In many ways, COVID-19 shrank our world. Citizens were ordered to stay at home. Travel was discouraged, borders closed. Businesses were shuttered, activities canceled. Entire lives started to revolve around the home, from work to entertainment to dining to family engagements.
Within the confines of one’s home, it became harder to see the forest instead of just the trees, especially with so much of life regulated by local authorities, whether at the city or state level. Even in vaccinations, accessibility has been mostly dictated by local providers and politicians.
That’s made the world feel like a very small place. But of course, this has been a global pandemic, with virtually no corner of the planet untouched by the effects of COVID-19. And restaurant markets around the world have had to deal with many of the same challenges as American businesses.
Here’s a snapshot of three international markets and how the pandemic has affected their restaurant industries in the short term and long.
The United Kingdom
Broadly speaking, restaurants that have best survived the COVID-19 pandemic have been those that already served food via drive thru, delivery, and other off-premises channels to residential areas, or quickly pivoted to doing just that.
In the United Kingdom, perhaps no restaurant company embodies that intense off-premises focus as well as Camile Thai Kitchen. The Dublin, Ireland–based concept was founded in 2010 with the goal to become the “Domino’s of Asian food,” says founder and director Brody Sweeney, which meant that from the jump it had homed in on a delivery-centric business and created its own ordering app.
“We noticed back then that Asian food traveled really well. It was quick to cook like a pizza but also holds well for 20–30 minutes while you deliver it,” Sweeney says. “Consumers expected their food inside 30 minutes, and if it was 45 minutes, they weren’t happy. So we really concentrated on the logistics piece doing restaurant-quality Thai food.”
It wasn’t the only way Camile innovated. The business also focused heavily on health and sustainability, becoming the first European concept to print calories on the menu and offer compostable packaging. But delivery was its pièce de résistance, the model that helped it to grow to 35 locations by the time COVID arrived. At that point, Sweeney says, 70 percent of its business was off-premises—a fortuitous position to be in considering what was to come.
His description of how the pandemic played out in the U.K. reads much like things state-side. Fear and uncertainty reigned last spring before giving way to a roller coaster of surges and corresponding regulations. Restaurants were particularly dismayed when McDonald’s decided to shutter all 1,270 of its U.K. restaurants in mid-March, even for takeaway business; Sweeney says much of the industry there follows in step with the quick-serve giant, as it does in the U.S.
“You’re wondering, ‘Are we being foolhardy or stupid being open?’ But we got over that. We made a decision pretty quickly that we’re going to stay open. We felt also that we were part of the solution of feeding people during the crisis,” he says. “Because so much of our business was off premises, we were able to [turn around] pretty quickly.”
Camile’s game plan for success during the pandemic mostly followed a familiar script: The quick serve developed contactless service protocols, became more stringent on sanitation practices, and it even stopped accepting cash. But then it did something quite unfamiliar, in fact something downright futuristic: It started testing drone delivery.
In a partnership with drone service company Manna that was planned before the pandemic, Camile trialed delivery by drone in west Ireland cities like Galway. The process is straightforward: Customers within a three- or four-mile radius who order for delivery are sent a Google Earth image of their house with a grid overlaid, and they pick a square on the grid where they want their food to be dropped (presumably in their yard or driveway). Camile cooks the order and then loads it into an autonomous drone, which ascends 400 feet into the air and flies at 50 miles per hour to the customer’s home. When it arrives, the drone sends a text to the customer to confirm receipt, then it descends, opens a door, and lowers the order to the ground via a string.
There’s still some “future-proofing” to be done to the drone process, Sweeney says, as federal agencies have to sort out how food, retail, and shipping businesses can leverage the model without filling the skies with robots. And it’s not a silver bullet for business; he points out that it only works for residential deliveries because drones can’t easily fly around skyscrapers or drop orders onto busy sidewalks. But he thinks drone delivery will evolve by leaps and bounds in the next 12–18 months, and that, some day, Camile could do 70 percent of its deliveries by drone.
“It’s quicker, it’s cheaper for us, faster for the consumer, [and] environmentally friendly,” he says. “It just checks so many boxes for us.”
Sweeney’s excitement for the potential in drones reflects his general attitude toward post-pandemic life. Similar to the U.S., optimism abounds in the U.K. as more people are vaccinated. In fact, the country—which was savaged by a coronavirus variant in the winter and at press time had more than 4 million cases and 120,000 deaths in the past year—has been heralded for its swift vaccination efforts. But even as the virus subsides, Sweeney says, restaurant owners and operators are taking stock of a devastated industry, one in which he says “90 percent of restaurants, pubs, and hotels either closed or on life support.” A moratorium on evictions has been one of the few things keeping many businesses in operation, but that could soon change.
“There’s a real concern here that when this moratorium on evictions is lifted, a lot of people are going to throw in the towel, that they just can’t take any more of it,” he says. “And the other big concern is how quickly business is going to come back. Tourism is shot for this year in Europe, we would think, in any meaningful way. So any tourism-related or tourism-dependent businesses are going to have a very slow comeback.” He adds that business districts in the U.K.’s biggest markets have been just as hurt by remote work as New York, Chicago, and other American cities.
There’s no doubt a long row to hoe for the U.K. restaurant industry. But Sweeney is confident in the experience of restaurants—whether that’s the experience of watching a flying robot deliver your food, or the experience of cozying up in a pub for a pint with friends. Either way, the market for foodservice is all but guaranteed.
“People aren’t eating any less food than they were a year ago. That’s comforting. In fact, arguably they’re eating more food,” he says. “What they are doing is consuming food in different ways. And I think savvy restaurant people will figure out how people want to consume food in a different way and adapt our businesses to serve them.”
With the pandemic mostly behind us and Camile’s business model proved to be not only of the moment but also very much of the future, the concept is turning its eye toward expansion. Sweeney says that will be concentrated mostly on smaller footprints with less dine-in than before, as well as some partnerships with ghost kitchens, including at least one in the U.S.
For those brands eager to return to expansion mode, Sweeney reminds that the U.K. has been a robust market to major quick serves like McDonald’s, Domino’s, Burger King, and Papa John’s because not much gets lost in translation between this side of the Atlantic and that one.
“I’d say Britain is a great place to put on your radar,” he says. “You’ll find it relatively easy because of the language. It’s a sophisticated market.”
The Middle East
Prior to COVID-19, there were few global markets that were more appealing to American franchises than the Middle East. For decades, nations like the United Arab Emirates, Kuwait, Qatar, and Saudi Arabia, and cities like Dubai, Abu Dhabi, Riyadh, and Doha, were coveted by major companies looking to capitalize on demand for American brands that had surged since the early ’90s, following the first Gulf War.
Sary Hamway, founder and CEO of Dubai-based franchise training and consultancy The Franchise Trainer, estimates that around 70 percent of the brands in mall food courts—very popular gathering spots in the region—were franchises, most of them out of the U.S.
“American brands are trusted here not only because of the taste of the food but also because of an excellent management system behind the business,” he says. “Local brands have their own limitations when it comes to expansion through franchising.”
This unfortunately became a weakness in the COVID-19 pandemic. Whereas the franchise model proved an advantage in the States, with franchisors offering valuable guidance and support for operators in an unprecedented crisis, that same support couldn’t travel halfway across the world, Hamway says.
“There is still a degree of helplessness in supporting franchisees worldwide because the training, the support, the periodical visits, the store auditing systems, and the quality control—you can’t do that without traveling. I cannot do it on a Zoom call,” he says. “So the support from international franchisors to franchisees worldwide has decreased phenomenally.”
In addition, the supply chain became a major challenge for American brands operating in the Middle East. Those concepts that suddenly couldn’t import food from the U.S. were forced to find local sources for their ingredients, Hamway says, which affected quality and led to corner-cutting.
“For an American restaurant franchise operating in the Middle East, supply chain is 100 times harder than operating in the home country because of the distance,” he says, adding that the vast majority of restaurants have reengineered their menus to navigate around supply issues.
Of course, there were challenges that affected all restaurants in the Middle East, not just the franchises. A big one was labor. Hamway says it’s common for restaurants to recruit workers from other parts of the world, like the Philippines or India, and many of those workers had to go home because of the pandemic. Keeping up with rent became a problem for many, too, because real estate is often very expensive in the bigger markets and landlords weren’t always willing to renegotiate leases or defer payments. Still others couldn’t accommodate the design modifications necessary to follow capacity and safety regulations, he says, while some, like bars and full-service restaurants, couldn’t make the pivot to off-premises service that was necessary in the early days of the pandemic, when there was a total lockdown in the area.
It wasn’t all doom and gloom, though. Delivery was already very popular in the region, Hamway says; the hot climate and the social and cultural ecosystem made it very popular for families to stay at home and order food through Uber Eats or local service Talabat. And many operators found success by getting creative with everything from robot waiters to contactless point-of-sale systems to virtual family events where the restaurant sends food and supplies ahead of a cooking demonstration.
Much as the restaurant industry in the U.S. has found silver linings in the COVID-19 pandemic, so too has the franchise model, Hamway says, which will benefit restaurants in Middle Eastern markets in the years to come.
“[Restaurants] started to deal with the situation with respect to health measures and hygiene,” he says. “Quality control needed to be much more rigid, more strict. International franchises are rebuilding their operating manuals to include dealing with pandemics and health issues.”
When the coronavirus first became a household name in the U.S., it was still something that Americans could hold at an arm’s length. The virus had yet to disrupt everyday life, but instead was something playing out on TV screens as it roared across another part of the world—specifically the Asia-Pacific region, including countries like Japan, South Korea, Singapore, and especially China.
Danny Lee watched the pandemic unfold in real time. The vice president of operations for Five Guys Asia-Pacific has overseen the brand’s growth in that part of the world since Five Guys first debuted in Hong Kong in 2018, and had just successfully opened its first location in Singapore in late 2019. He says things moved very quickly once it became clear in February 2020 that COVID-19 was not about to go away—so quickly that his team there had to make split-second decisions as soon as authorities issued shut-down measures with little notice.
“We all sat down and put a plan together,” he says. “We have a closing procedure; we have a reopening procedure. And obviously, from an operation standpoint, we do a lot of prediction—so we have to predict, ‘How long is this lockdown going to last? Two weeks? One month? What do we do?’ And then we have to have a very nimble plan and be very flexible.”
As sales plunged, Five Guys scrambled to adjust to contactless service. Digital ordering and delivery became the same kind of lifelines in Asia as they did in the U.S.; within two months, the Five Guys stores had returned to normal sales levels.
What followed was a roller coaster of a year, with wave after COVID wave rolling across the Asia-Pacific region and individual countries introducing their own variety of regulations to curb the spread of the virus. Lee says countries like China and Singapore, which enforced more controlling measures over the population, were able to keep COVID-19 more at bay, while others like Malaysia and Thailand struggled to do that.
Over the course of each wave, it’s become easier to predict how the restaurants will need to adjust, Lee says, and guests have grown more accustomed to the various measures taken to protect from any outbreaks. “By wave four, somehow they are used to it. They know that certain restaurants have measures in place. They felt safe coming back,” he says. “Of course, you will still have some smaller percentage of people who still don’t want to come out. But you see improvement even with your third and fourth wave.”
Not only are Asian consumers more used to pandemic measures, but they’re also used to the new behaviors brought about by the crisis. Lee says delivery wasn’t hugely popular before COVID, maybe 5–10 percent of a given restaurant’s sales. That number skyrocketed to more than half in the thick of the pandemic, he says, and even when the waves subsided, remained around 20–25 percent of their business. Mobile ordering has likewise become a common part of consumers’ routines, as has contactless service.
Lee says service has been permanently changed in Asia-Pacific restaurants, and that change revolves mostly around choice. Some consumers might prefer delivery; others might prefer ordering ahead and picking up; still others might prefer to order on site but with their phone instead of a cashier. And restaurants will likely have to provide all of those options to satisfy the range of demands.
As the U.S. continues to struggle to find a sense of normalcy at the tail end of the pandemic, many Asian nations have managed to do just that. Speaking from Shanghai, where Five Guys was preparing to open its first location, Lee says most people have moved on.
“Even in Shanghai, when you’re on the street, if you don’t talk about COVID, if you’re not aware of COVID, the only difference you see is people wearing masks, and before you enter a mall, you just have to show them your QR code, your health code,” he says. “Other than that, the restaurants are full, the streets are full of people. People are just going about their daily lives. So really, I think APAC, particularly Singapore, Hong Kong, China, they controlled it quite well, and they are able to maintain that level of normality in the people’s lives.”
China and the rest of Asia have long been a prize for American brands looking to expand globally, as the potential in the most populous part of the world seems limitless. And Lee says there is real potential for brands, as he sees the pandemic as being a “reset button” that has thinned competition and given renters better leverage when negotiating with landlords. But COVID has also changed how many of these nations do business; Lee points to China’s new standard of testing imported cargo before it can be released to distribution centers. That means restaurant operators should know what they’re getting into before expanding into these countries.
“I would advise any brand who wants to enter Asia to do their homework,” he says. “You need to look into supply chain you need. You need to factor in extra time and you need to make sure that you understand the procedures, the protocols, the restrictions, the permits, the registrations, and put it into all your consideration.”