Just 11% of bar and restaurant operators have been able to generate sustainable profits by offering takeout and delivery, according to a survey conducted by Nielsen CGA, the market research firm’s on-premise channel data arm.
Nielsen CGA conducted the survey of U.S. bar and restaurant owners and c-suite executives from more than 100 distinct businesses or groups, with a focus on independent concepts and small chains, to understand the effects of the on-premise shutdown in the U.S. caused by the COVID-19 pandemic. The latest data comes as all 50 states have begun reopening in advance of the Memorial Day holiday weekend.
More than half of the respondents (52%) said they would continue offering takeout and delivery once on-premise drinking and dining resumes, as they expect demand for those services to continue beyond the shutdown. However, the fees from using third-party delivery services have proven costly, as 60% of operators said reduced fees would help make their businesses more sustainable.
Asked how suppliers can help their businesses, 58% of the bar and restaurant owners and execs surveyed said they’re seeking short-term product discounts, while 46% said they’d like help driving foot traffic and in marketing to help consumers return to their establishments.
In the interim, 52% of operators said they plan to reduce their food and drink offerings until “regular sales patterns are established.” And 57% are seeking “clear, evidence-based, recommendations from their suppliers” on optimizing their drinks assortments.
Just 35% of operators plan to keep their usual assortment of brands stocked in the pre-COVID-19 world. That leaves 65% of the market that suppliers could be fighting for in order to maintain their placements, Nielsen CGA said.
“The majority of on-premise operators believe that they are in for a bumpy ride as the industry transitions towards a more predictable ongoing performance,” Scott Elliott, SVP, Nielsen CGA, said in a release. “They really want help, and the suppliers that offer exceptional support now will gain the kind of loyalty that may have seemed impossible before this crisis.
“That said, the stakes are high for these operators — who are in need of facts to help remove risk through this unprecedented operating period,” he continued. “Suppliers that work as true partners and offer real value to on-premise owners and operators will gain loyalty and advocacy, two of the most difficult things to achieve in the on-premise space.”