New Study Documents Pandemic's Effects On Online Ordering and Delivery
Restaurant capacity restrictions and customer concerns about visiting restaurants led to a 72% increase in enhanced delivery and digital ordering capabilities in restaurants, according to the 2020 Restaurant Franchise Pulse survey by TD Bank. Online ordering and delivery nearly doubled as a percentage of total restaurant sales during the pandemic.
While 86% of respondents reported having delivery and online ordering prior to the pandemic, these offerings now account for a larger percentage of their sales, climbing from 20% in 2019 to 39% in 2020. Though a product of the pandemic, restaurant owners see the value of these services long-term. Last year's survey found only 12% of franchisees planned to invest in delivery and 25% in mobile ordering in 2020, which has since jumped to 63% planning to invest in delivery and 69% in mobile ordering in 2021 – a 51% increase in delivery and a 44% increase in mobile ordering.
"Franchises have invested a tremendous amount of time, money, and creativity in delivery and mobile ordering, but not all restaurants have adapted to off-premise sales to the same degree as the QSR space," said Mark Wasilefsky, Head of Restaurant Franchise Finance Group, TD Bank. “We expect the shift to off-premise sales to be long lasting, and due to broad consumer acceptance of its added convenience, we believe it will likely become a permanent aspect of many franchises' business models."
The study found pandemic-related restrictions forced franchisees to make multiple changes to their operations as federal, state and city guidelines evolved. Here are some of the ways operators catered to customer preferences and government guidelines:
- Implemented enhanced delivery services/online and mobile ordering (72%)
- Limited hours of operation (50%)
- Pivoted to non-traditional payment methods (42%)
- Created a more limited menu (38%)
- Added drive thru capabilities (38%)
"The consumer demand is clear as restaurants reopen nationwide – people still want to go out, be social, and are tired of cooking at home. However, franchisees' survival will depend on their creativity. We've seen restaurants pivot during the warmer months and now they must confront the next challenge – how to attract and retain business during colder months," said Wasilefsky.
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