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The Spoon

Daily news and analysis about the food tech revolution

Coronavirus

The Spoon team is working hard to bring you the latest on the impact of COVID-19. Bookmark this page for our full archive on the pandemic and how the food industry is embracing innovation to fight back.

On April 6th, The Spoon had a full day virtual summit on COVID-19 strategies for food & restaurants. You can watch all the sessions from our virtual strategy summit here.

You can also check out this COVID-19 resource page for food and restaurant industry.

#TheGreatAmericanTakeout Launches ‘Back for Seconds’ Campaign

Restaurants once again have the opportunity to push their off-premises offerings on social media via TheGreatAmericanTakeout, an awareness campaign organized by Los Angeles-based ad agency High Wide & Handsome and a coalition of restaurant brands including California Pizza Kitchen, Panera, The Habit Restaurants, Inc., Torchy’s Tacos, and many others. Today, U.S. consumers are encouraged to place at least one delivery or pickup order with a participating restaurant as a way of showing support to businesses.

The idea behind the campaign, which started last week, is to use social media to drum up more awareness around how badly restaurants are struggling as states mandate dining room closures to help slow the spread of COVID-19. 

“This is no longer about the survival of individual restaurants,” Russ Bendel, Habit Restaurants CEO, said in a statement about the original campaign last week. “It’s about the future of our industry. And time has run out. Together, we must act to support each other and our communities in unprecedented ways.”

Last week’s online event gave restaurant sales a much-needed boost, if only for a day, while #TheGreatAmericanTakeout was a trending topic on Twitter for much of the day.

Organizers said they would be pushing the campaign again this week and in subsequent weeks.

Whether that’s enough to measurably help restaurants while dining rooms remain closed will depend on how much consumers can be inspired to act when it comes to ordering meals. It’s one thing to generate likes and tweets on social media. Getting consumers to consistently spend on restaurant food each week at a time when layoffs are happening and we’re racing towards a recession might be difficult — though people with enough disposable income to afford said meals should definitely participate. There is also the question of how long the allure of the campaign will hold up over several weeks’ time. Participating restaurants could aid this by offering more incentives for takeout orders in the form of promotions (e.g., free dessert).

Takeout, in particular, is helpful to restaurants right now because they pay a much smaller commission fee (or none at all) per order, unlike delivery orders, where businesses often own third parties 30 percent of each transaction. And as one restaurant chain founder told me recently, it’s also a way for customers to tip the staff making the food, not just the folks driving it to your door.

Customers who order restaurant takeout or delivery today are encouraged to snap a picture of their meal and post it with #thegreatamericantakeout. More details can be found here.  

Newsletter: COVID-19 Could Help Us Build a Better Restaurant

Welcome to the first-ever Weekly Spoon newsletter that’s entirely focused on restaurant innovation. That we chose to launch this just as a pandemic is sweeping across the globe is entirely intentional. Of all the food tech sectors out there, none has been hit so hard or will change — forever — as drastically as the restaurant biz.

With that in mind, let’s kick this thing off by not rehashing the gloomy stuff. Instead, let’s highlight some ways in which the current restaurant business meltdown is spurring a ton of initiatives that could make a better overall industry in the long term — if we let it.

The Virtual Tip Jar Will Stick Around

As anyone whose ever waited tables, tended bar, or delivered pizzas knows, tips are an important portion of workers’ incomes. With most bars and dining rooms closed right now, an astounding number of what are basically virtual tip jars have popped up online. We first got wind of this last week, when we came across a site called chatt.us that lets at-home drinkers leave tips for service workers in Chattanooga, Tenn. via Venmo or CashApp. 

A little more digging uncovered more of these virtual tip jars in, well, pretty much every state from Maryland to Idaho. One site in particular, serviceindustry.tips, lets you choose specific cities from a list and direct your funds to workers in that area from a very user-friendly web interface. Others are simple spreadsheet interfaces, though no less popular from the number of entries on some of them.

While these virtual tip jars can’t make up for the lost wages and job layoffs many restaurant workers now face, they could at least provide some aid to those currently struggling.

They could also be a valuable tool for the restaurant industry even when dining rooms re-open. As one restaurant owner explained to me recently, in-house staff prepping the off-premises orders don’t see any of the tips left through third-party ordering platforms. A virtual tip jar could be a way for customers who wanted to hand over a little extra to tip those employees for their work. There are also well-documented issues around tipping delivery drivers in general. Since fewer folks seem to carry cash these days, a virtual tip jar could be a way to bypass that aspect of the platform, thereby making sure it’s the worker who gets the tip — not the tech companies.

Ditto for Contactless Delivery and Payments

Three months ago “contactless delivery” wasn’t even a phrase, at least not in the vernacular sense. In an effort to stem the spread of coronavirus worldwide, what started in China (see above image, courtesy of Yum China) has now quickly caught on. All the major delivery platforms as well as grocery sites like Instacart and individual restaurant chains now either use contactless delivery as the default option or make it clearly available through their apps.

I doubt we’ll revert back to the old method once this horror show is over.

At their most basic, contactless delivery methods as well as contactless payments are just more hygienic. Fewer germs can spread when cash and cards aren’t being handed back and forth over a counter, or when customers and their delivery couriers stand a certain distance apart during a drop-off. I doubt I’m the only person who’s ever ordered delivery while having bronchitis. Contactless delivery would go far in protecting workers — many of whom do not get paid sick leave — from illnesses their customers might be carrying while they’re stuck at home. Vice versa, too.

And if this look into China’s (sort of) newly reopened restaurant scene is anything for the rest of the world to go by, mobile payments will see a boost, too. More customers will be using apps like Apple Pay, CashApp, and Google Pay to avoid constantly handing over a credit card.

Simpler Menus Will Beget Better Service

“Pare down your menu” is a directive I’ve been hearing a lot as restaurants quickly pivot to serving customers through takeout and delivery channels. That means offering only the items that are easy to produce, will travel well, and are ones that customers actually want. 

That’s not breakfast, at least not right now. In a statement this week, McDonald’s announced it was temporarily pulling breakfast items from its menu and will focus on serving its most popular items. Taco Bell also nixed breakfast items for now. More chains are likely to follow.

Of course, these moves are in response to the potentially billions of dollars the restaurant industry will lose over the next few months. I suspect, however, that slimmed down menus could actually improve certain aspects of the restaurant industry, particularly where tech is concerned. Have you ever tried to navigate a Taco Bell self-service kiosk? Finding Waldo inside Google Maps was an arguably easier task.

Smaller menus could also speed up times in the drive-thru, improve AI-powered upsell recommendations, and use fewer ingredients overall, thereby reducing food waste.

In no way am I suggesting that menus need to look like this one from 1973. And who knows? Breakfast and Monster Tacos might go back on the menu at some point. But maybe this strange, unsettling shift in which we now find ourselves can show us that simpler menus leads to better experiences for everyone involved.

Keep on truckin’,

Jenn

Kitchen United Is Hosting an Online Event to Help Restaurants Make Sense of the Stimulus Package

In an effort to help restaurant operators decipher what the $2 trillion stimulus package means for them, Kitchen United is hosting a free webinar tomorrow, according to a company press release emailed to The Spoon. The event, slated for Tuesday, March 31, will be an “instructional webinar for restaurant operators of any size” to better understand how they can take advantage of the stimulus package. 

President Trump signed The Coronavirus Aid, Relief and Economic Security Act into law on Friday. Among other things, it will provide $803 billion in loans to businesses, $349 billion of which is dedicated to small businesses. 

As with most legislation, the stimulus package is massive and chock-a-block full of legal jargon, and that’s where Kitchen United is stepping in. The webinar will help restaurants understand if they qualify for any relief, how much they can expect to receive, and how to apply for it. KU’s CFO Michael Montagano will host the online event, sharing tips on the above topics and more. Jim Collins, who in addition to being CEO of Kitchen United is also a restaurant owner, will also share his experience and thoughts around the process of applying for relief. 

It’s an understatement to say restaurants are struggling in the wake of forced dining room closures happening around the country. While businesses may remain open for delivery and takeout orders, the reality is that switching to those off-premises formats isn’t an overnight process — nor an affordable one, in some cases. Some restaurants are already saying they’ll have to close locations permanently, while others have furloughed employees. And with the social distancing guidelines now extended through the end of April, the struggle for restaurants is far from over. 

Collins recently told me that lack of information and misinformation are two big problems restaurants face amid this crisis, which is presumably what next week’s webinar discusses. “We need to start to address that, but then there are series of concrete things we’re working on to see if we can’t help folks start to deal with all of this successfully,” he said. 

Collins added that Kitchen United is working on a number of forthcoming initiatives designed to help restaurants during this time. 

Those interested in joining next week’s webinar can go here for details. A replay will also be made available via the Kitchen United website.

Here’s a Rundown of Restaurant Tech Deals Available to Struggling Businesses

As more restaurants are forced to pivot to off-premises models in the fight to stay alive, it seems more tech companies are coming to market with hardware and/or software meant to speed up, simplify, automate, and more efficiently manage delivery. And in the spirit of simplifying things, I’ve rounded up a number of those solutions here that address different parts of the off-premises model. 

Just remember: there are tech solutions that solve problems and, as a friend of mine once said, tech solutions in search of problems. Reduced fees or no, not every product or service is going to be useful, and what improves one restaurant’s business could be a total distraction for another.

Order-ahead app Allset has a contactless pickup option at participating restaurants. For all existing restaurant partners that provide the contactless pickup option at their stores, the company is waiving commission fees.

Delivery orchestration platform Bringg launched its BringgNow feature months ahead of schedule. The new feature helps larger chain restaurants, among other businesses, manage delivery orders, track drivers, make last-minute adjustments, and integrate with third-party platforms. BringgNow is free to new users at this time.

Chowly, whose tech helps manage delivery orders, is offering a “no cost” starter package to businesses needing to quickly pivot to delivery models as more cities and states shut down dining rooms.

DailyPay, an app that lets restaurant workers access their earnings immediately, has waived all access fees so that individuals using the service can get their earned income immediately. 

POS and guest management software platform Epicuri is waiving set up fees and offering a 60-day free trial with no commitment for restaurants right now.

Paytronix just launched a new cloud-based solution that lets restaurants add online ordering and delivery to their existing POS systems and, for those who want to conduct delivery in-house, integrate with DoorDash.

Presto is giving away free self-service kiosks that at this point can be used for pickup orders. In an email to The Spoon, the company also said it is also “offering Presto Quick Serve drive-thru kiosks, staff handhelds, and smartwatches completely free.”

Ordermark, a software-hardware platform that streamlines the process of accepting, managing, and fulfilling delivery orders, is waiving all setup fees right now, according to an email sent to The Spoon.

Restaurant order management platform Revention is offering an Online Ordering and Delivery Starter Bundle for a reduced price. It includes a POS terminal, optional DoorDash on-demand delivery service, and remote installation.

Guest management platform Sevenrooms now offers a feature called Direct Delivery that gives restaurants more ownership over their customer data on delivery and takeout orders. For the next 90 days, existing and prospective Sevenrooms customers can add the feature on at no extra cost. 

End-to-end platform Toast has eliminated software fees for restaurant customers for the next month and will provide those customers with free access to its digital ordering, marketing, and gift card programs for three months. 

Operations platform Zenput says it is “offering operators that are new to Zenput – at no charge or obligation through the end of June 2020 – the ability to use our platform to build-out, communicate, and ensure compliance with their COVID-19 processes.”

Online food ordering platform Zuppler is offering free setup and reduced pricing for restaurants and caterers who want to add online or Google ordering to their websites.

Over the coming weeks, we’ll know more about which products and services are most beneficial to restaurants trying to survive the current situation in which the industry finds itself. In the meantime, drop us a line if you know a company or product you think should be on this list.

Survey: 3% of Restaurants Are Permanently Closed. More Will Follow

The National Restaurant Association this week released some rather gloomy statistics around COVID-19’s impact on restaurants so far. A survey of more than 4,000 U.S. restaurant owners and operators found that 3 percent have already permanently closed their restaurants, while another 11 percent say they anticipate doing so within the next 30 days.

Those that have remained open (at least for off-premises orders) have also had to make adjustments. Besides the switch to delivery and takeout orders, restaurants have also had to reduce staff as well as cut back their operating hours.

On that note, even mega-chains have not been immune. This week alone, The Cheesecake Factory furloughed 41,000 employees and is in talks about possibly deferring and/or adjusting its rent. Yum Brands, which owns Pizza Hut, Taco Bell, and KFC, has outright closed 7,000 restaurants around the world, which affects hundreds of jobs. McDonald’s completely shuttered operations in the U.K., and has reduced hours (and menu items) in the U.S. 

According to The Association, roughly half of restaurant owners/operators “anticipate more layoffs and hourly reductions over the next 30 days.”

This infographic, also from The Association, breaks down the situation and its unsettling numbers pretty clearly. Notably, it states that “Restaurants can’t just switch their operations over to takeout and delivery and be fine. This is not an option for everyone in our industry.” And indeed, only 54 percent of operators/owners surveyed by The Association have changed their business model to off-premises for the time being.

Unlike QSRs, which typically offer food that travels well and was designed to eat quickly, many restaurants specialize in meals meant to be eaten in the dining room. It’s not a matter of simply throwing existing dishes in a box, and part of developing an off-premises-only model involves adjusting the menu. More items that travel well and family-style options are popular recommendations for restaurants.

Even so, doing delivery is expensive. Industry figures are telling businesses to join as many third-party platforms as they can right now — no small feat when you consider the exorbitant commission fees. Some companies, which are essentially third-party aggregators for third-party delivery platforms, can speed that process up by handling the bulk of the work. They do not necessarily guarantee better commission rates for restaurants, though.  

All of which is to say, unfortunately, we can expect the number of employee layoffs and furloughs, shuttered operations, and reduced hours to keep going up, at least in the very near future. The $2 trillion stimulus package that was passed this week will offer some relief for restaurants. The bleak reality is that it probably won’t entirely stop the bleeding.

Grocery Chains Hy-Vee, Woodman’s and More to Offer Free Delivery for the Elderly

The ability for folks over the age of 60 to get groceries is a big concern during this pandemic. Stores are creating special shopping hours for the elderly, I’m Instacarting my septuagenarian parents, and starting today, more than 2,000 grocery store locations across the country will offer free grocery delivery for those over 60 years old.

According to a press release emailed to us this morning, Hy-Vee, Woodmans, Kowalski’s Markets and “hundreds of independent grocers” such as Piggly Wiggly, LifeThyme Natural Market, Le District and Matherne’s will all be waiving delivery fees on orders fulfilled by DoorDash for those 60 and older.

DoorDash is leading the effort with participation from grocery solutions Freshop, GrocerKey, Mercato and Rosie. Customers will have the option of no-contact delivery. It’s not quite a blanket solution as there are some holes in coverage and some fine print, as outlined below. Here are the specifics from the press announcement:

  • Hy-Vee:  Starting March 31, Hy-Vee will offer free delivery to individuals who are 60 and older as well as expectant mothers and those who are considered high risk for illness in communities where Hy-Vee Aisles Online delivery orders are fulfilled by DoorDash. These customers will be able to use a designated promo code at checkout when they place their order through hy-vee.com/grocery. The promotion with Hy-Vee will cover up to 20,000 deliveries. 
  • GrocerKey: Partnering with market leading retailers throughout the U.S. and Canada, GrocerKey provides a full stack retailer branded eCommerce platform built for independent and regional grocery chains. GrocerKey also provides full service solutions, including in-store labor to pick and pack orders for fulfillment. In partnership with DoorDash, Kowalski’s, and Woodman’s, GrocerKey is extending free delivery to customers throughout Minnesota, Wisconsin, and Illinois (details below on how to receive free delivery).  

    Woodman’s: Log in to your account on ShopWoodmans.com. If you are a new customer, please create an account first and then start shopping. The discount will be available through May 1. 

    Kowalski’s: Log in to your Kowalski’s On The Go account. If you are a new customer, please create an account first and then start shopping. The discount will be available through May 1. 
  • Mercato: Mercato provides online ordering and same-day delivery from high-quality independent grocery and specialty food stores across the country. To sign up for unlimited free delivery from any one of Mercato’s 900+ participating stores until May 7, visit Mercato.com, input your delivery zip code, and choose products from any of the stores in your delivery area. During checkout, you can sign up for a free trial of the Mercato Green delivery membership program, input the promo code OVER60, and you will be prompted to put in your date of birth. When the delivery arrives, you will also need to show ID verification to the delivery driver. [Ed. Note: This does not seem like no-contact, come on, Mercato, relax.]
  • Rosie: Rosie is the preferred eCommerce partner to independent retailers such as Rosauers Supermarkets, Super 1 Foods, Macey’s, and Gourmet A’Fare and many more. Find a full list of stores here. To sign up for free delivery through May 7, head to Rosie and use promo code “DDFREE” at checkout for nearly 200 participating retailers.
  • Freshop: Freshop builds eCommerce platforms for over 2,000 of the nation’s leading grocers and specialty retailers including Foodtown, Fisher’s Foods, Brookhaven and Hays and is adding 300+ stores a week in support of COVID-19 efforts. DoorDash has enabled many Freshop stores to start offering delivery during these challenging times. Learn more at https://www.freshop.com.

Today’s free delivery announcement follows the announcement earlier this week from ridesharing company, Lyft that it would be providing meal deliveries to the elderly and school kids.

Hold on to these bright spots, the dark times aren’t over yet.

COVID is Migrating All My Food and Beverage Shopping to Online Mail Order Boxes

We’re all waiting to see what permanent changes the COVID-19 pandemic will bring about in our daily lives (handshakes, hugs, etc.). At least in the Albrecht house, after the worst of it subsides, regular, in-person trips to the grocery store may be a thing of the past.

Even before our home state of Washington was given a shelter-in-place order, we were pretty hardcore about our social distancing. I tried various online grocery shopping methods (to varying degrees of success), and have only been to the supermarket once because we ran out of milk (and even that trip out was filled with gloves and hand sanitizer).

Given that we don’t know how long this social distancing will last, this past week I explored all the online ways I could find to replace old habits. With the goal of maximizing social distancing and minimizing human contact, here’s what I signed up for.

  • CrowdCow for proteins. I also looked at ButcherBox, but it wouldn’t ship until the end of April. CrowdCow will deliver this weekend. (Sidenote: I can’t wait till someone creates an alternative protein box subscription so I can subscribe to Beyond and Impossible plant-based meat.)
  • Full Circle for fruit and veggies. I haven’t received a box yet, so I’m concerned about what will actually be in there (i.e., month after month of eggplant), but it has the bonus of also supporting farmers.
  • Smith Brothers for milk, egg, yogurt and other staples.
  • Amazon Subscribe and Save for my morning tea, and I’m considering one of the coffee subscriptions Catherine wrote about to keep whole beans coming to the house (and maybe some sort of booze club, depending on how long we’re all cooped up).
  • And I’ll still use Walmart online for curbside pickup of last minute items or cleaning supplies.

What’s missing from this list is meal kits, which are also seeing a bit of COVID-induced resurgence. I dabbled in meal kits a bunch of years back when Blue Apron was first coming on the scene. I didn’t like all the work it took then and I’m not thrilled about the prospect now, so I’m skipping those altogether.

All these mail order boxes aren’t just about replacing trips to the grocery store. They also help maintain a pipeline of food in the house. Knowing that each week/month a box will arrive with what we need gives me one less thing to worry about in a world filled with plenty of other things to worry about. (Granted, society could break down altogether, but I can cross that bridge when I get to it.)

Ordering food online by subscription isn’t new or rocket science, and perhaps I’m overreacting to any potential dangers lurking at the supermarket. But some of these services are ones I’ve been eyeing for awhile; the coronavirus just nudged me into action. For instance, we still eat meat, and it will feel better to patronize smaller farms via CrowdCow. Same for the fruits and veggies.

Will my subscriptions to these boxes stick around once the outbreak abates? Who knows! At that point I’ll just be thankful there’s a world to emerge out into.

Like Local Farms? You Better Step Up Now or They’re Going to Disappear

Certain food sources, like e-commerce grocery sites and meal kit companies, are seeing a boost in sales in the wake of the COVID-19 pandemic. At the same time, many parts of the world are shuttering farmers markets and restaurants, eliminating key revenue sources for local farmers. So how can those farmers survive in our new coronavirus reality?

Unfortunately, it won’t be easy. Small farmers make a significant chunk of their money from these markets or selling to restaurants — which, as you’ve probably noticed, are also struggling. The numbers are discouraging: Civil Eats pointed to an analysis of the impacts of COVID-19, predicting a $689 million decline in sales from March to May 2020 for farmers who sell at local markets. It’s especially tricky for farmers who sell perishable goods, like eggs and produce, which might go bad while their sales channels are blocked.

Some farmers and supporters are fighting back by making a petition to designate farmers markets in areas like Seattle, where they’ve been shut down, as essential. I think that makes sense. People are already shopping shoulder-to-shoulder in grocery stores, way closer together than six feet. Arguably, it’s less dangerous from a public health standpoint for them to shop outside in the open air?

One solution for farmers could be to move towards selling more CSAs, or Community Supported Agriculture. With a CSA, individuals can buy a share in a farm’s output, which is delivered either to their door or a pick-up point, usually once a week. It’s a way to continue to get local produce and support farmers without having to risk cross-contamination in a farmers market, if those are even still available. Clearly people are interested — according to Yelp, deliveries of CSAs have gone up 405 percent in March.

Certain online platforms are also facilitating online sale of local foods. MilkRun in Portland, Oregon, for example, is an online marketplace connecting people with local farms in their area. MilkRun’s CEO and Founder Julia Niiro told me that the company’s orders have increased more than 6 times since the start of the crisis with “no signs of them slowing down” as farmers markets close. Even if you aren’t in the Portland area, Niiro is urging diners to buy from local farmers wherever they can. “If you want to be able to get beautiful, local food at any restaurant after this crisis is over, you need to buy directly from small farmers now,” she told me.

Restaurants are also thinking of creative ways to support farmers. Naked Farmer in Tampa Bay, Florida, which was slated to open its doors this April, has instead pivoted to open a digital farmers market. People can order locally-sourced foods through either the Naked Farmer website or UberEats, and can get their orders at a pick-up zone or via delivery. In Seattle, Eric Rivera, who’s been especially innovative in the face of COVID-19, is partnering with local farmers to sell bags of locally grown vegetables for pickup at his restaurant. Diners can also add it onto their delivery order from his restaurant, Addo.

Some existing online farm-to-diner sites are struggling to keep up with the sudden explosion in demand. UK-based platform Farmdrop, a service that delivers food from farmers to Brits’ doorsteps, has had to limit its drop-off days. When I checked the site earlier today, I saw a note that they are “at capacity and unable to take any further orders for the current days available,” but would be opening new slots soon. In the U.S., local farmed food delivery service Hungry Harvest has also had to pause new signups due to an increase in orders.

That’s an encouraging sign that people want to support local farmers and buy their goods. It also shows that we need more services connecting consumers to farmers and facilitating purchases and delivery. And soon.

Small farmers are already struggling to survive for a myriad of reasons — if we don’t find ways to sell their produce, or give them a significant bailout, we could be looking at a future with significantly fewer farmers markets and locally-grown food. And that’s not a future I want to eat in.

Amazon’s Grocery Stores Are Headed for NYC, Will the Pandemic Change Any Building Plans?

If there’s any hope to be found nowadays, it could be that at least Amazon is carrying on like business will get back to normal at some point. Grocery Dive reports that Amazon is taking over the leases of two New York City stores that belonged to the now bankrupt Fairway Market chain.

Amazon paid a reported $1.5 million at auction for the stores, which are located in Paramus and Woodland Park. Amazon recently opened up a cashierless Go Grocery store in its hometown of Seattle, and was supposed to open up the first of its full-on supermarkets in Woodland Hills, CA this month but, you know, that probably getting pushed out, given the state of the world. Grocery Dive says Amazon is also interested in opening up grocery stores in Chicago, San Francisco and Philadelphia.

While there is some comfort in the fact that Amazon is forging ahead, one has to wonder if Amazon is altering any of its building plans because of the COVID-19 outbreak. Amazon has said its Woodland Hills location won’t have cashierless checkout, but as grocery retailers limit hours, put cashiers behind plexiglass shields and take other measures to reduce human contact, will Amazon reconsider? No cashiers is one less person on the frontlines of any future outbreak.

Additionally, we also know that the Woodside location will have some form of automated robot fulfillment. The question now is whether the surge in online grocery shopping occuring now, as people shelter in place, will continue after the outbreak recedes. Will Amazon, which already loves robots, build more of its future stores around e-commerce fulfillment automation into its future locations?

The question of how things will change for good once life gets back to normal is one we’re asking about a lot of our previous behaviors. But with Amazon just now building out grocery market locations from the ground up, it has the opportunity to capitalize on any new norms.

Report: Sales From Third-Party Delivery Apps Are Slowing. Might It Be Those Fees?

Despite dining rooms being closed and delivery being one of the few sales channels on which restaurants can rely, the numbers are down as far as third-party platforms like Grubhub and DoorDash are concerned. Data from Earnest Research shows that these platforms are “declining in growth,” according to an article today on Nation’s Restaurant News.

Earnest Research analyzes credit and debit card purchases. Its findings, which end with numbers from March 18, show that instead of ordering more restaurant delivery, consumers are instead spending their money on grocery store purchases.

From NRN:

Earnest Research recorded national restaurant spend down 17% year-over-year for the week ending March 18, specifically driven by declines in QSR (-12% YoY), fast-casual (-24% YoY), and casual dining (-34% YoY). Spend with delivery aggregators (how Earnest defines third-party marketplaces and delivery app services) decelerated to +11% YoY from mid-twenty percent growth year-to-date.

Brick-and-mortar grocery stores, on the other hand, saw a 79 percent year-over-year growth, while online grocery orders were up 66 percent year over year. “This suggests a shift in shopper behavior as customers are trying online grocery for the first time, increasing their frequency, or both,” the report notes.

You can hardly blame consumers for wanting to spend their money on grocery items that can stretch across multiple meals. I, too, had a recent experience that really underscored how expensive restaurant food delivery actually is. Over the weekend, I ordered a $20 pizza from a local place here in Nashville. The shop only delivers through Postmates, and between delivery fees, service fees, and a tip, I dropped about $38 for that pizza. (Part of that did go towards a larger-than-normal tip.) Fast-forward to yesterday when I swooped into a grocery store to pick up enough for a few meals plus a week’s worth’ of oat milk. The goods cost about $30 total.

Many more are probably making similar comparisons right now. More than 3 million people filed for unemployment benefits in the last week, and that number could rise. Federal Reserve Chairman Jerome Powell said today that we “may well be in a recession” and that economic activity will substantially decline from April to June.

All of which is to say, this isn’t exactly the climate in which to regularly cough up $10-plus in fees on delivery orders, which makes it not all that surprising that numbers are down for delivery platforms. 

It’s a bummer, to be sure. In an ideal world, everyone would have the funds to support local restaurants and regularly purchase delivery and takeout meals from them while COVID-19 has us all on lockdown. It’s unrealistic to expect the majority of Americans to do this, though.

Some restaurant chains have gotten hip to the issue of high delivery fees. Subway, McDonald’s, Del Taco, Chipotle, KFC, Taco Bell, and others have all announced free delivery promotions through some of their third-party partners. Still, even with waived fees, for most of us, our money goes a lot farther when we’re spending it at Publix.

Another week or two of lockdown should tell us if such deals are enough to reverse the declining numbers for third-party delivery platforms. With no seeming end in sight to either the pandemic or the economic roller coaster we’re currently on, more people willing to spend their bucks on delivery is far from guaranteed.

Zippin Waives Setup Fees for Stores that Want Cashierless Checkout Pop-Ups to Sell Essential and Safety Products

Next time I go to that grocery store, my cashier will be scanning my groceries from behind a plexiglass shield, yet another measure to prevent the spread of the coronavirus to grocery workers on the front line of this pandemic.

The enormity of the COVID-19 crisis makes me think that cashierless checkout would be really nice to have at a time like this. Shoppers could walk in, grab what they want and go, getting charged automatically upon exit. No interaction with cashiers or baggers, or standing in line with other people.

So I reached out to Krishna Motukuri, Co-Founder of Zippin, to see if there’s been increased interest in his company’s cashierless checkout technology. He said that there has been, particularly in the company’s Zippin Cube, which is a modular pop-up that allows the creation of a cashierless pop-up retail store-within-a-store. In an email to me, Motokuri wrote:

With a Zippin Cube (popup) at the front of the store (or a dedicated aisle converted into a Zippin section) stocking the top-selling products, stores can ease some pressure on their cashiers. Shoppers who need just some cleaning supplies or a cough syrup can walk into the Zippin section, grab those items and leave, without adding to the congestion in the main store.

I mean, it’s his company, so of course he thinks Zippin is a great solution for retailers right now. But the scenario that he describes actually makes a lot of sense. Sick people still have to shop (even in non-COVID-19 times), so they bundle up and head out to the grocery store, wandering the aisles, looking for things like medicine and Gatorade. Then they get in the same checkout lines as the healthy people.

Instead, as Motukuri suggests, grocery or drug stores could build a pop-up near their entrances filled with the items sick people buy. That way, these people, along with those caring for (and thereby in contact with) sick people, can quickly shop in a separate area, limiting contact with store workers and other customers.

This of course, can feel a bit ethically sticky. Prior to the pandemic, the big discussion around cashierless checkout was the removal of another human job. Now that doesn’t seem like such a bad idea. But this vision of a store-within-a-store for sick people does admittedly conjure images of a second-class area for sick people to be shoved into. That’s to say nothing of the unbanked and underbanked not even being able to use cashierless checkout options.

I don’t have a clean answer to that problem. Life was complicated enough even before we implemented a six-foot personal space bubble around us. But these are the questions any retailer setting up cashierless checkout will have to grapple with.

But for those retailers interested in setting up their own cashierless Zippin Cube, Motukuri says his company is waiving all setup fees to stores selling household essentials or health and safety products.

Experiential Retailer b8ta Furloughs Workforce, Cuts Corporate Staff Due to Coronavirus

With the exception of grocery, the COVID-19 crisis has hit every retail sector hard as consumers cut back and, in many cases, are forced to stay in due to mandatory shelter-in-place orders.

One of the early casualties of the tsunami is b8ta. The experiential retailer announced this week it would furlough its entire retail workforce and cut its corporate staff in an attempt to weather the storm brought on by coronavirus. The moves, announced in a letter to employees by company CEO Vibhu Norby, were effective last Friday.

In his letter, Norby said furloughed store employees would get paid through March 28 and receive a $1,000 relief checks (part-time employees get $500). Norby also said those corporate employees not laid off would get mandatory pay cuts.

The company’s business consists of both its own flagship retail stores (approximately 25 at the end of 2019) as well as its “retail-as-a-service” platform that powers experiential retail experiences for other retailers such as Macy’s (an investor) and the relaunched Toys R Us.

I’ve always been intrigued by b8ta’s take on retail, which utilizes a model that essentially rents space to product companies (similar to a consignment model) and provides brands granular data about retail customer interactions with their products. Products are often kitchen or food related, such as the Aveine wine aerator or the Hurom slow juicer, and companies such as Thermomix have sometimes used b8ta storefronts as a way to showcase product features and get user feedback.

Norby indicated that b8ta hopes to reopen stores in coming months and welcome back retail employees. The company raised $50 million in funding late last year, so it would appear they have enough of a war chest to weather the coronavirus storm. It’s kinda of a bummer they couldn’t use some of that cash to continue paying its employees past March 28, but it appears the company’s focus is on ensuring its long-term survival by slowing its burn rate through the crisis.

Beyond payroll, the company no doubt has to continue rent payments in upscale retail locations in places such as New York City, San Francisco and Seattle. As well, many of the products sold at b8ta’s own stores are higher-priced, discretionary products, so the company is likely forecasting decreased demand well into 2021 as most consumers deal with financial uncertainty due to the economic fallout from COVID-19.

In a piece of related news, company President and cofounder Phillip Raub announced he would step away from a full-time role at b8ta. He hinted that he has something new he is working on and would share details soon.