Capitalize On Pent Up Demand

Will customers come back to restaurants when political and health leaders allow operators to reopen? A recent trip across the country has answered that question with an emphatic “YES”. Our consensus is much more optimistic than a few weeks ago because of higher vaccination rates, a consistent federal government message on how the virus is transmitted and how important personal protection is, and lastly the government stimulus $$ being widely distributed amongst pizza consuming demographic.

Against this positive note are the simple facts that some of the government stimulus is actually hurting the supply potential. Anecdotal information from large protein and dairy suppliers tells us that they still lack essential workers and that many are 20-40% below pre-pandemic production levels. Shortages are a combination of raw material and labor shortages. Prices are increasing in virtually every category; grains, poultry, beef, dairy, and made worse by new shortages in PC’s and disposables. Imported product lead times and costs of logistics/trucking are ridiculous by pre-pandemic standards. Keeping our distributors supplied has become a full time and thankless job as shortages abound.

The silver lining is “demand” driven by consumers flocking back to eating out and social occasions. Supporting the likelihood of building demand and a strengthening economy is the Covid stimulus bill and expectations of the final bill coming close to the $2 trillion proposed. The food service industry is showing more signs of life, together with the travel industry being responsible for a majority of strong jobs reports.

The challenges of last year were met by our industry with many innovative ways to serve customers in a safe and responsible manner. Many operators used the challenge to reinvent their menu and service offering. From a menu perspective, focusing on a simpler menu and items you can make $$ on. To raise visibility, clever operators found ways to raise their profile using Facebook, outdoor signage, revamping their website, posting electronic versions of menu and specials, and developing a blast list of customer emails. During this pandemic it has become ever more evident that the independent pizzeria/restaurant’s success depends on local traffic. Finding new ways to reach your local customer base is important!

While we wish that the Covid issues would soon go away, it is apparent that a transition back to behavior prior to February 2020 will be a multiyear process. No matter your platform or progress raising your social media profile and customer outreach, we encourage you to continue along the path of transforming your business. These efforts are consistent with reaching the best target demographic, not to mention that the younger age group is also more likely to put aside Covid concerns. Consider too that the older generation has had to begin using email, internet menus and ordering platforms, so the local target audience for electronic media has expanded.

Updating your website and keeping current menu options and prices needs to be made a priority. Ingredient costs continue to rise and a new report shows that the labor shortage is as bad in restaurants as it is in food plants. Smart operators will have to adjust prices to reflect what is likely to be a new higher cost reality. Expect higher costs of grain for oils, feed and flour, strong export demand for grain, poultry, and pork in particular, and rising ASF among hog producing regions especially Asia.

Pent-up demand also means that potential customers will be looking for restaurants to re-open and see what the new safety protocols will be. That means another opportunity to embellish your front signage whether in the window, overhead, and sidewalk displays. It also opens further opportunity for concepts to add social components to their dining experience. Many restaurants have closed or changed service, so it is doubly important to be as visible as possible in both web and venue-based signage.

As our industry rebounds, please re-double your efforts to take advantage of the pent-up demand and grow your return customer base. Good Luck!

 

 

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