The days of pandemic-induced seismic shifts in consumer behavior are behind us.
2020 seemed destined to be known as the “Year of the Pandemic.” On March 11 of that year, the World Health Organization (WHO) declared that COVID-19 had reached pandemic status, and much of the world responded with aggressive actions to limit the spread of the virus. In the United States, within a matter of days, a national lockdown went into effect.
If all went well, SARS-CoV-2 (the coronavirus at the origin of COVID-19) would go the way of its predecessor (SARS-CoV-1). The timeline was eerily similar. In March of 2003, WHO issued a global alert regarding SARS-CoV-1, and declared it contained on July 5 of that same year. Fast forward 17 years to March of 2020, and the aspiration for containment was similar. On March 16, “15 days to slow the spread” was the plea of the U.S. government and resulted in a shutdown of a substantial portion of the national economy. If all went well, SARS-CoV-2 would share the same fate as its viral ancestor. Today, 21 months later, those aspirations seem like little more than naïve, wishful thinking. COVID-19 and its variants have been credited as a contributing factor to the deaths of over 5 million people around the world. As I write this, more than 730,000 of those deaths have occurred in the U.S.
The year 2020 seemed like it would never end. The pressure on our society was immense, and the restaurant industry was deeply impacted. The owners of tens of thousands of restaurants closed their doors during the early going (perhaps well over 100,000) and millions of their employees were out of work. Time seemed to slow down, with every day bringing new and unique challenges. Projects that would normally take months or even years to complete were compressed into a matter of days. In many respects, we reinvented the way we conduct business.
During the early going, the draconian measures seemed like they might succeed. Initially, the infections were concentrated in the northeast states and the disparate area of Louisiana. At the national level, the peak infection rate occurred on April 10, and then receded over the next 60 days. Heading into the summer, it appeared that SARS-CoV-2, while terribly disruptive at the outset, might go the way of SARS-CoV-1; the timeline was looking very familiar.
And that is where the similarity ended. Over the next 30 days, a new wave of infection impacted the southeast region of the country, with the peak coming in late July. However, as infections receded, hope arose that schools would return to in-person attendance in the fall, and that the coming holiday season would be celebrated in traditional fashion. We simultaneously cursed the pandemic and the year that hosted it, while looking forward with great anticipation toward 2021. Surely, the new year would bring a vibrant economy and the unleashing of pent-up demand. A repeat of the “Roaring Twenties” was a prognostication made by more than one industry pundit.
The final months of 2020 dashed all such hopes. The winter wave that swept the country did not peak until mid-January of 2021. The two previous waves, both regional in nature, paled by comparison. The infection rate in early 2021 rose to a level almost four times what it had been at the prior peak in July. Suddenly, 2021 seemed no better than the year that preceded it. The many memes besmirching 2020 now seem like foolishness of epic proportions; the solstice’s way of saying “how dare you.”
Despite COVID-19 being at its worst, our economy was not. Though the restaurant industry was far from being back to “normal,” it was in a better place than it had been after the initial lock-down. Many operators had adapted and evolved their business models to fit the conditions of the pandemic. In some cases, brands were thriving. As the new year unfolded, talk of a “Roaring 20s” evaporated, but speculation about the timing and nature of a “new normal” did not.
The first anniversary of the pandemic declaration ushered in a new way of looking at the financial performance of the industry. Traditional year-over-year comparable sales and traffic measures had lost their relevance. Brands that suffered the most in 2020 now had the potential to score unprecedented comp percentages, while brands that saw less significant declines in the early going of the pandemic appeared to be left in the dust by their rivals. The two-year view (2021 versus 2019) became the go-to measure for determining the state of a restaurant brand’s health.
As it turned out, yet another wave of COVID-19 would overtake the nation during the summer of 2021 and not subside until well into the fall. Yet in several respects, the pandemic was no longer the issue of greatest concern to the industry; the more pressing day-to-day challenges were the labor shortages and supply chain woes that developed earlier in the year, accompanied by inflation that came knocking at our door at a level unseen in many a person’s lifetime. In stark contrast to the never-ending “Year of the Pandemic,” 2021 seemed to move along at warp speed.
I struggle to come up with a catchy name for the year that was … but I do know what it feels like: a time of evolution and transition that delivered us to the “new normal.” Indeed, as we stand on the precipice of 2022, I submit that a return to normalcy (if there really is such a thing in a constantly evolving world) occurred some time ago. Come the second anniversary of the pandemic, a traditional year-over-year view of the performance of our industry and brands is what will be most relevant. The P&Ls and balance sheets of 2020 will have little bearing on the outlook for 2022. If one need a line in the sand for the return of normalcy, write down March 11, 2022.
The days of pandemic-induced seismic shifts in consumer behavior are behind us. The evolution of the consumer and our industry will be driven predominately by other factors. As has always been the case, some of those factors will be foreseen and planned for, while others will be novel and reacted to. I think there is one thing we can all be sure of in 2022: it won’t be boring!
Don Fox is Chief Executive Officer of Firehouse of America, LLC, in which he leads the strategic growth of Firehouse Subs, one of America’s leading fast casual restaurant brands. Under his leadership, the brand has grown to more than 1,120 restaurants in 46 states, Puerto Rico, Canada, and non-traditional locations. Don sits on various boards of influence in the business and non-profit communities, and is a respected speaker, commentator and published author. In 2013, he received the prestigious Silver Plate Award from the International Food Manufacturers Association (IFMA).
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