Prediction: Consumer Preferences Will Shift Following the Coronavirus Pandemic
Online grocery shopping has increased by 450% since last March, and food sales have increased by 24% in the past five years.
Now with the current coronavirus pandemic & government mandates being put into place that limit dine-in options (or even prohibit them in cities like Nashville), we are seeing nearly every restaurant adjust their systems in order to offer some sort of delivery option in an attempt to combat the loss of revenue they are experiencing.
Delivery Services Continue to Rise
Uber Eats, Grub Hub, Postmates, etc. have been steadily expanding their services across America, so much so that restaurants that have traditionally offered delivery are now outsourcing their deliveries to these third-party businesses.
Along with restaurant delivery, many folks, including a new wave of elderly patrons, are now also heavily leaning on the convenience (and safety) of having their groceries delivered to their doorsteps during this time. But what happens when things settle down and start shifting back to normal?
Commissary Kitchens Become The Norm
In cities like San Francisco, restaurants are starting to open up commissary kitchens that exclusively service online delivery orders.
Postmates teamed up with an LA noodle house, Tatsu Ramen, to test out this concept and have reported it to be wildly successful. With each online order, data on restaurant popularity is collected automatically and allows delivery services to be less of a middleman and more of a business planner. Low overhead coupled with hands-off logistics makes this an easy “yes” for restaurants.
Other models, like one offered by DoorDash in San Jose, calculated their rent by using a capped percentage of gross sales, so that their tenant took on less risk in their venture. Due to restaurants having a historically high failure rate, this model is very attractive to restaurateurs looking to expand their operations throughout different areas to test their consumer base.
As success continues in current test markets, it is likely that the US will see commissary kitchens continue to evolve and expand into other major cities. It is possible that a local restaurant group or an entrepreneur could jump ahead of this trend and open up one of these commissary kitchens with their own in-house delivery service.
Check out our blog post on How to Open a Restaurant in Nashville
Never Let A Good Crisis Go To Waste
With third-party doorstep food & grocery delivery being offered right now for a $0 fee, people are essentially receiving a free trial run for these services and can continue enjoying & supporting their favorite local restaurants with virtually no “skin in the game.”
It is not uncommon for web-based apps to offer free trials to attract new customers, and whether it is unintentional or not, third-party delivery services should see an influx in its customer base following the current social-distancing procedures.
Amazon has become a retail giant in recent years because people have gotten so used to the convenience of having their shopping items delivered to their doorstep.
Many people haven’t called a cab in years because of the convenience of Uber.
Watching the growing popularity of these other web-based trends, it is hard to imagine that people would experience such convenience to later then decide that they aren’t willing to shell out a $3.50 delivery fee in exchange for not having to leave the house.
Senior citizens who did not follow tech trends are now learning how to utilize their smartphones and join in the new age of technological convenience. Going to the store to buy groceries can oftentimes be a taxing activity for some elderly citizens, and after they have passed the technology barrier, it is possible that we’ll see many of them add this convenience to their weekly routines.
Outlook For Commissary Kitchens Is Positive
Although there are many unknowns in the future regarding the current global pandemic, humans are naturally wired with resilience and will overcome and adapt as we move forward through the year.
Social distancing will be a thing of the past, but the experiences we have during this time will no doubt influence our habits in the future including washing your hands on a more frequent basis or taking advantage of the convenience of online food delivery.
For now, our local restaurants are just looking to keep their heads above water during this crisis, but their businesses will be shaped by this experience as well.
Grand Central Market, East Nashville
Nashville has been establishing itself as a foodie hub with a plethora of fantastic restaurants and cuisines unique to Nashville, and our food scene continues evolve with developments like Hunter’s Station and the recently announced Grand Central Market, so it is not a far stretch to believe that after this is all over, we could see a commissary kitchen open here in the near future.
Interested in jumping ahead of the trend and opening up a commissary kitchen in Nashville? The Cauble Group would love to sit down with you and share some of our thoughts and ideas on how this model could be very successful in Nashville. Please contact Sam Turner if you would like to hear more about this idea or to share your predictions of how this season will affect the food industry moving forward.