Restaurant Industry News Roundup: November 2020
‘Tis the season! As the weather gets colder, restaurants continue searching for solutions around dining restrictions. Across the pond, the UK Government’s summer initiative had mixed results. Consumer spending data predicts that gift card sales will rise due to digital payment options and ghost kitchens, which continue trending upward as a solution to revenue loss across the industry. The weather outside is getting frightful, but this news is delightful (with coffee!).
UK Pubs and Restaurants Claimed £849m in “Eat Out to Help Out” Scheme
Launched by the UK Government, the Eat Out to Help Out initiative was a strategy to boost the economy after the first national pandemic lockdown. Throughout August, pubs and restaurants provided discounted meals on Mondays, Tuesdays, and Wednesdays. During the initiative, diners received an average £5.24 discount per meal. Based on data from Her Majesty’s Revenue and Customs (HMRC), more than 49,000 businesses were a part of the initiative by September, including McDonald’s, Pizza Hut, and Nando’s. Alternatively, experts blame Eat Out to Help Out for accelerating the spread of the Coronavirus in the country. Based on the results of a study done by the University of Warwick (collated in the aforementioned link), it’s predicted that the initiative could have led to one-sixth of case clusters during the summer.
Consumers Expected to Spend 29% More on Restaurant Gift Cards, study says
According to Blackhawk Network, consumers are projected to spend 29% more on restaurant e-commerce gift cards than in 2019. Across industries, dining gift cards are the best-selling during the holidays. Due to the pandemic, one-third of consumers have started holiday shopping. Furthermore, the data shows that digital cards sold on merchant sites are up by 74% this year. Gift cards may be a critical solution for lower revenue quarters. Eighty percent of consumers who redeem their gift cards at restaurants spend more than the gift card’s value when they use one. When it comes to QSRs, they have noticed a 6% increase in check size when customers order online with a gift card.
The pandemic has pushed restaurants to digital methods and contactless payment options. In 2018, 55% of customers said they’d be interested in giving or accepting digital gift cards to add to an app or digital wallet.
Red Lobster Opens its First Delivery-Only ‘Ghost Kitchen’ in Chicago
As the ghost kitchen trend grows, Red Lobster opened a virtual location in the South Loop of Chicago in November. That location will cook and deliver food to nearby neighborhoods, including River North and the Prairie District. Delivery services will also be offered through DoorDash, Grubhub, UberEats, and Postmates. An initiative through DoorDash has allowed Chicago restaurants to match with ghost kitchen operators to help offset the loss of revenue from the pandemic.
Other companies that are making moves in the ghost kitchen space include:
- CloudKitchens is created by Uber co-founder Travis Kalanick in 2016 that buys cheap real estate properties and turns those spaces into kitchens exclusively for food deliveries. The company has raised $400 million in external funding.
- Grubhub’s partnership with Lettuce Entertains You to deliver meals from Whole30 recipes.
- 2nd Kitchen – allows businesses without kitchens to establish virtual kitchens through serving food from nearby restaurants.
How has the pandemic altered your course? Click the link below for our page containing helpful restaurant resources for the COVID-19 outbreak.
About the Author
Devyn Nance is the Marketing Coordinator at QSR Automations. She graduated from the University of Louisville with a bachelor’s degree in Communication and from Loyola University Chicago with a master’s degree in Global Strategic Communication. She considers herself an (amateur) profiler – trained solely from watching every episode of Criminal Minds. Outside of work, Devyn loves to shop, travel, hang out with friends and family, read, and watch shows on various streaming platforms.