It’s inevitable that the businesses we see right in front of us are suffering greatly from COVID-19. But what about the food service industry?
Although physical restaurants are the face of the food industry, “…people don’t realize how many businesses come behind the restaurants… if they struggle, we struggle.” said McDonald, the Chief Executive Officer of Palama Holdings. [i]
Experts have advice on what it takes to bring restaurant businesses back to their peak level pre-pandemic. Tip #1: moving inventory is the key to any sort of success during this pandemic in regards to the food industry. [i]
Pandemic Effects on the Restaurant Industry
To keep food moving through its warehouses, Palama Holdings, holds three sales weekly out of its warehouse in Kapolei, HI. As well as a few more monthly across Oahu, HI. Some of these involve area nonprofits and others are held solely as a way to get food in the hands of the public, not to be wasted and thrown away. [i]
“The response has been amazing,” McDonald said. “We have a drive-thru, no-touch system, and food is reasonably priced.” [i]
US meat giant Smithfield Foods has invested a significant $350 million in preventive measures to combat COVID-19. The company incurred an overall loss of $72 million in Q2. But anticipates a performance rebound in the fall as COVID-related costs decrease with the progression of the autumn months.
On the other hand, Aryzta, a Swiss-Irish bakery group, disclosed a 23% decrease in revenues for June and a 36% decrease for May [ii]. While the group noted gradual sales improvement throughout August, they continue to grapple with enduring pandemic-induced effects.
Preparedness of the Food Industry
Experts sat down with large restaurant owners and got insight to what it’s been like continuing operations during this time. Leaders were asked if restaurants should have been better prepared for the global pandemic. “Do you really think anyone could have been prepared for this?”
RJ Melman, president of Lettuce Entertainment You Enterprises, responded. “A lot of our dining rooms have zero sales. I don’t think there are many businesses in general that have a plan for zero sales. It’s not that we’re not prepared for not having business due to an emergency. We have business interruption insurance for things like fires, but no one could have planned for an entire industry being shut down for months at a time.” [iii]
The State of the Restaurant Industry
Although restaurants have been struggling since March, fortunately numbers might be beginning to go up. Keith Pascal, former Chief Concept Officer of Panera Bread, says he’s seeing numbers increase incrementally each week.
More of the store’s locations implement creative ways to drive traffic to stores such as digital access, new offerings, and curbside pickup. [iii] Inventory is one of the biggest issues that restaurants are facing – tracking inventory, anticipating inventory orders, resupplying as more people are starting to get back out and go out to eat, etc. How can restaurants handle food processing while making sure they have everything they need to be successful? [iii]
Should The Food Industry Fully Reopen?
While restaurants are attempting to reopen, they will make many changes. For example, they will rearrange floor plans for social distancing and establish one-way entrances and exits to the building. They will expand outdoor seating and implement mobile device ordering and payment.
“Although necessary, protocols alone will likely not be sufficient to enable restaurants to meet the most important prerequisite of successful reopening—restoration of customer confidence and trust while maintaining the hospitality that is an essential part of the restaurant experience.” [iii]
Businesses are still facing many battles as they strive to remain open and operational. However, with the community’s assistance and companies like Rogers Electric managing electrical, lighting, and construction needs. National restaurants are confident they can make a comeback. The pace at which businesses return to success will be determined by consumers and the government. Visit the Rogers Electric blog for additional restaurant industry updates.