Supporting the restaurant and hospitality industry is our core focus

Supporting our restaurant, retail and hospitality clients – and the industry as a whole – has been, and will be, the very core of RMS. This page brings together our global insights to deliver actionable information you can use during and after the coronavirus crisis.

Impact

Traffic for the US, Europe and Asia continue to improve, while in the Middle East/Africa traffic was down considerably due to Ramadan, which ends May 23.

  • In the US, traffic stabilized at negative 15% YOY.
  • Europe’s traffic trends lag behind at negative 30-40% YOY, though we still see slight improvements from the prior two weeks.
  • In Asia, traffic is showing signs of improvement, moving up from negative 25% YOY traffic to negative 30% in the prior week.
 

Reopening but cautiously, particularly for families + New Ways to expand “off premise”

Restaurants are starting to reopen with new serving environments compelled by social distancing and increased hygiene processes and routines. Some segments like families are cautious, choosing the safer option of pick-up and delivery to limit contact opportunities and the risk of contamination. Initial results from qualitative research of families in 4 countries (Germany, South Korea, UK, and US) indicate that delivery and to-go will continue to be an important revenue channel for restaurants until effective vaccines will be found. 

Differentiated off-premise may prove to be a future profit center and is a growing trend, as brands add unique delivery branding and additional production kitchens solely designed to expand off premise efforts. COVID has accelerated the development of ghost kitchens and other brand offshoots that increase the potential footprint for brands and can help to future-proof earnings, should a second wave of COVID-19 require additional quarantine steps.

Third Party Delivery vs. In House + Restaurant Service Charges

Many brands are identifying new options to increase profitability of off-premise. Some brands are bringing delivery “in house” to avoid additional upcharges applied by third party vendors (both to the consumer and to the restaurant) and to manage promotions and control quality. Consumer awareness will likely accelerate the move away from third-party services, as more guests utilize delivery during stay at home restrictions and the changed future.

Pre-COVID, some restaurants experimented with adding service charges to manage cost pressures such as minimum wages increases. This was often poorly received by the public and, in some cases, attracted local media attention. Going forward, this would be a risky strategy, particularly given rising unemployment rates.

Hygiene and Sanitation Protocols Polarized Consumer Reactions

As brands are adapting their operating procedures and service flows to incorporate the new guidelines, some organizations have really “leaned in” and gone the extra mile to make the new experience part of their brand experience. New York-based Just Salad collaborated with Kenneth Cole for a reusable mask design, and Burger King owner RBI is considering adding masks to the required uniform long-term.

But how do all these new regulations affect the restaurant’s atmosphere? As restaurants have reopened with limited capacity, some operators are looking for ways to still create an enjoyable atmosphere and preserve the experience of a full dining room. Some of these examples include a restaurant in Virginia that filled its empty tables with dressed mannequins and a space in Thailand that opted for toy pandas to make customers feel more comfortable.

Guest reactions have been far from uniform in response to company initiatives designed to protect returning guests. The other challenge facing operators is the fact that consumers don’t trust fellow guests, despite their overwhelming (75%) trust that restaurants will do the right thing.

Despite pandemic, warmer weather encourages healthy eating

In April, consumers in our global insights survey reported (1) access to fresh/healthy foods and (2) nutrition as two of their three top food-related concerns. Yet, at the start of stay at home orders, consumers gravitated toward comfort foods both from restaurants and for at-home cooking. The pendulum may be shifting back, based on reporting by Restaurant Business, Nielsen and the Washington Post. In late April, Nielsen surveys indicated that Asian consumers say healthy eating has become more of a priority after the virus, and the Washington Post predicts that consumers will probably start to go back to the old routines of fresh and prepared foods.

Chains that cater to the younger generations (Gen Z and Millennials) are most likely to benefit from the addition of healthy menu options. In our global insights survey, we found the younger set are more adventurous than their older counterparts and dine out more frequently. Both young and old are worried about healthfulness, though the younger generations were most worried about weight control, calories and variety of fresh foods, while Gen X and Boomers cited their concerns were more about diet for health reasons, and scarcity concerned them more than variety.

Restrictions

  • Dine-in without restriction
  • Dine-in with limited capacity
  • Takeout/Delivery Only
  • Closed

Recovery

Brands are looking for solutions that optimize current opportunities and prepare for the next cycle

Our tech-enabled solutions help 100,000+ restaurants drive sales and profitability.

Select a solution to learn how RMS can help your brand through each of the stages:

Respond

Manage the crisis and continue.

Recover

Learn and emerge stronger.

Thrive

Succeed in the “new normal”.

Latest expert advice

How fast casual PDQ continued to serve quality to customers

Before March 2020, new menus could take a year to launch, with every item in every medium checked and rechecked. But... more
May 26, 2020

Restaurant CEOs on Leading Their Brands Now and Beyond Coronavirus

On April 29, Revenue Management Solutions and EZ CERT supported Franchise Times’ lively webinar discussion with Peter... more
May 13, 2020

Sense360 Briefing with Dora Furman

In this @Sense360 Daily Briefing, RMS VP Dora Furman answers operators’ pressing questions during these unprecedented... more
May 7, 2020
Respond

Understand changes in check composition and guest traffic.

Focus marketing efforts on targeted guests/checks.

Recover

Define the best price mix and promotions to optimize margin.

Identify your “new” customer base and what they are buying.

Thrive

Identify the customer types who respond best to specific promotions.

Common profitability questions

How does the current situation impact the results of a test we have currently in the market?

Unfortunately, it may have some impact on the test results. The situation may impact each store/market differently. You will most likely need to make adjustments, such as changing test periods, considering extending them and adjusting early indicative reads.

Should we reduce prices now to attract more customers?

We do not recommend reducing your prices right now. Instead, create bundles and offers that will entice your customers to come back. With most customers being advised to stay at home, think about offers and deals that focus on family meals, portions that could provide ‘left-overs' for next day, value offers that consider kids and support your staff.

Should we take price given the COVID-19 situation?

No, as of right now, we do not recommend making any price increases to offset the negative impact of the COVID-19 crisis, even if they were planned beforehand. Doing so could lead to negative repercussions on your brand image because customers won’t see when you made pricing decisions, only when you implemented them. Right now, brands should focus on talking about marketing initiatives and new operating procedures. Customers are paying attention to what you are communicating, and brands with a clear and empathic message will likely be best positioned to gain market share post-crisis.

With that in mind, now is the time to plan and build your post-crisis menu, pricing and marketing strategies for when business resumes. We learned from the dot-com crash back in the early 2000s and the financial crisis in 2008 that brands that were proactive with their strategies during turmoil were well-positioned to execute quickly once business resumed.

COVID-19 has already significantly impacted the restaurant industry. Unfortunately, no reasonable amount of pricing will be enough to offset or recoup some of the potential loss in traffic and sales. Even in areas of the U.S. and countries around the globe where authorities have not yet issued firm restrictions on restaurant and bar operators, we have clearly seen consumer behavior shifting to online channels pre-crisis. It is now essential that brands understand how much of this behavior is here to stay before making informed pricing decisions.

On a positive note, we will most likely observe an increase in consumer traffic once people return to their usual lives, especially in those areas now in lockdown.

Expert profitability advice

Sense360 Briefing with Dora Furman

In this @Sense360 Daily Briefing, RMS VP Dora Furman answers operators’ pressing questions during these unprecedented... more
May 7, 2020
Respond

Identify menu items per sales channel (e.g. delivery, take-out, 3rd party).

Recover

Decide whether to return to your full, pre-COVID menu, or extend you limited menu slightly.

Thrive

Engineer your menu to drive margin, attachment rate and frequency.

Common menu questions

What items should the brand include in their delivery and/or limited menu?

If possible, try to find a good combination of items that offer ease of execution and healthy margins. It is essential to minimize a patron’s time spent in restaurants and during food pickup to honor current social distancing measures.

Ease of execution:

Consider offering bundled items and a menu that will maintain its quality even after the delivery journey. To maintain consistency, select menu items that crew members in all locations can easily assemble and execute. Focus on items that can be packaged quickly to minimize wait time and maximize turnaround, especially if you are working with a smaller staff.

These considerations are particularly important if your concept is new to the delivery/takeout channel and you are in the process of shifting your team’s focus from dining in to off-premise service. Under normal circumstances, your customers might be turned off by ordering from limited menus, but in this new environment, you can expect that most customers will be understanding, adapt quickly and feel grateful that your doors are still open to them.

Overall profitability:

To sustain sales and gross profit, offset overhead cost and maintain cash flow, a speedy and limited menu is the answer. This allows you to remove low-margin items and focus on those that are more profitable and in high demand.

Make sure you build creative marketing and PR messages around your menu. Reward customers as they pick up their orders or have them delivered to entice them to reorder from you and share their positive experience with their online communities. In challenging times like these, positive messages travel well and help build brand loyalty for the future.

What key delivery initiatives should restaurants be thinking about?

Tip #1: Launch take out, curb-side pickup and delivery options if you have not yet done so.

Work at lightning speed and don’t overthink it. Two weeks ago, many fine dining brands had no to-go menu. One week later, they do as they recognized now is the time to get directly to-go. For delivery, don’t forget to include local providers. For a list of delivery services in your area, send a DM to https://www.facebook.com/thermda.

Tip #2: Create a limited menu that can easily be executed and is profitable.

To maintain consistency, select menu items that crew members in all locations can easily assemble. Focus on items that can be packaged quickly to minimize wait time and maximize turnaround, especially if you are working with a smaller staff. To sustain sales and gross profit, offset overhead cost and maintain cash flow, a speedy and limited menu allows you to remove low-margin items and focus on those that are more profitable and in high demand. And keep in mind: first impressions can make or break repeat orders, which are critical in this environment. Whether it’s staples or tape, seal the bag. When the fear of germs is so very top of mind, make it clear to your customer that their bag was impenetrable on its way from your kitchen to their front door.

Tip 3: Communicate, communicate, communicate.

Let your customers know what you are doing and how they can order from you. Make sure you communicate your new opening hours, which services are available, what menus they can order from, what offers you have in place, if you are supporting local emergency response staff, if they can support your business by buying local vouchers, etc. Basically, make sure they know what they can expect from you in these uncertain times.

Expert menu advice

How fast casual PDQ continued to serve quality to customers

Before March 2020, new menus could take a year to launch, with every item in every medium checked and rechecked. But... more
May 26, 2020

Restaurant CEOs on Leading Their Brands Now and Beyond Coronavirus

On April 29, Revenue Management Solutions and EZ CERT supported Franchise Times’ lively webinar discussion with Peter... more
May 13, 2020
Respond

Identify where franchisee support is needed.

Monitor financial ratios and debt covenants.

Recover

Discovery the locations that are under & over performing.

Determine the locations to prioritize efforts on.

Thrive

Recognize franchisees that are ready to grow.

Secure opportunities to optimize cash flow by P&L line item.

Expert financial advice

Restaurant CEOs on Leading Their Brands Now and Beyond Coronavirus

On April 29, Revenue Management Solutions and EZ CERT supported Franchise Times’ lively webinar discussion with Peter... more
May 13, 2020
Respond

Stay up to date on promotional tactics, pricing actions and economic outlook.

Recover

Tap into competitor insights on pricing and promotions.

Thrive

Benchmark against market leaders to evaluate whether to emulate or innovate.

Common consumer behavior questions

How can we best reach customers given the recent rise of digital use?

Create digital audiences with scalpel-like precision. Directly message those most likely to order delivery, online or carryout. Segment your messages to guests who have ordered from you online and from a third party; from those who have searched online for your brand; from guests in your e-club; and to look-a-like audiences who are likely to order online from your brand.

How can we use social media?

Your social presence is critical right now. Check and recheck social media accounts. Amid self-isolating and mandated shelter-in-place orders, it’s safe to assume social media will play an even greater role in our lives. Customer engagement will no doubt increase across all platforms. Pay attention to customer feedback regarding all facets of your brand: accuracy of order, packaging, menu options and delivery experience.

And don’t forget about positive news as well. If you restaurant is doing something to help your local community, let people know! You might inspire others to step up and help out.

What communications are important right now?

Now more than ever, it’s important to communicate your hygiene protocol. State on your website what you’re doing. Don’t assume the general public knows you’re checking temperatures before staff crosses your threshold or that everyone is wearing masks and gloves. Provide peace of mind. Go the extra mile and include a simple insert that tells customers the precautions you’re taking to make sure everyone who comes in contact with their order demonstrates the highest level of hygiene practices.

Share your initiatives on delivery as well. The greatest risks of virus transmission are (so far) associated with interacting with people, not food. Now is a good time to resurrect the childhood prank of ding-dong ditch and use it as a differentiator. The customer orders, and the order is then left at the door with no human interaction. Similarly, for curbside pickup, the less interaction, the better.

Expert customer behavior advice

Sense360 Briefing with Dora Furman

In this @Sense360 Daily Briefing, RMS VP Dora Furman answers operators’ pressing questions during these unprecedented... more
May 7, 2020

Consumer insights

Understanding the restaurant consumer in a COVID-19 world

In this multiple part series, we are analyzing responses of over 1,800 restaurant consumers from 3 major markets (US, UK, and Singapore/ South Korea/Taiwan) to understand their behavior and perceptions on the industry as the COVID-19 pandemic continues to unfold and impact throughout the world.

Series 6 – How did each gender’s relationship with food and their dining habits change during COVID-19?

To find out we analyzed responses from over 1,800 restaurant consumers from 3 major markets (US, UK, and... more
May 26, 2020

Series 5 – How did each generation’s relationship with food and dining habits change during COVID-19?

To find out we analyzed responses from over 1,800 restaurant consumers from 3 major markets (US, UK, and... more
May 15, 2020

Series 4 – U.S. vs U.K. frequent users

While everyone has been affected by COVID-19, that does not mean all consumers will react the same. In this series, we... more
May 5, 2020

Series 3 – U.S. vs Asia frequent users

While everyone has been affected by COVID-19, that does not mean all consumers will react the same. In this series, we... more
Apr 27, 2020

Series 2 – U.S. Frequent users

During the pandemic, frequent users in the U.S. only marginally reduced 'using' restaurants, are mostly concerned about... more
Apr 20, 2020

Series 1 – Common consumer themes

We analyzed responses of over 1,800 restaurant consumers from 3 major markets (US, UK, and Singapore/ South... more
Apr 13, 2020

#COVIDKindness

We’re in this together

In times like these, it is great to see the industry coming together to support each other and their countries. Here are some of the many incredible initiatives we have seen.

A new line of DC Comics superhero chocolate bars is coming out, but before you can get your hands on them, Hershey’s is making sure our heroes of today get them first! The new chocolate bars will go out to frontline workers before they hit the shelves.

Photo /Hershey's

The State of California announced its ‘Great Plates Delivered’ program, which bring three meals a day to seniors at risk. The program partners with struggling restaurants to rehire or retain staff, prepare meals and deliver them to those in need. Eligible seniors will be provided with 21 meals per week.

As part of its United for America initiative, Unilever is hosting its first annual Day of Service on May 21. The company will donate the equivalent of one day’s worth of the products manufactured at its U.S. factories to Feeding America and Direct Relief.

Vienna, Austria's capital, is distributing vouchers to its 950,000 households to re-energize demand for its restaurants, bars and beergardens. Recipients can use the vouchers from June to September 2020 in any of its 6,500 establishments. Single housholds receive 25 Euros and family households 50 Euros to help restart the industry.

Photo /Food Service

Pollo Tropical is giving away free kid meals to help Florida families struggling during COVID-19. The restaurant chain will be giving away a Kids Classic TropiChop Bowl and small bottle of water (no adult purchase necessary) every Monday through Friday at all of its 141 Florida locations.

Photo / Pollo Tropical

Cities across America are exploring the expansion of outdoor dining as a possible solution to restaurants' dilemma. Tampa temporarily closed a number of streets to allow restaurants to expand their dining spaces outdoors, and Cincinnati followed closely after. Washington, DC, Milwaukee, Berkeley, New York City and other cities have introduced similar measures.