June / July 2021 How will people eat post-pandemic, and what role can the supermarket deli play in that future? These are the questions the industry has to ask. Many mainstays of deli departments, such as salad bars and other food bars, were taken down or put to alternative use during the pandemic. Do they come back?
Retailers experienced a boom in delivery orders… will this boost be sustained? Some retailers, say in suburban areas, got a boost due to consumers eating “local” because they were not commuting to work. Many urban retailers tended to experience a deep decline in shoppers as office buildings, normally filled to the brim with hungry workers, stood empty and the lunch business almost disappeared. Will those buildings fill up again?
It is often the case that a crisis causes dramatic change, which accelerates what would have happened anyway. In other words, the atom bomb was clearly accelerated by the Manhattan Project of World War II, but with or without the Manhattan Project, nuclear weapons would have been developed. So the challenge now is to see what was a temporary improvisation that becomes superseded as time passes by, as opposed to what is now a permanent advancement whose creation or adoption was accelerated by the pandemic.
Let us look at three separate issues:
First, labor availability. There are reports across the country of restaurants being unable to find staff. They can’t open or can’t open at 100% capacity. Food retailers are in better shape as they did not lay everyone off, but many also report staffing difficulties.
Potential employees are held back by many factors: Some are still afraid; some have parents who are afraid; some find rich unemployment payments don’t make it worthwhile to re-enter the labor force; some have fallen into patterns that just don’t involve working.
Our bet is that this will all fade rather quickly. Supplemental unemployment is already being struck down in Republican-dominated states. It will probably be reduced or eliminated elsewhere in a short time. Though some have been mentally affected by the pandemic, the easy availability of vaccines and the lack of evidence that people are damaged from them will drive people back to work.
Second, delivery services. Both restaurant and retail delivery services have struggled to obtain profitability even at the height of the pandemic. Many customers were very generous with tips during these difficult times. They also ignored the premiums many restaurants added to prices on delivery service menus. The bottom line is that it is enormously cheaper to pick up dinner yourself rather than having a service do the order. It actually can be more convenient, since if you pick up take-out food on your way home from school or work, the food is there when you get home.
There has always been pizza and Chinese food delivery; this will surely expand to other types of cuisine. In urban areas, grocery delivery was from time immemorial. Many retailers, such as Walmart, have made grocery pickup much easier, not requiring going into the store. But that last-mile delivery is crazy expensive and is doubtful to sustain large market share.
Third, working from home. This is perhaps the most uncertain of the post-pandemic impacts. Having people work from home can save employers so much money by avoiding office rental, furnishings, etc. In addition, having people work remotely opens the door to more qualified employees who may be unwilling to relocate, and to cheaper employees who may be willing to work for less because they reside in areas with lower housing costs or even in foreign countries.
The internet had already started the move in this direction, and the pandemic has accelerated it. We just don’t yet know the quantification of this. To the degree it happens, we can expect significant effects in the food industry, especially with more consumers eating in low-cost rural districts and fewer consumers in high-cost urban districts.
The extent of change may be overstated here. Young people still have to be trained, and that is difficult when they are distant. It is also not clear whether the savings will be as great as it seems. In the long run, people working at home may want bigger houses, more dedicated office space, etc.
It is also not clear how happy people would be with this change. Younger people want to mix and mingle, date and find spouses. There are countless people who have rented urban apartments with multiple roommates who could have had an apartment of their own in a rural area. But they wouldn’t have had the same social opportunities.
Even older people may love their spouses and children but still might value getting out and having alternative social circles.
Of course, actions cause reactions. If people were working and living at home, it might well cause a boom in both business and personal travel. Even if it is more efficient to work from home, many people will want to get out. This, of course, means eating on the road or at hotels and resorts.
The best advice for the moment: Count on nothing! Be ready to pivot. Accept the idea that change is unpredictable, and our job in the food business is to find ways to meet needs that just can’t be perfectly predicted. The winners of the post-pandemic age will be those prepared for anything. DB