Are New York Restaurateurs Becoming Their Own Greatest Competitors?

Restaurant strategies that were on the downslope when COVID-19 hit, such as fine dining, got hit much harder, and those on the upslope, such as ghost kitchens, QSRs, and yes, some fast food, are going to grow exponentially quicker.

Independent restaurants and restaurant groups that never, in a million years, would have thought they’d be doing delivery and takeaway (or, at least, not a significant amount of it) are now, in fact, doing so. Reasons for not offering delivery previously included fine dining food not traveling well, the function only accounting for a small fraction of business, third-party delivery costing too much or an operator’s inability to control what happens once food leaves an establishment.

At the same time, diners have changed how they eat and their preferences. Since the pandemic impacted the industry, the following things have changed dramatically:

• They’ve become better cooks — many of us, much better.
• They’ve become accustomed to dining at home (whether cooking, picking up or getting delivery).
• Delivery service, quality and options have improved.
• Delivery and takeout packaging has improved, providing meals closer in quality and presentation to the dining-in experience.
• Even more meal kits with quality ingredients and easy instructions are available.

No longer are diners relegated to soggy pizza and poor quality, overcooked burgers with delivery. The best restaurants in town are delivering or offering window or curbside pick up. Will that end once COVID-19 has passed? For some entities, yes, but for many more, I think not. Most establishments cannot afford to turn away incremental revenue, and the cost of that business has come down dramatically since third parties’ egregious practices have been regulated.

Just three months ago, would I have thought about paying $100 for delivery? Absolutely not! Now, when I can order from Rezdora, Wayla, Daniel (I’ll get back to this one shortly), Crown Shy (takeaway), Osteria Morini, Eataly, etc. and get a really quality meal, I will and have. In the past, once delivery went north of $60 or so, I would usually opt to go out (at which time I would likely spend a good bit more). Since COVID-19, I have ordered from some of the best places in the city. What I’ve learned is that having a really nice meal (that I don’t need to shop, prep, cook or clean up for) while watching another episode of my favorite Netflix show, is a pretty good experience. And mixing my own Negronis with ingredients (via Drizly delivery) that cost me about $100 all in but will make me more than 20 drinks, isn’t so bad either.

A few weeks ago, my wife and I celebrated our 20th wedding anniversary. With basically nowhere to go dine in, we opted to get a weekend package from Restaurant Daniel. It included dinners for Friday and Saturday and brunch for Sunday. Yes, the charge was fairly significant, but for the cost of a dinner there (maybe less than the cost of one dinner), we had a weekend of incredible meals (and leftovers that lasted into the next week). It was a truly memorable experience at home.

Now, once things open back up, and the “new normal” sets in, will we go back to dining out? For the most part, yes! We are social beings. We don’t live in NYC to stay home and get delivery. However, has the way New Yorkers dine changed? I believe so. I predict the following:

• Initially, there will be a rush to get back to restaurants. Once it becomes clear that the experience will not be (for a while) what it once was, we will dine out less. Maybe four to five times per week becomes one to three.
• Takeout will continue to be prevalent.
• They will order delivery more frequently. Restaurants that got into the game will not easily leave it as that would render them less relevant in this “new normal” world.
• They will cook more.
• Restaurants will be more expensive.

The news is not all bad:

• New players will enter the industry with better models and do well.
• Most restaurants that exist today (and make it through) will pivot to better business models as well.
• Better takeout and delivery is here to stay.
• Ghost kitchens and ghost food halls will flourish (if they have strong business plans, strong capitalization and stronger management).

Many restaurateurs will want to go back to the way things were. They will want to pull back from delivery and takeaway. Many will not. We’ve created our own monster. It’s not such a bad thing. It could just be part of a better way to do things.

Read more about restaurants amid COVID-19, and navigate the industry with a diploma in Restaurant & Culinary Management.