Lessons From The Last Recession: How Restaurants Can Thrive During Economic Turmoil

Bill Chemero is Chief Development Officer (CDO) of Wayback Burgers, one of the world’s fastest growing fast casual burger franchises.

With the Great Recession in our rearview mirror, consumer confidence in the United States was high as we began the second decade of the twenty-first century. But then a global pandemic happened and restaurant owners — new, old and future — had no idea what to expect. Shelter-in-place orders, social distancing, contactless delivery and the host of other terms and practices that have become commonplace were not part of our daily vocabulary or business plans before the coronavirus pandemic.

And yet, people will always need to eat. For many, restaurants are a primary meal source. The ones who adapt quickly and effectively to a changing environment, by finding new and innovative ways to deliver a pleasurable dining experience, will come out on top.

Restaurants have survived some tumultuous times in the past. While a great number of independent restaurants have closed their doors, with little chance of reopening, at Wayback Burgers, our numbers rebounded quickly and comparative systemwide sales were actually up year-over-year for the third quarter. Here, I share a few lessons learned and tips to can help restaurants thrive during economic turmoil:

Embrace technology.

Before the last recession, the restaurant industry was pretty old-fashioned. Beyond simple websites, few restaurants were utilizing technology in any meaningful way. After the recession, whether due to technologically savvy consumers’ demand or restaurants trying to set themselves apart, businesses began to realize the power of harnessing technology. Brands started to create their own apps so people could more easily access menus and order food. Self-order kiosks began popping up. Third-party delivery apps gained popularity.

For restaurant owners previously resistant to adopting technology as part of their business strategy, I imagine the coronavirus pandemic has been a rude awakening. Even for those independent restaurant owners and brands like ours that had been adopting and integrating their own app and building relationships with third-party delivery services, the demand for tech has been overwhelming.

Tech advances predicted to take years were crunched into mere months, and I believe consumer pressure to stay ahead of competitors will be a crucial driver of future growth in the fast-casual sector and the restaurant industry overall. By 2030, I predict restaurants and technology will likely have an even more sophisticated relationship, working in tandem in ways that were almost unimaginable five years ago.

Refresh your menu.

Technology will play a vital role in the success of your restaurant moving forward, but so will getting back to basics. Focusing on the quality of your menu and your food will always help you stand out from your competitors.

Continue to innovate your menu, even if that means sticking to the staples while offering inventive “limited time offers.” Pandemic or not, people are often looking for fresh and creative food options.

I cannot stress enough how important it is for restaurants and brands to adapt and keep growing. As long as you’re in business, and the guests are coming — and particularly if your numbers are declining — make sure you’re continually refreshing your menu with LTOs or even by adding new staples. Give your loyal guests a reason to return or give first-timers a reason to try you out.

If you’re buying a franchise, make sure the brand pays close attention to these best practices and understands the importance of catering to loyal guests’ favorites, while continuing to offer unique options to keep them and possible new guests excited. In my experience, LTOs are appealing because they are fleeting and people like the idea of a special deal.

Cutting costs, wherever possible, will also help restaurant owners survive beyond 2020. Some restaurants tightened their hours and menu offerings during the pandemic’s early stages, which was a smart tactic to keep labor costs down. During the recession, McDonald’s decreased the cost of ingredients for their double cheeseburger by removing a single slice of cheese, according to a CBS News article. At Wayback Burgers, we focus on how our franchisees can use existing ingredients in creative ways to offer unique menu items. It keeps the cost of goods down, but allows them to offer LTOs to drive sales.

Observe trends to anticipate the lasting effects of economic events.

The competition will never stop coming, no matter what state the economy is in, and significant economic upheavals demand quick change and adaptability.

Interestingly enough, although both the Great Depression and the Great Recession were temporary, they led to lasting changes — some we still see today. Have you noticed big box stores like Target and Walmart with restaurants or coffee shops in them? They’re reminiscent of the lunch counters installed in department stores and popularized during the Great Depression. As a result of the Great Recession, fast-casual dining rose. Guests still wanted to go out to eat or order takeout, but with less discretionary spending, many couldn’t afford the high cost of casual and fine dining restaurants.

Keep an eye on the future.

Looking toward 2021 and beyond, restaurant owners and brands will need to make quick, strategic decisions in order to thrive, but it’s also important to keep an eye on the future. Take the opportunity to update and educate yourselves about changes in the restaurant world, and even re-evaluate your business plan.

Remember to focus on how you can set your restaurant or brand apart. Technology will be a key factor in your business’s future success, as will menu innovation and finding ways to cut costs. Give your loyal guests a reason to come back and new guests a reason to try you out. Whether they come in, order curbside pickup through your app or have their meal delivered via a third-party delivery app, make your offering available wherever your guests may be.

I have no doubt that the ability of owners and brands to adapt quickly to a changing landscape will be a differentiator for restaurants from here on out, and largely determine whether they thrive, survive or take a nosedive.