Adaptation has been the fundamental business principle at the forefront of people’s minds for the last few months. And no one has done this better than the restaurant industry. With dine-in options off the table in the beginning, restaurants from giant chains to mom and pop eateries have embraced curbside take-out and delivery service as a new business model that was thrust upon them virtually overnight. But how will restaurant experiences look as we enter the recovery phase?
As we see restrictions begin to lift, the restaurant industry is maneuvering yet again to put new protocols in place to ensure the safety of both their team members and their patrons. Those going to dine-in restaurants for the first time in months will expect nothing less – and they’re anxious. The timeline view in the Quid product shows us that the conversation surrounding restaurants has spiked significantly during the pandemic.
In light of this, Jose Cil, CEO of Restaurant Brands International (RBI), recently penned an open letter which highlights the health measures and financial safety nets that they are employing with their flagship brands (Burger King, Tim Hortons and Popeyes). They understand that this isn’t business as usual and that diners will expect elevated standards. They’re making the best of it, for sure.
Making the Best of a Bad Situation
RBI and its subsidiaries are speaking out to let their partners, teams and customers know what they are doing companywide to help the transition go smoothly. They’re directly targeting:
- Restaurant team member support in case of illness due to COVID-19
- Elevated hygiene and safety procedures, which include in-store social distancing measures
- Reduced-contact options via home delivery or curbside pickup through their mobile app
- Deferred or restructured rents for applicable franchisees along with cash advances
Many of these items are meant to boost support of employees and franchise owners while others, such as a delivery roll-out and an improved mobile app service, will be enticing to customers.
Industry leaders are painfully aware that maintaining a positive uptick in consumer sentiment is critical to a brand’s success. It’s particularly important for restaurants right now to make their customers feel safe as they emerge from weeks of lockdown. Naturally, many people will be wary – but they’ll definitely share the love online for the businesses and brands that make them feel taken care of.
And having a strong balance sheet to support RBI’s efforts helps as well, of course . . .
It Starts & Ends with a Strong Balance Sheet
Restaurant revenue has slowed to a trickle. Those with high overhead and minimal savings/liquidity have found themselves nearly out of options as the weeks have stretched on. Brands such as RBI that have maintained a strong balance sheet have been able to pivot efficiently and move their resources around to areas that need adjustment and support.
It’s not to say that RBI hasn’t been affected, because it has. Their stock has fallen by 20.59% over the past three months. This is no surprise given the tailspin that the restaurant industry went into at the onset of COVID-19. And their brand passion suffered along with it.
However, it’s not all bad news for RBI as they are making a strong comeback. This is thanks in large part to maintaining liquid resources that have enabled them to make the changes that the times are calling for in the industry. And a strong follow-through just might be the thing to push their brand passion index out in front of the general conversation.
In the letter released on April 30th RBI stared that in addition to already having $1.5 billion at the beginning of the year, they have also drawn down an additional $1 billion in revolving credit leaving them with $2.5 billion cash on hand to accommodate necessary changes. Its infrastructure is strong, and investors are listening.
In the past month RBI has recouped 16.99% of its 20% losses adding over 7 dollars per share to its stock price. Coincidence or not, RBI’s upward trend tracks neatly with their open letter. With an action plan in place and deep pockets, RBI is drawing back investors seeking rays of light in the QSR industry. Sometimes it pays to show your hand:
Moving Forward with Significant Changes
Obviously taking care of affairs in-house comes first, but it sure doesn’t hurt to follow RBI’s example and let people know where you stand and what you’re doing for them. The past couple of months have been anxiety-ridden for sure but how do people feel about going out to eat again?
A social mood analysis of dine-in restaurants in the NetBase product shows anticipation, joy and trust among the top positive emotions.
The fact that disgust and sadness appear fairly prominently shows us where there are concerns and problems that need to be addressed. A closer look at sentiment terms and top emotions can give us a better understanding.
Words such as skeptical, terrify and worry steer the narrative surrounding logistical and political issues yet to be ironed out. Phrases like ‘post COVID-19 dine-in problems’ and ‘community’s fear’ further highlight the fact that there is still work to be done.
As we enter the recovery phase, the brands that will come out shining are the ones that pool their resources to address social concerns head-on and get them out of the red.
And this is why industry leaders reach for the power of next-generation artificial intelligence (AI) so they can see the global conversation in real-time and adjust their action plans to facilitate recovery and growth. You should too!
Be sure to reach out for a demo to see how Netbase Quid can transform your social listening into actionable market intelligence.