The pandemic has permanently altered the consumer-restaurant relationship with operators investing in technology — such as POS digital signage — and real estate to align with changing consumer preferences, according to the 2021 Restaurant Franchise Pulse survey, conducted by TD Bank.
This study was conducted among a representative group of 251 restaurant franchise owners and operators across the United States from Nov. 10-22, 2021. Early in the pandemic, 72% of operators invested in delivery and mobile/online ordering to boost revenue during mandated stay-at-home orders, according to TD’s 2020 survey. Based on the 2021 survey, that investment continued.
Key numbers from the 2021 survey include:
- 71% of operators rely on delivery for 11% or more of sales.
- 33% rely on delivery for more than 20% of sales.
- 65% rely on mobile ordering for 11% or more of sales.
- 25% rely on mobile ordering for more than 20% of sales.
To keep up with changing consumer preferences, operators noted that their top areas of investment in 2022 include mobile ordering (54%); delivery services (47%); technology such as new POS digital signage or other in-store tech (45%) and alternative payment methods (37%).
“Consumers have become accustomed to the speed and convenience of mobile ordering and delivery, which in turn, has changed the restaurant franchise landscape,” Mark Wasilefsky, head of Restaurant Franchise Finance Group, TD Bank, said in the release. “Even once there is no longer the active threat of the pandemic, consumers will still turn to these mediums. Mobile ordering and delivery have become a part of everyday life and are no longer nice to have, but expected, and operators need to continue to enhance these offerings to keep up with competitors.”
Along with furthering their technological investments, operators are also altering their physical restaurant locations to cater to delivery. While only 15% plan to reduce the number or size of their franchise locations, operators are making other adjustments to their real estate.
Findings based on survey results include:
- 55% plan to add more space for pick-up.
- 45% plan to provide additional drive thru locations.
- 43% plan to add an outdoor on-site dining space.
“What we are seeing is that the pandemic has permanently altered consumer expectations and behaviors to the point that operators are comfortable enough to make long-term capital investments,” Wasilefsky said.
Despite the challenges the restaurant industry has faced since the start of the pandemic, operators have learned to pivot and as a result, 81% of respondents feel optimistic about the future. More than half even feel very optimistic and 47% believe their revenue will increase significantly.
The survey was hosted by global research company Engine Insights. TD Bank is headquartered in Cherry Hill, New Jersey. The banking chain provides more than 9.7 million customers with a range of retail, small business and commercial banking products and services at more than 1,100 locations in the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida.