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Restaurants Grapple With WFH Stickiness In Post-COVID Future

Restaurants Grapple With WFH Stickiness In Post-COVID Future

June 07, 2021 at 10:28PM
by PYMNTS

Work-from-home (WFH) is here to stay. With this dramatic change in how and where consumers are spending their days, restaurants are at a crossroads — these changes can be a challenge or an opportunity, depending on how well restaurants can adjust.

“It seems as though work life has changed forever,” Tim Tate, director of business development at New York City specialty coffee chain Think Coffee, told PYMNTS in an interview. “The amount of remote work job postings has skyrocketed, many businesses are selling off portions of their office space, and some are going hybrid if they call their employees back to the office at all.  The opportunity to take care of the employee’s coffee needs at home likely exists indefinitely.”

A recent Gallup poll found that, in April, 51 percent of U.S. workers were still doing their jobs remotely, and that this number jumps up to 72 percent when you look just at white-collar workers. Additionally, data in the PYMNTS study The New Digital Consumer: How The Pandemic Has Reshaped Consumers’ Shopping find 83 percent of people working remotely intend to keep doing so at least somewhat as often as they do now, even once they are allowed to return to the office. Plus, a survey conducted by Arizona State University researchers find that 72 percent of employers plan to offer more flexible work options than their pre-pandemic policies once contagion concerns subside.

For restaurants in business districts that have relied on work lunches to drive sales, this poses a challenge. Space in these districts is often costly, and among these restaurateurs, the prevailing mood is one of uncertainty.

“We don’t know the new normal,” celebrity chef Ming Tsai told CNBC. “Are half the people going to come back to work and the other half are going to stay at home, or is it two-thirds? Whatever it is, it greatly affects restaurants that rely on the lunch business, because right now there’s none.”

In addition to hurting in-restaurant lunch sales, the turn toward WFH has also taken a significant toll on breakfast sales, though McDonald’s noted on a recent earnings call that breakfast sales were beginning to make a comeback, helped by the company’s investments in its bakery offerings.

“We’re acutely focused on this daypart, because we believe that certainly, as some consumer habits return to pre-pandemic ways of life, that the breakfast daypart will continue to come back,” Joseph Erlinger, president of McDonald’s USA, said on the call.

On the other hand, restaurants that are able to take advantage of the pandemic-prompted snacking surge have the opportunity to drive sales outside of traditional mealtimes. An NPD report notes that afternoon snacking visits to restaurants are up mid-single digits, and that this daypart has gained in share of all occasions. Restaurants that offer snack-friendly menu items will be well positioned to take advantage of this shift.

A National Restaurant Association survey from March looking at overall changes in trends notes that this shift towards snacking is most pronounced with millennials.

The results of the survey note that, in early spring 2021 as the vaccine rollout began to pick up steam, on-premises dinner was up, off-premises dinner slightly down, on-premises lunch up, off-premises lunch up, on-premises breakfast slightly up, and off-premises breakfast slightly up. All on-premises categories remained below pre-pandemic levels, not surprisingly.

While costly real estate spends on popular business districts may not prove a winning strategy in the post-pandemic future, restaurants that have developed a strong off-premises business in takeout and delivery sales can continue to benefit from the WFH crowd.

“We’re at one of these inflection points where people are asking ‘what’s going to happen in the future?’” Andrew Robbins, co-founder and CEO at restaurant Software-as-a-Service (SaaS) company Paytronix, told Karen Webster in an interview last month. “Because one could imagine that, with a return to [on-premises dining], online ordering should go down. What we’re seeing in our numbers is that it’s part of some people’s lifestyle that they would like to keep.”

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