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Working From Home is Adding to Some Restaurants’ Struggles

by Jennifer Marston
June 9, 2020June 9, 2020Filed under:
  • Business of Food
  • Coronavirus
  • Delivery & Commerce
  • Featured
  • Restaurant Tech
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The uptick in telecommuting could be contributing to a decline in foot traffic for some restaurants as the industry slowly enterers a recovery phase. Jack Li, founder of research firm Datassential, said at NRN’s recent Restaurants Rise conference that the effectiveness of remote work for many companies could lead to a dramatic shift in foot traffic for restaurants located in commercial areas. Think lower traffic volume at lunchtimes and some sales at breakfast.

“If you pull consumers out of an area because they’re not going to offices to work, you make it very challenging for restaurants,” he said.  “That will have a very large impact on what recovery looks like,” Li said.

He also cited some telling restaurant industry stats during the talk. Right now, 11.5 percent of U.S. restaurants are not open. Of those, 3.3 percent are permanently closed and 8.2 percent are temporarily closed. Li said some of those temporary closures could turn into permanent closures.

While those figures aren’t completely the result of more folks working from home, telecommuting has at least some impact. As NRN noted: “This will be especially harmful to restaurants where office workers outpace residents. And, it also explains the high rate of temporary closures in urban areas where restaurants rely on office or commuter traffic.”

One thing that could help is the rise of a new kind of corporate catering. Today, Uber Eats announced Vouchers, an extension of its corporate meal program that lets companies customize meal plans for both individual workers and large-scale events. Those meal plans rely on restaurants to provide the food.

For some businesses, that could add incremental revenue at a time when dining rooms are open at reduced capacity. But that depends on where the restaurant is located. Those in more residential areas stand to benefit from the mass telecommuting happening now. For those in financial districts or areas where office workers outpace residents, closures may remain longer and recovery will come slower. 


Related

Datassential: 10% of U.S. Restaurants Have Closed Permanently

A total of 10.2 percent of all U.S. restaurants have permanently closed since the start of the pandemic, according to new research from food industry intelligence firm Datassential. The report finds that of the 778,807 restaurants of all types in the U.S. that were open at the start of the…

Week in Restaurants: How Restaurants Are Responding to Coronavirus

Restaurants large and small face a major sales slump due to declining foot traffic and mandates from city governments to reduce capacity in the dining room. Meanwhile, larger chains are under pressure to provide more paid sick leave to their workers, and based on the number of businesses now focusing…

NPD Group: Restaurant Customer Transactions Are Down 42 Percent

Restaurant customer transactions dropped 42 percent during the week ending in March 29 compared to the same time period one year ago, according to new numbers from The NPD Group.  While dismal, to say the least, those numbers aren’t surprising. With most states now mandating restaurants keep dining rooms closed…

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  • restaurant tech
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