Coronavirus is coming for the food industry. It all started when brands like KFC, Hershey and Coors pulled television ads to avoid virus insensitivities. The issue worsened when Los Angeles, New York City and Washington officials ordered closures of restaurants and bars, with over a dozen states following suit. In response, big and small eateries alike have had to rearrange stores to prevent the spread of infection or shut their doors completely, including Denny’s, Starbucks and Chick-fil-A.
According to data OpenTable released on year-over-year seated diners at restaurants, patronage on March 14 decreased in New York City and Boston by 64 percent, 58 percent in San Francisco and Seattle and 47 percent in Los Angeles, compared with the same night last year.
The economic toll of the closures has already been high as companies are being forced to cancel or postpone some marketing campaigns altogether. With in-person dining off limits, brands are relying on take-out and delivery orders to stay afloat.
Denny’s said it’s keeping many of its restaurants open but reducing the number of patrons in the dining room.
“In keeping with this priority, we have waived all delivery fees to promote remaining at home and social distancing. We are confident that together, we will overcome the challenges posed by this virus,” Denny’s tells us.
Delivery fees for Denny’s orders made online are waived from now until April 12. Denny’s is also eliminating all condiments, silverware and placements from each table, cleaning high-touch areas every 30 minutes and requiring employees to wash their hands every 20 minutes.
This week Starbucks said it would be moving to a “to go” model in all company-owned stores in the US and Canada for a minimum of two weeks. The company post said it will pause the use of all seating in both the café and patio areas, but that customers can still walk up and order at the counter, through the Starbucks app or via drive-thru and delivery.
In a letter published the week prior, Starbucks CEO Kevin Johnson spoke about encouraging signs in China, where over 90 percent of Starbucks stores have reopened.
Panera said it may limit its service to pick-up, delivery or drive-thru only while also implementing contactless delivery but has’t said it would officially be closing. It also says it’ll be adding hand sanitizer stands and antimicrobial covers for its fast lane kiosks.
As coronavirus wreaks havoc on food businesses, restaurant stocks are crashing. On Monday, the S&P Restaurant Index fell more than 15 percent, with every restaurant company stock down by double digits. Denny’s fell 24 percent, Red Robin declined 35 percent and Del Taco dipped by 34 percent.
But there’s a silver lining to the restaurant closures: brands have the opportunity to put public health ahead of profits and help their community through acts of altruism. For example, Yum Brands, parent company of KFC, Taco Bell and Pizza Hut, plans to pay employees of stores that get closed due to coronavirus. Yum Brands will pay employees their regular hours during closure or quarantine.
Darden Restaurants, Olive Garden’s parent company, too said it would give all hourly employees paid sick leave. Starbucks implemented “catastrophe pay” to US baristas who come into contact with or have been diagnosed with the virus.
DoorDash, Instacart and Postmates have also announced ways to help its workers. DoorDash and Instacart are offering two week paid sick leave to infected workers while Postmates launched a “fleet relief fund” to help cover the cost of its couriers’ medical check-ups.
Many diners have turned to online grocery delivery services, with Instacart, Amazon Fresh and Shipt all seeing higher demand. Instacart says bulk buying has grown and reported a 40 percent increase in orders from customers sending items to someone else.