There is some evidence COVID-19 spending has normalized, at least as much as things can in this extraordinary environment. According to Revenue Management Solutions, quick-service performance entered its fifth consecutive week of stable traffic this past period. It’s trending negative 10–15 percent, year-over-year. Sales remain flat to 5 percent.

And you’re seeing daypart balance return, too. Breakfast sales rose nearly 20 percentage points from a low in early July. It’s up 20–25 percent, while traffic is negative at 5–10 percent. A back-to-school boost perhaps?

Even late-night witnessed a traffic lift of about 5 percentage points, with sales ranging negative 5–10 percent, year-over-year.

However, one coronavirus phenomenon that hasn’t let-up is uncertainty and divergence among segments (full-service traffic is down 30–35 percent). How restaurants have been impacted, what they need to reopen, and how they’ve innovated to survive has no playbook. And pandemic realities and lockdowns affect concepts differently, to put it lightly.

Coca-Cola shared an exclusive look with QSR at research it fielded late June to early July that represents one of the wider COVID-19 impact studies yet. It surveyed 418 restaurant operators and 1,500 consumers (who had visited a restaurant two-plus times per month pre-virus) to try and answer those same questions. Respondents covered fine dining, casual dining, fast casual, quick service, and bars.

Let’s begin with the after-shock. Only 45 percent of restaurant owners said they are confident they’ll remain in business for the next 12 months.

This compares to an August report from the James Beard Foundation, in collaboration with the Independent Restaurant Coalition, that noted 66 percent of independent bars and restaurants believed they would make it past October. In May, close to 75 percent of independents reported taking on new debt obligations north of $50,000. An alarming 12 percent tagged the number at $500,000 and above.

In Coca-Cola’s study, 46 percent of operators were somewhat confident they’d survive a year. Nine percent were not confident at all.

Arguably the biggest COVID-19 shock is being felt at the employee level. The National Restaurant Association said previously the industry was on track to lose $240 billion in revenue and 8 million employees in 2020. More than one in four workers who lost their jobs during the pandemic hailed from the restaurant industry—more than any other sector.

In recent data, another 1.19 million Americans filed for unemployment, making it 20 consecutive periods where more than a million people filed jobless claims. While it dropped after two straight weeks of rising (from 1.43 million), it remains massively above historic pre-virus levels. The peak came in March at above 6 million. To shed some light on how unique this truly is, the previous record was 695,000 in 1982.

Also, when you include Pandemic Unemployment Assistance, more than 32.1 million people are currently receiving some form of unemployment benefits.

According to the U.S. Bureau of Labor Statistics, the food and drink industry gained 134,000 jobs in August. In the past four months, restaurants added roughly 3.6 million jobs. However, it’s still 2.5 million bellow February levels. A little more than 10 million workers were on payroll in August. Overall, the U.S. tacked on 1.4 million jobs in August and the unemployment rate fell to 8.4 percent.

For restaurants, this has been a particularly dicey battle. Beyond Paycheck Protection Program concerns and confusion, the reality is foodservice is a low-wage, high-turnover business that found it difficult to compete with expanded unemployment benefits.

Past that, restaurants operating under limited capacity measures, either with pared-down dining room seats or no indoor service, or just letting off-premises do the heavy lifting, simply didn’t have the need for previous staffing levels. Whether they could afford it or not, the volume wasn’t there.

Coca-Cola found that 86 percent of restaurants made staff reductions due to COVID-19—a stark statistic.

Additionally, restaurant owners have invested an average of $7,400 to adapt to the “new normal,” things like PPE and enhanced protocols (training, cleaning, Plexiglas, etc.) That’s also coming into play as brands recall workers.

The labor pool might be looser, but it didn’t necessarily get cheaper. It’s why Outback parent Bloomin’ Brands decided to hold corporate employees and avoid furloughs, a bold decision intended to allow for a smoother restart when the time arrived. The company, which also directs Carrabba’s, Bonefish Grill, and Fleming’s, said rehiring and retraining would not only slow down reopenings—it would weigh on the bottom line.

Yet this wasn’t a luxury everybody could afford. Countless brands don’t appreciate the backing of a public market, and aren’t capitalized to hold their financial breath for several months. Or to pivot as quickly and effectively, without dipping into cash reserves, as some larger chains with solid infrastructure.

Tom Bene, CEO of the Association, said earlier the average restaurant only has about eight weeks of cash on hand. That makes standing up an online ordering system or curbside, and so forth, a significantly different task.

Case in point, 66 percent of owners told Coca-Cola it will take at least six months to recoup that $7,400 average expense. In a previous survey of nearly 4,000 operators, the Association discovered 75 percent of operators think it’s unlikely they’ll be profitable within the next six months (under the assumption there will be no additional relief packages from the federal government).

Owners in Coca-Cola’s data believe they need to reach 55 percent seating capacity in order to remain profitable. For independents, per James Beard, the number was 60 percent, on average. That group, however, was nearly universal in saying 50 percent was not enough to stave off mass closures.

Here are restaurant owners’ top concerns, in order, per Coca-Cola.

  • A second wave of infections (59 percent)


Something to consider on this note: Whether or not there is in fact a second wave of COVID-19, restaurants could find themselves grappling with a second wave of consumer anxiety. From schools to daycares to workplaces, people catching, and spreading, typical winter illnesses (think, flu season) are going to do so amid heightened concerns. Having a fever or cough isn’t what it used to be. And employers, including restaurants, are going to have to figure out how to handle the dilemma. Backup workers to replace those sent home. Frequent and available testing, and the added cost that might carry. Understanding family care issues if somebody’s child can’t go to school. And on it goes.

  • Supply chain reliability: 50 percent
  • Regaining lost customers: 50 percent
  • Weakness in local economy: 49 percent (welcome to a COVID-19-fueled version of the value wars. Even Outback is lowering prices).
  • Understanding consumers’ needs to feel safe: 48 percent
  • Keeping informed about rule changes: 48 percent
  • Understanding the rules to be in compliance: 48 percent
  • Understanding employees’ needs to feel safe: 47 percent
  • Recouping compliance costs: 46 percent
  • Being sued by a customer: 45 percent


As evident, there are no shortage of questions, and all of these are moving targets, especially for multi-unit chains.

So what do restaurants need to turn the pandemic tide? Coca-Cola found, given the financial burden placed upon owners and the time it will likely take to become profitable again, most restaurants would benefit greatly from financial relief in the form of reduced fees, tax credit, or recovery funds. However, they are also looking for access to consistent, accurate, and timely information on infection rates, regulatory requirements, and best practices for health and safety.

The misinformation and mixed messaging remains one of the biggest roadblocks on the road to recovery.

Operators continue to push for passage of the RESTAURANTS Act, which calls for the establishment of a $120 billion grant program run by the U.S. Treasury that small restaurants, bars, food trucks, caterers, and other similar establishments can use to cover various operating costs, including payroll, rent, mortgages, supplies, and PPE. Grant amounts are determined by comparing revenue from 2019 to revenue in 2020, and funds do not need to be repaid.

Coca-Cola is among the bill’s supporters. As is Delta Air Lines, Sysco, US Foods, and American Express. There hasn’t been a lot of movement in recent days, aside from more industry support.

In order to successfully get back on their feet, restaurant owners told Coca-Cola they would significantly benefit from the following:

  • Reduced state, local and federal fees: 59 percent
  • Tax credits for restaurants with unused and expired product due to COVID-related closures: 58 percent
  • A set of universally recognized standards and rating system that all restaurants can follow and share with customers: 57 percent
  • Collaboration with public health officials on sanitization mandates: 56 percent
  • Specialized state and federal funds earmarked for restaurant recovery: 56 percent
  • Flexibility in laws to allow alcohol sales for takeout or delivery service: 55 percent
  • Extended tax deferments for restaurants: 53 percent
  • More flexibility in the Paycheck Protection Program PPP requirements: 53 percent
  • Partnerships with trusted brands to help build consumer confidence in returning to restaurants: 51 percent


But will any of this happen? It’s out of restaurants’ control, for now. Other than lobbying, brands can only work on what they can touch day-to-day. Here’s what restaurants have done to survive, per Coca-Cola’s study:

Broadly—95 percent of restaurants have innovated in order to remain competitive during COVID-19.

The top 10 new services adopted since the pandemic’s onset, according to the study:

  • Takeout/curbside pickup service: 54 percent
  • Online ordering via delivery platforms: 45 percent
  • Online ordering via their own website: 44 percent
  • Delivery service: 42 percent
  • Beer/alcohol for takeout/delivery: 39 percent
  • Completely cash-free payment system: 38 percent
  • Outdoor seating: 37 percent
  • Bottled water or soft drinks: 36 percent
  • Online reservations 35 percent
  • Grocery sales and/or delivery 29 percent


Coca-Cola pointed to the final note as an opportunity, given 72 percent of consumer express interest for the offering.

Some other creative new offerings:

  • Family-sized menu items
  • Grab-and-go items
  • Customized meals
  • Complimentary dessert
  • Coupons
  • Theme nights
Consumer Trends, Story