U.S. Restaurants and Consumer Behavior in a Covid-Recovering World

U.S. Restaurants and Consumer Behavior in a Covid-Recovering World

Introduction

Covid 19 has had a crushing impact on the global economy. It has been particularly devastating for the service sector, such as hospitality and food service. The USA food service industry also felt the initial blow but quickly took measures to recover. Understanding customer preferences and serving them accordingly have been the cornerstone of their recovery plan. And it worked very well for brands that remained true to their brand promises. 

Let's see how U.S. restaurants managed the crisis. 

Impacts of Covid 19

In March 2020, the U.S. government implemented strict Covid control measures, restricting movements outside the house. It has affected businesses and consumption trends all across the industries. The restriction levied on dining on-premises had a significant blow on the food service segment. As much as 70% of U.S. restaurants had to shut their doors. This eventually led to the closing of the sale at $240 billion at the financial year ending of 2020, a much lower figure than the pre-pandemic forecast by the National Restaurant Association.   

By December 1, 2020, the situation only worsened with the closure of 110,000+ on-premise food services. Some of these places were even shut down permanently. Eight million employees were laid off. The year ended with almost 2.5 million jobs slashed from its pre-Corona records. 

While dining out was restricted, the demands for food deliveries experienced an unprecedented boom. Food delivery apps were pressurized to cut their commission fees for restaurants and take the onus of their employees' welfare during the pandemic. 30% of the customers' spend that the delivery apps charged as a commission for the staff payment, customer support, and insurance were slashed. A part of this burden was passed on to the customers, which eventually affected the sales of the restaurants.      

Unlocking of Dining Experiences

The unlocking of restaurant services saw a paradigm shift in the dining experiences, with social distancing norms in place. Online menus, contactless deliveries, and takeaways, drive-through pick-ups, body-temperature trackers for delivery staff enabled on delivery apps were the new normal. The post-lockdown phase also introduced a new segment - DIY meal kits that came with easy-to-follow cooking instructions. Social media platforms were actively involved in engaging customers and understanding their changing preferences at the pandemic. 

The new measures and the restaurant owners' proactiveness led to a steady recovery in March 2021, which were 32% higher than its mark in 2020, but 6% lower than that of 2019. Quick-service restaurants that already had off-premise eating experiences, such as curb picking and takeaways in place, registered a 29% hike in the customer transactions, lower than the 2019 figure just by 5%.    

Transformative Trends in Lifestyle and Food Habits - Post-Covid 19 Scenario

The Covid-19 pandemic has been majorly transformative in terms of lifestyle and food habits for Americans. The looming health threat compelled people to make healthy food choices. And this included being informed about the food and beverages they consume. It was a priority for customers to know how their food impacted their health and immunity as a whole. Customers started to read labels for the ingredient lists and procurement sources for every packaged food they pick. Strict dietary measures that help them control the comorbidity factors became a priority. 

Brands promoting environment-friendly, ecologically sustainable food production norms and social inclusiveness experienced more traction than others. The pandemic encouraged people to grow and cook their food. This opened up new opportunities that include online grocery shops, direct ordering from local farms and dairies, home chefs, and culinary up-skilling activities such as cooking, baking, and gardening, to name a few. These trends are expected to stay even after eating and drinking places become fully functional as before. 

Significant Trends in Customer Preference for Dine-in Options

The relaxation of the restriction on movement, re-mobilizing of markets, shopping centers, dine-in restaurants and pubs, and vaccination of people has led to the slow yet steady increase of walk-in customers at the restaurants. However, maintaining social distancing being a priority, some critical changes in customer preferences are noticed. As revealed by Google search trends, customers are looking for open restaurants for eating out. Other search words include Mexican, Italian, healthy food restaurants, and food delivery options.

When it comes to the parameters for choosing a dine-in option, customers are now more particular about the hygiene factor, services, and sitting arrangements, much above price, ambiance, or for that matter, the menu of the restaurant.  

The parameters for food deliveries have services topping the list of priorities, followed by hygiene, app, menu, and customization. One of the significant detrimental factors regarding the foodservice app is the delivery fees topping the list. Packaging material comes next. Reusable, recycled, and compostable packages that were leak and tampered-proof were applauded.

Brand Experience

Major food service brands excited their services to provide convenience and affordability to keep their customers motivated. Drive through, pick-up, and hassle-free delivery options, offers on meals have been some of the measures that helped them sustain themselves during the pandemic. Customer feedback regarding menu, billing and delivery speed at pick-up points has been almost the same as before. Some brands got positive feedback for adopting new technologies and have engaged their customers better than before. 

The Way Ahead

As the normalcy sets across all sectors, including the food service industry, the 'new normal' is not yet bygone. Even after the vaccinations are complete and everyone is set free like before, the habits and new learnings from the Covid 19 pandemic will die hard. The entire food service industry has put their best to sustain themselves and, in some cases, have superseded the expectation. It has been an uphill task for everyone, but with complete dedication and efforts to evolve with the changing norms, U.S. Restaurants have managed to tide over the crisis that seemed like the end. They are now more capable than ever to serve better with innovative technologies, sustainable and hygienic practices, good quality food at the affordability and comfort of their customers.