COVID-19 presented a constant torrent of dilemmas for restaurants, and it sparked a variety of profit-saving strategies in response. Creating a leaner menu to drive lower operational costs was one of them.
McDonald’s did it. As did Taco Bell. And even as the industry moved away from the pandemic’s initial blow, plenty of operators continued running smaller menus. The reasons were numerous: traffic remains challenged; restaurants are struggling to access prior distribution models; and the labor shortage hasn’t made preparation or execution any easier in the kitchen. It takes more time and oversight to train new employees, especially with larger menus.
Additionally, in the COVID era, consumers appear less concerned about a vast range of offerings and more focused on convenience, says Tom Cook, a co-principal at consultancy King-Casey.
“They've actually relaxed the expectations in many respects with these [quick-service] and fast-casual restaurants because they know that COVID has impacted them and so they're more willing to accept and recognize that certain items aren't available,” Cook says.
Should menu cuts have been on the agenda anyway for restaurant chains, pandemic notwithstanding? Gary Stibel, founder and CEO of the New England Consulting Group, believes so.
“The restaurant industry has an infectious disease, which is known as menu proliferation,” he says.
Stibel says brands can benefit from reducing 10–15 percent of menu offerings with only minimal damage to consumer sentiment. The only person who will notice, Stibel says, is the CFO when they see an uptick in profits.
He adds there is an optimal point of variety, but too much choice is bad for the restaurant and the guest, because of decision paralysis.
COVID, for its countless negatives, did provide an opportunity to simplify operations and improve profitability, Stibel says. Even still, he predicts restaurants will return to previous habits of larger, more complex menus when supply chain and COVID issues resolve. But he’s not sure they should.
“Our philosophy is ‘put your menu on a diet,’” Stibel says. “Many diets are healthy for restaurants the way human diets are healthy for humans. Put your menu on a diet. Simplify operations in your kitchen. Simplify choice for your guests, and eliminate a lot of the waste that is created by an overly complex menu.”
Stibel’s view is the vast majority of consumers haven’t even noticed menu reductions of late. The ones who do are typically disappointed, but understand the climate. There’s only a small minority who will actually choose to go somewhere else. Yet is that a delicate balance?
Hartman Retainer Services Vice President Melissa Abbott observed consumer behaviors throughout the pandemic. She says while, initially, consumers experienced disappointment when their local and chain restaurants cut down some favorites, they kept the larger issues in mind.
After all, restaurants were rushing to provide menu items that traveled well. But now, diners are looking for something in a restaurant’s menu offerings that go beyond the day-to-day, Abbott says. And over time, they are becoming less lenient and more frustrated as cuts continue, she adds.
Some consumers want items from full menus that remind them of when life was more normal.
“That's what food does for us as humans,” Abbott says. “So there is much less understanding across the board. Customers are feeling like, ‘why doesn't the foodservice operator have it together at this point?’”
There might be strategies to strike a balance between menu cuts and the efficiency gains that follow, and satisfying customers with a range of options they can’t get elsewhere or make at home.
Perception of choice is key, Abbott says. That could mean cross fertilizing ingredients from one section of the menu to another, yet making it look like different options—something Taco Bell has long been a master of.
“We're seeing more simplification in terms of things like bowls and sandwiches,” Abbott says. “But with that, though, there's that level of expectation that there has to be something about that dish that is elevated to some extent.”
Cook says menu optimization is going to remain key in light of operating dynamics.
“If anything, they're getting worse,” he says of supply and labor challenges, “so I would be recommending to our clients to try and go with a simplified menu. There's a way to strike a balance with that if you think of it on a continuum.”
One silver lining of the pandemic is that consumers have become more adept at using technology to access food. Alongside that, channels to engage with customers are getting stronger. Abbott says being able to listen to guests through social media is a way to enhance the relationship, and restaurants are exploring how to make that process less transactional and more personal. This can help dictate menu changes, too.
“If you're going to have fewer items on your menu, there has to be something within that each offering that is going to really reflect this idea of premium convenience to the consumer,” Abbott says, adding that may be a global flavor inclusion in a format that’s familiar or something else. “Get variations and texture to really appease that consumer who's looking for that sense of discovery.”
Consumer demands concerning menu items may reflect the shift illuminated by the 2021 QSR magazine Drive-Thru Study. Speed of service is no longer the tell-all value to display consumer satisfaction in drive-thru—convenience is. This is true about menus as well, Cook says. It comes down to the fact that consumers are willing to deal with less offerings as long as the convenience element is there.
“I think that many of these behaviors that have really changed are going to be lasting over time,” Cook says. “This might be one of them, the acceptance of these more cut back menus just because convenience is so important now.”