Prediction 8: Dine-in “Experiences” will be significantly curtailed as 30% of restaurants go out of business.
NOTE: this was written in May but I got around to posting it now. Still, much of it is relevant.
Currently, approximately 3% of restaurants have closed down due to the pandemic. Expect that to grow to 20-30% by the time we are done. As restrictions open up, restaurants are going to have to comply with new sanitation/disinfection measures as well as physical isolation including having chairs not facing each other, shorter dining durations, preferences towards outdoor dining, and physical separation. Given a likelihood to wear masks, the once casual, enjoyable experience will become much more stressful with constant reminders of the hidden virus. Due to these factors, I expect in-person restaurant traffic will remain at 30-50% lower levels for the next 12-18 months. Fast-food, takeout, outdoor and short stay restaurants will handle this better as people will be more likely to do shorter trips. Restaurants that are well suited to takeout/delivery will shift almost exclusively to that model as they will not be able to financially support keeping a restaurant open at max 50% capacity.
Many restaurants that are suitable for pickup/delivery will survive based on that model. Think Thai, Burmese, Chinese – where the cuisine is the main driver to the restaurant (vs the indoor experience) and the cuisine can hold up to a 15-minute wait in a box.
Luxury/fancy/experiential restaurants catering to long meals and business meals will suffer the most either shutting down or doubling down on exclusivity and price. Restaurants with the capability will expand their outdoor seating, including -with a city’s help – expanding into sidewalks and streets. Food trucks -which cater to to-go and outdoor eating – should also thrive.
- Expect a huge increase in the convenience of curbside pickup. Rather than paying the price (and suffering the wait) for delivery, restaurants will allow you to schedule a time to pick up, text when you have arrived, and then drop the item in your car while you double-park. Popularity for curbside pickup will grow as people realize it is faster and more pleasurable than going into a store for a pickup.
- A new “contactless pickup-only” style restaurant will emerge that only provides contactless pickup. Think of it as the next generation of drive-through. Starbucks and Sonic have shown this model to work and it will continue with others.
- Expect luxury restaurants to pivot to completely “private dining” with pods of isolated private, highly ventilated rooms – perhaps each with a virus destroying ventilation device like a Molekule Air Pro RX.
- Expansion of food trucks and extensions of “Off The Grid” type programs where groups of food trucks will support a park or open area with chairs and outdoor seating.
- “Ghost Kitchens” – Kitchens and restaurants made entirely for delivery services like UberEats.
- Tools to enable online ordering for food trucks.
- Companies offering disposable dining ware should see a long-term explosion in growth.
If you currently are working on one of these opportunities or want to work on them, please contact me at charlie at iamcharliegraham dot com