Last week England began its second national lockdown and this time food-to-go operators’ responses are very different to the first lockdown in March.
Staying open for business
During the first lockdown all the major food-to-go operators closed their doors to protect staff and customers, despite government guidelines permitting takeaway and delivery. Reopening started gradually around four weeks later as operators took time to get to grips with operating safely (and profitably) in a pandemic.
This time the vast majority including McDonalds, KFC, Pret, Costa, Greggs and Subway, have announced they will be staying open to serve customers via takeaway, delivery, click and collect and drive thru. This illustrates how far operators have come in establishing new ways of working that ensure safety whilst also being operationally effective and financially viable.
As Pret tweeted: ‘This lockdown, we’re not going anywhere. From Thursday, our shops will be open for takeaway & delivery of your freshly made morning pick-me-ups, WFH lunches, endless coffees and everything in between.’
There are exceptions, however, mainly amongst smaller independents and city centre-based operators most affected by the work from home guidance: London-based Pure has taken the decision to close all stores, 43 of Itsu’s 70 stores will close (some were just about to reopen), and Friska has had to reverse plans to to keep its 10 Bristol sites open as footfall was so low as to be unsustainable. Friska’s email to customers this week summed up the situation for many independent food-to-go operators: “On this basis, and given that it's safe to assume that the coffers have seen better days, we have made the decision to close for the rest of the lockdown period. We are all hoping for this to ease on the 2nd December but time will tell.”.
Battle of the apps
Proprietary apps are a great way for operators to gather customer data and deliver targeted communications and marketing campaigns to drive behaviour. With dine-in areas closed, the latest lockdown is an opportunity for brands to sign up more users by enticing them to use pre-order click and collect or delivery services.
McDonald’s is using some powerful marketing tactics to increase app usage. Last weekend the company streamed the “I’m Loving It Live” music festival which saw performances by major artists such as Jess Glyn, Stormzy and Craig David take place over three nights – exclusively available via the McDonald’s app. In the UK, the company followed this with a two-week 30% off sale across its entire menu, available to anyone ordering food through the app
Meanwhile KFC brought out the promotional big guns with 50% off their iconic 6 Piece Family Feast available for four days from 5-8 November, exclusively for mobile orders. Third party delivery apps are also getting in on the action with UberEats offering 15% of all Costa Coffee orders over £10 and Deliveroo offering 30% off for all new Leon customers.
Charity begins at home
Supporting NHS staff and other key workers with free meals was a major part of food-to-go operators’ response to the last lockdown. Leon has said it is in contact with the hospitals it previously served hot, healthy meals to as part of FeedNHS, to see if it can be of service again, however, so far there has not been a rush of similar announcements as operators prepare to weather a long winter of disruption to business. Of course, this could change if the healthcare systems faces the pressures seen last spring.
Burger King, on the other hand, took the unprecedented step of encouraging customers to order from rivals McDonalds and other competing restaurants. In the UK, Germany and France last week, Burger King demonstrated a sense of solidarity with the wider food industry by tweeting a statement asking consumers to support their local fast food outlets during the coronavirus pandemic, whether they are Burger King or not.
Optimism for a quick recovery takes a backward step
Stimulated by the government’s Eat Out to Help Out scheme and relaxed restrictions over the summer, operators were starting to see footfall pick up. Now, however, even food-to-go businesses such as Greggs that had previously been optimistic about their resilience to the harshest effects of the pandemic, are having to review forecasts and plans again.
In an update to employees, Greggs said while sales had recovered to circa 76% of last year during September, the latest restrictions are likely to see a reduction in demand across its store network. If sales fall to 50% during the month of November, profits could be impacted by circa £10m to £15m, according to leisure analysts Goodbody. It is likely we will see more redundancies, CVAs and business failures as already weakened operators cope with prolonged disruption .
But Christmas isn’t cancelled
Despite ranges being reduced to simplify back-of-house operations and the news of a second lockdown, the pandemic has not stopped operators releasing new and innovative Christmas products.
- Last week Costa launched a festive hot drinks range in partnership with Quality Street, and for the first time have made the festive seasonal drinks available through their 9.000 Costa Express machines so customers “can savour the season with us this year, in a way that makes you feel safe”.
- This year Caffe Nero have adapted to target the at-home market by launching a mince pie family box option to take home and gift sets, starting with the £20 Discovery Box which contains Nespresso compatible capsules and ground coffee.
- Pret launched its first festive hot food range. Its Pigs in Blankets Hot Roll has bacon wrapped mini sausages inside a soft white bap and is also available without the bread in a mini pot. Shoppers tell us they want more hot food-to-go options – read more here (subscription required)
- KFC's Christmas special is a Gravy Box Burger Meal with a chicken fillet burger that includes a specially designed hash brown gravy boat to ensure everyone gets enough gravy on their festive dinner.
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