Restaurants are reducing their menus to streamline their operations amid the coronavirus pandemic.
The industry has been hit hard by efforts to stop the spread of Covid-19. From March to May, eating and
drinking place sales were $94 billion below expected levels, according to a recent survey by the National
Restaurant Association. Reopening will be difficult as well. The slimmer menus are a way to shed
complexities and costs, and push simpler or more popular items at a time when conserving cash is
crucial for restaurant operators.
McDonald’s has reduced its menu during the pandemic.
Here’s what is off the menu
Denny’s (DENN) removed dishes like the Sizzlin’ Supreme Skillet, Choconana Pancakes, Spicy Sriracha
Burger, Fit Slam and Slow-Cooked Pot Roast from its dine-in menu through fall. “When we realized the
effects of the pandemic we quickly mobilized to create a new streamlined menu,” said John Dillon,
Denny’s chief brand officer, in a statement emailed to CNN Business. Denny’s, which still has plenty of
options, is serving items that “simplify operations and [are] easier to execute for our team members,” he
said.
IHOP used to have a 12-page menu. Now it’s giving guests a 2-page, disposable menu. The shift
“required a lot of reductions,” Brad Haley, IHOP’s chief marketing officer, told CNN Business. IHOP held
on to popular items that weren’t too difficult to prepare. It lost complicated items that fewer guests
ordered, and that could be replaced with something similar.
One example: a Simple and Fit omelet made with egg whites and spinach. While the specific dish isno
longer on the menu, customers can build their own omelet using the same ingredients. “We didn’t lose
any big menu categories, we just trimmed across the board,” Haley said. A smaller menu makes it easier
for IHOP to train new workers as it reopens. It also means less waste for franchise operators, who may
throw out unusedingredients they buy for less popular menu items.
“I don’t see us going back to the full 12-page menu,” Haley said.
Dave & Buster’s (PLAY) reduced its 40-item menu to 15 offerings, CEO Brian Jenkins said during a
recent analyst call discussing the company’s first quarter financial results. “I do not expect that we will
go back to the 40-item menu,” he said.
Business, adding that “this decision helped simplify operations for our restaurant crew while also
improving our customers’ experience.”
The chain axed salads, bagels, yogurt parfaits and all-day breakfast during the crisis, the Wall Street
Journal reported. The company isplanning to this summer bring back a handful of the discontinued
items.
Restaurant operators are in a tough spot. For months, their dining rooms were closed because of local
social-distancing orders. Now, as many start to reopen their doors, they face uncertain territory.
With unemployment so high, some people may decide that eating out is just too expensive. Others may
Even if diners are eager to goout, restaurants have to reduce their capacities and keep people far
enough apart to satisfy social distancing rules.
Meanwhile, their costs are soaring. Restaurant operators have to pay for personal protective equipment
for workers, lots of hand sanitizer, paper towels, contact-free payment systems and more. They may
have to pay to redesign their dining rooms. And the cost of some ingredients, like meat, is way up.
Reducing menus could help. And, at least for now, customers don’t seem to mind.
The problem with raising prices
Restaurants already operate with very thin margins, so it’s difficult for them to absorb costs without
making any changes.
One obvious way to cope with higher costs is by passing them on to customers via higher prices. But
diners won’t stand for it.
“What restaurants really hate is adding fees and doing things that frustrate the customer,” said Sean
Kennedy, the National Restaurant Association’s Executive Vice President for Public Affairs.
If customers see prices go up, they may turn to a competitor. Or they might just eat at home.
“There’s a lot of options outside of restaurant meals,” said Tim Powell, a managing principal of
Foodservice IP, a foodservice consulting firm. “If you start raising prices it means that there’s a good
chance that demand, or the traffic, will go down.”
While some restaurants have reportedly started adding so-called Covid surcharges to bills, US food
Statistics.
Less is more
Shrinking the menu is a better option. It allows restaurants to order ingredients in bulk and achieve
better economies of scale. And because restaurants remove their least popular or more expensive
items, the changes may impact a relatively small number of customers.
At Dave & Buster’s for example, “the 15 items we selected generate a significant portion of our food
revenue,” CEO Jenkins explained.
Even before the pandemic hit, restaurants would sometimes trim their menus to reduce costs or
increase efficiencies. “We tend to go in and out of those phases,” said Powell, the food consultant. Last
year, McDonald’s reduced its late-night menu and abandoned its craft burgers to help speed up its
service and make its menus less complex.
And while some customers may miss seeing their favorite dish on the menu, others may be happy with
— or at least tolerant of — the changes.
At McDonald’s, the newly reduced menu has improved customer satisfaction scores “significantly,” said
Mark Salebra, chair of the McDonald’s National Franchisee Leadership Alliance in a statement provided
by a company spokesperson.
Plus, some diners may not care that much about variety right now.
Denny’s “customers have been extremely understanding of the adjustments we’ve made,” said Dillon,
IHOP’s Haley put it this way: “we’re not seeing complaints from guests.”( CNN / IM )
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