The COVID-19 pandemic has wreaked havoc on the Oregon restaurant industry. To support our restaurant community, we launched a joint research project with the University of Oregon and Oregon Restaurant and Lodging Association (ORLA) to understand the key issues and challenges Oregon restaurants were facing during the past year.
We received responses from 309 restaurant owners/operators who on average have about 27 years of experience working in this industry. The restaurants they represent are mostly casual dining style (51%), followed by family dining style (14%). The majority of the restaurants offer American cuisine (76%). At the time of the data collection, 36% of these restaurants did not have outdoor seating. Here are our key findings: Major challenges that restaurants are facing
Most important changes that restaurants are making
So what’s next? We believe the following changes will help restaurants cope with this pandemic: 1. Revamp your menu The days of traditional menu design are coming to an end. Consider downsizing your menu to focus on best-selling items if needed, updating your menu frequently, and offering non-traditional items such as meal kits. Less is more. “We believe that menu size can signal the competence and expertise of a restaurant and therefore affect customers’ perception on the quality of the food.”, says Dr. Hong Yuan, director of Business Research Institute and Robert P. Booth Associate Professor of Marketing and Research Scholar at the University of Oregon, who is currently working on a project to explore whether downsizing the menu could have a positive impact on the quality and competence perceptions of the consumers and consequently the revenue of the restaurant. Preliminary findings from revenue data collected suggest that restaurants that focused more on their core competence had performed better than those who didn’t. Downsizing your menu, especially during a pandemic or recession, can be an effective strategy to respond quickly to uncertain demands and streamline your supply chain and operations. Updating your menu frequently based on the availability and freshness of your ingredients can be a recipe for success. Since many restaurants are now using digital menus due to COVID-related regulations, this strategy will help you manage customer demand more effectively without having to incur the cost of printing. Finally, we suggest that restaurants offer do-it-yourself meal kits to bring signature dishes to the kitchen of those customers who aren't comfortable dining-in yet. This could open up a new market segment which has been served by the subscription-based meal delivery services. 2. Streamline your operations Have an internal performance evaluation to identify areas for improvement such as ordering process, staffing schedules and delivery options. Online ordering is here to stay. To sustain and grow profit, it is critical to have a sustainable solution for delivery, e.g. enhancing in-house delivery capability or adopting a hyperlocal delivery model, as well as ensuring that customers are informed every step of the way from the moment they place an order to the time of delivery. 3. Jumpstart your digital marketing Although digital marketing is the most used marketing and advertising method (followed by print and ratio) by the restaurants in our survey, there were a lot of restaurants who did not yet have an online presence. Boost your online presence not only by building a website and a Facebook page, but also consider other digital marketing tools. Many restaurateurs are not aware of other cost-effective ways to market their restaurants on the Internet. If you have any thoughts or comments, we would love to hear from you! You can also schedule a free consultation here to tell us any specific challenges that we may be able to help you.
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