These Three New COVID-Era Metrics Determine 2021 Restaurant Success

At the risk of going all Winston Churchill on you, forecasting and planning for 2021 looks like “a riddle wrapped in a mystery inside an enigma.”

Increased COVID cases may have a negative impact on revenue.

Availability and acceptance of a vaccine may have a positive impact on revenue.

Meanwhile, the regrettable truth is the amount of competition will decline.  

So what do you focus on?

These three essential new COVID-era metrics tell you what you ought to be doing to survive, stabilize, and dominate in 2021. 

1. PPA

Since the crisis started, PPA ought to have gone up at least 10% – and as much as 20%.

All the research shows that guests now have fewer dining-out occasions but spend more.

Maybe they go all-out or take-home leftovers because they won’t be going out again this week – or they take a meal to grandma or someone else who does not want to be out.

If your PPA has not risen with this tide, examine how your guests feel about your brand, your current menu offerings, and how you sell at the table, online, and on the phone.

2. Tip Percentage

Guests see tips as charitable (but, sadly, non-deductible) donations to restaurant workers who they care about, empathize with, appreciate, and want to see when this mess ends.

This means that, since the crisis started, your tip percentage ought to have gone up 20-25%.

Tip percentages peaked during shelter in place, and has stayed high since then.

If that’s not the case at your restaurants, that could mean something else is happening.

One restaurant near my neighborhood posted on Facebook about an imminent closure because they could not find enough people to work for the small percentage of tips being earned.

I immediately saw this as an indicator – something was wrong with the restaurant. 

3. To-Go/Delivery Percentage of Sales

Your to-go and delivery business ought to be at least stable when your dining room sales increase.

In 2020, to-go and delivery became an experience to offer to guests and a permanent segment of your new circumstance-imposed business model.

At first, to-go and delivery sales dropped as dining rooms opened back up.

In healthy restaurants that were doing it right and continuing to improve, however, at some point to-go and delivery hit a floor.

Dining room sales increased without cannibalization of to-go and delivery.

Whether your percentage stabilizes (as it ought to) or declines (the canary in the coal mine), you must designate one person in your organization as captain/leader/owner of the to-go and delivery experience and continue to improve. 

Success Through These Metrics

Budget and forecast in my three categories, then create a rock-solid plan to achieve your goals.

And watch out for weakness in your organization that gets exposed by subpar performance around them.

Restaurants performing well on all three will have the highest level of survival and future segment domination.

That is what I want for you.

Over to you. How do you stack up in each of these metrics and what action will you take to hit your numbers in 2021?