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Restaurant menus are shrinking, thanks to the pandemic
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The COVID-19 pandemic and stay-at-home orders meant to keep the virus under control have hit the restaurant industry harder than almost any other. Many restaurants have scaled back their menus over the past couple of months, and those changes may be here to stay.
What a restaurant offers on its menu is a simple issue of arithmetic, according to Christopher Muller, professor of the practice at Boston University’s School of Hospitality Administration.
“You can’t have an extensive menu without a lot of employees,” Muller said. “You can’t have a lot of employees without a lot of guests or a lot of seats.”
But there weren’t a lot of guests under stay-at-home orders, so restaurants scaled back what they offered. Red Robin recently announced it was dropping more than 50 menu items for good. Muller said the real losers will be restaurant suppliers.
“For the vast majority of businesses, they have been buying from a handful of distributors,” he said.
Companies like US Foods and Sysco, which are like Amazon for the restaurant industry. Muller said those companies have lost between 75% and 90% of their business this year.
Alex Susskind, a professor of food and beverage management at Cornell University, said scaling back menus will take some pressure off restaurants so they can adapt to new social distance guidelines.
“It just kind of provides an opportunity for the restaurant operators to kind of reset, and it’s hard to do that when you’re in business, day in and day out doing stuff,” Susskind said.
The lockdown showed restaurants what people really want, said Amanda Topper, a food industry analyst with Mintel.
“Items that are really top sellers that are low-cost to produce. So things like burgers and pizzas and pastas,” Topper said.
Lockdown also let restaurants drop items that only do well in a handful of markets, according to John Quelch, dean at the University of Miami’s business school.
“The proliferation of those specialty local items over time will add complexity to supply chains,” he said.
The National Restaurant Association said eateries have lost $120 billion in sales in the last three months.
COVID-19 Economy FAQs
What does the unemployment picture look like?
It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.
Will it work to fine people who refuse to wear a mask?
Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.
How are restaurants recovering?
Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.
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