QSR: Quick Serve Restaurants: Surviving the Pandemic

The restaurant industry continues to feel the negative impacts of COVID-19. Each week we hear of a local spot closing while another struggles to stay open. Amid the headlines of restaurant closures, we’ve also seen restaurants take advantage of the opportunity presented and adapt to the new normal.

Never let a crisis go to waste

In the words of Rahm Emanuel, “You never let a serious crisis go to waste.” With the unwelcomed arrival of the Corona Virus, businesses have been provided an opportunity to make radical changes and speed up the timeline for strategic initiatives by compressing five-year plans into the present.

The restaurant industry, specifically QSRs are reinventing themselves overnight. How are they accomplishing this? They are getting serious about change in a changing world.

Don’t forget the basics

Restaurant owners that have proven to be successful during the current environment have stayed focused on key principles and adapted their business plan accordingly.

  • Target Market: Attempting to be all things to all people is a strategy designed to fail. Define your customer market and design your offering to them.
  • Simplify the Menu: Remember the 80/20 Rule, focus on the 20% of the menu that drives 80% of the sales. Expanding the menu may bring in the marginal customer, but at what cost?
  • Delivery: Drive-thru and curb side pick-up have become the most cost-effective channel to deliver food for the QSR space. With a simplified menu, the drive-thru can reduce wait times and by extension increase sales and customer satisfaction.
  • Technology: Innovation is occurring through the adoption of technology exponentially. A mobile app can provide convenience, build customer loyalty and eliminate barriers to sale, ordering becomes a habit not a decision. The investment in technology remains critical, especially now.

Leading through example

McDonald’s: Less is More

You can step off a plane almost anywhere in the world and have lunch at McDonald’s. Their success over their 80-year history speaks for itself.

The original McDonald’s had a menu limited to hamburgers, cheeseburgers, milk shakes, fries, and drinks. The order was placed at the walk-up window, the product was delivered quickly and was attractively priced.

With this simple concept McDonald’s grew to be one of the largest restaurant chains in the world. But as the chain grew, the simplicity that was responsible for its early success began to evolve as the company attempted to grow market share by appealing to a broader customer base.

The menu board grew to include chicken, fish, salads, all-day breakfast, and more. While many of these innovations have allowed McDonald’s to remain a competitive market leader, it has come at a cost.

However, with the advent of the virus, McDonald’s moved quickly to limit the menu. One simple step, simplified the kitchen, streamlined staffing, and reduced drive thru times.

Under normal conditions this would have been almost impossible to implement given the size of the company, but in this economic climate, companies are being given a pass to institute broad changes without the usual pushback. McDonald’s moved quickly to adjust, and the real value may be in embracing a more streamlined menu after the pandemic and with it, all the related benefits for the future.

Starbucks: Technology & Innovation

From its beginnings as a single coffee shop at the Pike Place Market in Seattle, Washington, Starbucks has grown to 31,000 stores globally. Over the past several years, we’ve seen Starbucks become an industry leader with its mobile app and on the go ordering.

According to Starbucks, pre COVID 80% of their transactions were considered on the go – a combination of drive thru and mobile ordering with 22% of their sales occurring through their app. However, when COVID shutdown dine-in areas, Starbucks took this as a cue to accelerate their reliance on mobile ordering and increase the percentage of stores with a drive thru.

Starbucks in now establishing curbside pick-up for suburban markets and rolling out prototype stores in Toronto and New York that only offer mobile ordering for pick-up.

The advantage of the new concept is clearly recognized. Smaller footprint, minimalist design, reduced staffing, with a coffee station tucked behind the pick-up counter. Particularly in urban markets with strong foot traffic and expensive real estate, this could be a game changer for the company if customers embrace the concept.

The key is that Starbucks saw an opportunity to take advantage of a crisis to position the brand for the future to survive the present.

“In the middle of every difficulty lies opportunity” – Albert Einstein

McDonald’s and Starbucks are well established brands with a global footprint, strong balance sheets, and seasoned management that can navigate this difficult environment. They each share some advantages over smaller chains with their investments in technology and the ability to serve many of their customers with drive thru service. But their real edge is the ability to embrace change, pivot when needed, and remember their past as they pioneer forward.

As business owners navigate these unchartered territories, they can look to McDonald’s and Starbucks for guidance on how to survive the current environment and capitalize on it.

About the Author

Brad L.J. Griswold Headshot

Brad Griswold is the Managing Partner of Corbenic Partners, a wealth management firm based in Bethlehem, PA. Founding the firm over 30 years ago, he has spent the majority of his career working with and advising Franchisee Owner/Operators.

*Opinion piece, please see important disclosure