. And it’s been sold out every night since its launch: the Parking Lot Picnic. 

For $10 (with a 50%-off coupon easily available), customers can book their parking spot through the website, bringing their own beverages (and blankets, as San Diego evenings can get chilly). Eager for a fun dining-out experience during bleak times, customers are flocking in day and night, to the tune of around 400 covers a day. Even so, he still barely makes 35% of his pre-pandemic income, which is a tricky situation for a full-service restaurant offering top-quality food. 

This family-style restaurant and pie shop is well aware that it can’t simply add another dollar to its signature dishes, or else cut back on the eggs and gravy. For the moment, the parking lot picnic and to-go orders are buoying the restaurant, while Herrera looks for new ways to survive while keeping his staff safe and his dream alive.

Thinking Out of the Bento Box

For many Asian restaurants in New York, the pandemic began in the early weeks of 2020, with sales plummeting even before the March lockdown. Born and raised in Taiwan, Eric Sze chose bento boxes as a logical lifebelt for his 886 restaurant, opened just two years earlier on St Marks Place. 

Initially prepared just to feed his staff, he quickly began selling them to their neighbors at $10 each. Underwritten by public donations, Sze and his staff were soon donating 350 meals a day to hospital workers. 

By May he was offering takeout, with his breakthrough idea launched in July: outdoor meals modeled on Taiwan’s street stalls, complete with disposable chopsticks and plastic stools. With money still too tight to build an outdoor dining area, he focused on atmosphere rather than architecture. However, business slowed over Thanksgiving, as winter approached. 

Although many of his staff had already left town, he decided to wager on that New York vibe and extended his lease. By the time spring arrived, things were looking up: vaccines were on the way, legislators were dusting off the $120 billion Restaurants Act, while the Senate had reportedly included $25 billion for independent restaurants in the  Biden Administration’s $1.9-trillion covid relief bill

Confident that New Yorkers will soon bounce back to their normal lives as vaccines underpin COVID immunity, Sze is already planning his second restaurant in a leased space in Greenpoint. 

 

As the entire nation moved into lockdown during 2020, many states eased their alcohol delivery laws, allowing homebound customers to add wines and cocktails to their delivery orders.

Cooking with Zoom 

Just a short walk away from the Newburyport waterfront in Massachusetts, the Paddle Inn is surviving on take-out orders and fine-weather outdoor dining, while also teaching customers how to dine in style at home.  During the chillier months, chef and co-owner Suzi Maitland runs a Tuesday evening cooking class on Zoom that spotlights international favorites, ranging from Mediterranean cuisine to Central American delicacies. 

Students sign up in advance, collecting bags of pre-measured ingredients on Mondays, for use during the Tuesday classes. At $75 a couple (the wine included), the evening’s entertainment is guaranteed, as the amount of home prepping is carefully calibrated to make sure diners feel they have really made the meal themselves.

Although she enjoys the teaching, Maitland notes that preparing for these classes is a time-consuming task: choosing themes that are varied but recognizable, scaling down recipes for home use, getting all the ingredients together and packaging them, and then testing to make sure each streamlined recipe actually works.

Together We Succeed

Long famed for its temperamental chefs and kitchen rivalries, the entire restaurant industry is now presenting a very different – and united – face to the world. From scrubbers to sommeliers, everyone is pulling together, striving to preserve jobs and incomes (if not functions) by keeping businesses open, even if they are no longer plating meals. 

Cloudier than over-aged wine, the future remains impossible to predict, as new vaccines and even newer variants battle for global supremacy. But whatever the outcome, one thing is sure: restaurateurs will always find innovative ways of feeding their hungry customers.

By: Nick Gardner

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