The Reopening of Restaurants 2020: Insights From 100+ Operators & Managers [Research]14 October 2020
Where do we go from here?
Restaurant owners are locked in a battle for survival. Thanks to the COVID-19 pandemic, the restaurant industry ran into a brick wall of financial hardship and consumer uncertainty. As if that were not enough, partners of restaurants have not provided the support they should, leaving restaurants alone in their fight to right the ship.
In this survey, we sought to identify partners who have let the restaurant industry down, clarify the behaviors causing the most harm to restaurants, and examine possible immediate and long-term solutions to ensure more restaurants survive. That data, collected here in The Reopening of Restaurants 2020 report, reveals a fractured and difficult battleground for restaurant owners.
We surveyed more than 100 operators and managers in the restaurant industry to see how partners were supporting (or failing to support) their businesses. That data led to critical insights on the present and future of restaurant operational success:
37.5% of restaurants said they would not have been able to stay in business without partnering with third-party delivery apps
Respondents trusted Doordash the most while trusting Seamless the least
38.5% of restaurants have received negative reviews from customers because of an issue with a third-party delivery app
Restaurants say their biggest concern for the next three months is lack of customer demand
28% of surveyed restaurants expect to close their dine-in spaces to become exclusively delivery and pick-up locations
Surprised? Several thousand restaurants have already closed because of the pressures of the pandemic. Customers have become picky about which apps they trust, and different apps work differently with different restaurants. In many cases, a handful of issues with a popular app could spell disaster for a restaurant that had nothing to do with the problems experienced by the customer on the other side.
Let’s take a closer look at the data and the insights we gathered.
Part 1: The State of Restaurants and Reopening
Restaurants can’t take much more outside pressure. According to our research, 18.3% of restaurants said they would “absolutely not” make it through another government order to close, while about a third of respondents gave themselves less than a year of leeway if closings continued. Only 25% said extended closings would not impact their ability to stay open, while 26% were not sure of their prospects either way.
Closings are just one more thing restaurants have no control over that could severely damage their ability to survive. To compensate on the fly, restaurants have made several changes, including more cleaning procedures, limited hours, reduced menu options, and, of course, more takeout services.
Not all restaurants see these changes staying forever, but for many, the new normal has already arrived. Most believe stricter cleaning policies are here to stay, and curbside takeout took the second spot when we asked about which changes restaurants expected to become permanent. Customer expectations have shifted, and so must the ways restaurants provide their services.
For many, though, forever sounds like a long and uncertain future. Over the next three months, restaurants feel highly concerned about customer demand, new regulations, and reliability within their supply chains. Whatever the future holds, restaurants recognize that they will have to reach that future before they can worry about it.
Some restaurants have approached reopening as an opportunity to reorganize and reimagine their spaces. Rearranging seating to accommodate social distancing rules and expectations was the most common response in our study. The next-largest group didn’t plan to make any changes, but a significant number planned to close down their dining rooms entirely to move to takeout- and delivery-only models.
Whether restaurants change their spaces depends on a variety of factors, including opportunity, budget, and need. Not all spaces need to change dramatically to account for new social expectations. Whatever form it takes, though, change appears to be inevitable as restaurants evolve and adapt.
Part 2: Relying on New Technologies
Tech can solve almost anything today. Scientists are using AI and other powerful tools to fight COVID, so why shouldn’t restaurants leverage a few new technologies of their own?
The majority of respondents in our study, 58.7%, said they were considering investing in new tools and technologies to support reopening. While most restaurants recognize the need to do more, many may find budgets tight and look to keep costs as low as possible.
Speaking on specifics, contactless payment systems made an obvious top choice. As customers remain leery about contact points, restaurants want to provide experiences that make customers feel safe. Many of the other top choices, including electronic menus, and self-serve kiosks, reflect the same goal. Interestingly, many of our respondents said they wanted to internalize the delivery process to bypass popular apps like Postmates and Uber Eats.
Customer expectations have shifted to a semi-permanent state of unease. Restaurants seeking to alleviate that discomfort must provide great experiences that allow customers to control their level of contact. But how does minimizing that contact look on the bottom line?
Part 3: Restaurants and (or versus?) Deliver Partners
Most restaurants that survived the first wave of COVID found themselves relying on delivery apps to keep orders flowing. More than three-fourths of our respondents said they offered delivery through third-party apps, and of those who said no, apps may have offered delivery on their behalf anyway.
Reliance on apps spiked significantly during the pandemic. Most of our respondents said between 21-30% of their sales now come through apps, but a shocking number gave numbers even higher, up to 90%. Some restaurants that previously relied on dine-in service and had no infrastructure to pivot to delivery had an easier time switching to apps than taking orders in house.
Restaurants may not like relying on third parties, but more than a third of our respondents said they would not have remained in business this long were it not for their app partners.
Which apps do restaurants trust most, though? Doordash easily topped the list with more than half the total votes, while Uber Eats and GrubHub game in a distant second and third. Seamless only received a single vote for most trustworthy. For the moment, Doordash reigns supreme in restaurant trust.
Asked which app they trusted least, results were decidedly more mixed. This time, though, Seamless rose to the top, indicating that the app is not just ignored but outright disliked by restaurants at the moment. Doordash, the most trusted app, fell around the average of least trusted, which could suggest individual bad experiences across the board drove results in this category.
Do restaurants believe these apps are a help or a hindrance? While many acknowledge they could not have survived without the help of partners, not all restaurants feel positively about the direction of the industry.
Part 4: Restaurants, Reviews, and Fairness
Nothing stings a restaurant like a bad review. Bad reviews that are not the fault of the restaurant being reviewed are a special kind of nuisance. According to our data, more than a third of restaurants had received a bad review because of an issue with a delivery app, and 21.2% were unsure whether they had been dinged for the mistake of a third party.
Given the data we collected leading up to this, the conclusion seems clear: restaurants may need delivery apps, but delivery apps need restaurants, too — and they’re not doing their job when it comes to reputation control. With customers less willing than ever to go out and try new things, a bad review or two could spell the difference between thriving on takeout and closing shop.
The third-party app delivery industry will continue to thrive throughout the pandemic and beyond. The status quo of trust must change if this relationship is to evolve into a positive one. Restaurants deserve apps that prevent users from harming their reputation for no reason, just as apps deserve restaurants that reliably deliver for their customers.
What Comes Next for Delivery Apps and Restaurants?
If restaurants could rate their partnership with apps right now, they would probably give their digital partners three stars: OK, but in major need of improvement. And, as every restaurant knows by now, you can’t survive on three-star reviews for long.
Apps need to do better by their restaurant partners. Pandemic-era restrictions may lift, but the customer mindset will take longer to change. As both sides enter uncharted territory, the digital platforms and the people they serve (on both sides of the bill) must find common ground to ensure the success of all.