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The Effects of COVID on QSR

We recently conducted research on the Quick Service Restaurant industry, speaking with more than 100 individuals in 5 States and Territories. We found that COVID-19 has been both cruel and kind to the QSR industry, with some labelling it a blessing in disguise and some struggling to adapt to this new way of business.

A major contributing factor to whether a company thrived or died during the COVID lockdowns was their location. The stores located in shopping malls or busy CBD districts struggled significantly with generating business. This is due to an increase of people working from home and less people ‘ducking out’ of the office for lunch. Some of these stores are still working to recover these losses and some have had to close down. The locations that thrived during this time were those in or near suburban areas and regional centres as more people were working from home. In this way, the QSR industry was better protected against COVID than in-store dining and bars.

Quick service restaurants had to adapt to the growth of home delivery, without accepting this as a new way of business restaurants would struggle to keep business levels high. The stores that were already catering to home delivery were at an advantage, especially if they already had contactless-delivery methods and drive-through. One interviewee mentioned that pick-up and delivery used to account for 20% of his business, and now it is sitting around 80%. Some companies even took this further and have changed to ‘delivery only’ kitchens, eliminating dine-in altogether.

Another big adaptation that these restaurants had to make was in regards to hygiene and safe customer service. To stay open and keep business alive, companies had to adjust quickly to the introduction of COVID-safe practices. This was not only for customer’s sake, but also to meet government expectations and avoid fines. Stores need to demonstrate how they are COVID-safe and offer customers choice in how to access the product, whether it be drive-throughs, contactless delivery or pick-up options. Businesses also found that customers wanted speed of service and increased hygiene and free sanitation – this was basically a non-negotiable if the business wanted to attract customers and customer-loyalty.

Can you think of any ways COVID has affected the way that you engage with Quick Service Restaurants? As an international team, we sometimes have Zoom lunches that involve team members ordering their lunch for delivery – we definitely appreciate the businesses that have adapted to home delivery!

In our research we found 6 Key QSR trends and have included the details of each in a research report. You can download a free copy of our report Key Challenges and Trends in Quick Service Restaurants here.

We’d love to hear your thoughts, and if you’re working in this industry contact PentaQuest we’d love to share some more of our findings and insights.

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