BK Delivery Deal - © 2020 Burger King

Sunday Musings: What Will The New Normal Look Like?

I think, when we passed the point where attempts over the summer to reopen the economy failed so resoundingly, many folks started wondering what the post COVID-19 world will actually look like. I have confidence that we will come out of the pandemic at least as strong – maybe stronger – than we went into it…

Kids Cooking Family - © activekids.comI believe there will continue to be more family cooking and home cooking going on
after the pandemic passes – because many of us will have gotten into the
habit, and many will continue to enjoy the freedom to do so,
thanks to permanent work-from-home policies.

A few indications…

We’ve already had a few indications.A big headline on the business page of the local paper this past week shouted: “[Major Corporation] shutters downtown offices permanently’. The well-known Ottawa based company, an information economy loader, has decided to downsize expensive centralized office space and move to a work-from-home business model permanently. The COVID-19 crisis simply caused its masters to confront a coming reality sooner than expected. An experiment that was forced on them by the need to ‘socially distance’ worked, the majority of their employees liked the stay-home plan, and a robust online infrastructure backed up by a reliable data service ‘cloud’ made it all possible.

Hundreds, then thousands of other corporate entities are expected to follow suit. Such a change will save them (collectively) billions in rent or real estate ownership costs, and their employees will save millions in commuting and dress-code-related personal costs. Employees will enjoy the freedom to manage their ow time and will have many more hours weekly to spend with their families, taking part in more family- and community-strengthening activities than they were able to before.

Newton’s Third Law of Business

Newton’s Third Law of Physics states that, For every action, there is an equal and opposite reaction.” On the down side, then, downtown service-related businesses will tank leaving more billions of dollars worth of commercial space empty. But for each downtown closure, there should (according to Newton) be a new opening in the suburbs as new ‘main streets’ and ‘town centres’ emerge’. Yes, municipalities will lose huge amounts of revenue tax revenue sources connected with hundreds of thousands of square metres of downtown commercial space. But commercial real estate losses on downtown high-rises should be balanced (at least to a certain degree) by demand in the ‘burbs for more-distributed space in the mid-rise range – 3-6 stories, with retail on the ground floor and, perhaps, some ‘choice’ residential space on upper floors.

Focus on the foodservice sector

Meal Kit services are already predicting the the spikes in their business that have resulted from more folks cooking at home will not recede entirely after the pandemic has passed. Food delivery services in general predict that they will continue to do more business than before the pandemic, in part, thanks to the new habits many Fast Food lovers are cultivating using online (see photo, top of page) and smart phone ordering and payment apps. And restos that have been relying on take-out and delivery services during the COVID-19 crisis are already considering changing their business models permanently, regardless of when their dining rooms might be able to re-open safely.

For instance, major resto industry players such as McDonald’s have been testing out new ideas on their franchisees and suppliers aimed at gauging the acceptability of more-streamlined menus and a greater emphases on non-contact customer interactions, with an eye to continuing on after COVID-19 much as they are now, in the current environment of enhanced sanitation and constrained dining room service. Franchisees and the head office both like the idea of ‘refocusing on core values and menus’ because it will save on staffing and inventory costs.

I’d like to see more one-off and sit-down restos on our new suburban main streets and at our new town centres. I think this is definitely a possibility, given increased demand as workers continue to move massively into home offices over the next decade. This notion also follows Newton’s Third Law of Business. Yes, I have faith that many of the small, independent, neighbourhood eateries that have closed their doors permanently due to the pandemic will re-appear (whether under the same or new management) as demand from growing armies of home-workers is felt.

Not an overnight change

This won’t be – can’t be – an overnight change. It has to be a process where the current normal recedes into history and the new order builds itself up again following he pandemic crisis. And brace yourself for more changes in the foodservice industry over the coming couple of decades, some of which we can’t even begin to predict this early in the game.

My take

The foodservice industry and its customers are in for a rough ride, but I’m confident it will be worth ‘sticking it out’ in the end!

~ Maggie J.