The pandemic was a bad thing, but fast food restaurants are coming back

Fast Food Product Managers Make It Through A Pandemic

The pandemic was a bad thing, but fast food restaurants are coming back
The pandemic was a bad thing, but fast food restaurants are coming back
Image Credit: jpellgen (@1179_jp)

I think that we can all agree that the Covid-19 pandemic has been a very, very bad thing. Just about every business was shut for a period of time and every product manager had their carefully created product development definition disrupted by the events that were caused by the pandemic. However, things are slowly starting to get better even as the pandemic is still with us. Product managers who work in the fast food business are among the ones who seem to be getting back on their feet the fastest.

How Fast Food Product Managers Are Recovering From Covid-19

The good news for fast food product managers is that it appears as though even a global pandemic can’t keep U.S. fast-food sales down for long. After mandatory closures and social-distancing orders ground the restaurant industry to a halt, sales at quick-service chains have begun to improve noticeably. Consumers do seem to like their fast food!

Examples of how the pandemic have affected the fast food chains include Chipotle Mexican Grill. They saw their share price reach a record high. Just last month comparable restaurant sales fell 35% from a year ago. However, that the decline has improved to the “high teens”. Shake Shack reported a comparable weekly sales drop of 73%, which had improved to a 45% drop. Wendy’s which began serving breakfast at its stores, said U.S. same-store sales fell 2.1%, after dropping nearly 26%. Share prices for the category have rebounded along with sales. All in all, this can start to look good on somebody’s product manager resume.

No matter how hard product managers work, customers who don’t have jobs won’t be able to shop at a fast food store. It is true that U.S. payrolls dropped by 20.5 million workers as the pandemic raged, some money still did reach those consumers’ pockets. Enhanced federal unemployment benefits, coupled with stimulus checks for many Americans, began to reach mailboxes. That fresh income isn’t likely to induce bigger-ticket consumer spending, but an extra value meal should be in reach for most consumers. Companies across the industry have reported much higher average spending per customer lately as large orders for families have increased in frequency.

Where Do Product Managers Go From Here?

The pandemic has caused the world to change. For fast food product managers, serving customers is a challenge with their dining rooms closed. Fast-food concepts can adjust far more easily than sit-down restaurants can. Having an existing drive-through infrastructure certainly helps too: McDonald’s said that about 90% of recent U.S. sales have been via the drive-through. In normal times, it accounts for about 66% of sales.

However, some restaurants, like Chipotle and Wingstop, have been able to boost sales even without a major drive-through presence. Investments in online ordering capabilities from 2019 and before have paid off for these firms. In the case of Wingstop, digital sales made up roughly two-thirds of total revenue in the first quarter. That is up from 40% in the final three months of last year. At Chipotle online sales tended to recur since the customer had already saved order and payment information in a mobile app. The result is that those sales more than doubled as on-site order rates plunged.

Product managers realize that delivery and drive-through can’t fully replace the lost sales from closed dining rooms, but those closures mean product managers can reduce major expenses such as utilities, labor to clean the dining room, and trash-removal services. As an example of this, Wendy’s has reduced the average daily sales break-even point for breakfast by 35%. Product managers do have to be careful: supplemental unemployment insurance runs out soon, and there is no guarantee that the economy will improve or that fresh stimulus will arrive. Higher meat prices as a result of packing-plant closures could eat into profits, too, because passing on rising food costs to customers in this environment will be difficult. Chains with a heavy presence in airports, shopping malls and other large gathering sites also will take longer to recover.


What All Of This Means For You

There is no question that the world has been greatly impacted by the arrival of the Covid-19 virus. As people were asked to stay at home and businesses were forced to close, the best laid plans of product managers went up in smoke – none of this is covered in our product manager job description. Now that we are entering a period of a “new normal”, businesses are once again starting to open up. Fast food product managers are starting to see their business start to rebound and they need to find ways to keep this going.

Customer traffic at fast food restaurants has started to increase after everyone was permitted to no longer have to stay at home. A number of restaurants have seen their sales start to once again go back up. However, product managers have to be careful. If people don’t have money, then they won’t visit their restaurants. Stimulus checks have helped, but they won’t last forever. Fast food restaurants have come back quicker than sit down restaurants. Fast food restaurants with drive throughs are doing the best. Even restaurants without drive throughs are doing well if they’ve made the investment in online ordering applications. Restaurants who have had to close their dining facilities have gotten benefits from reduced expenses. However, product managers need to be careful about stimulus checks running out and meat prices going up.

The good news for product managers is that we seem to be past the worst part of the pandemic. Fast food customers seem to be returning to the restaurants in numbers that are looking good. However, product managers need to realize that we are not over this pandemic yet and they need to move carefully. The good news is that consumers seem to really like their fast food and this means that they’ll keep coming back for more.


– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™


Question For You: What can product managers do to get fast food customers to place larger orders?


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What We’ll Be Talking About Next Time

Product managers know that making our customers fall in love with our stores, our staff, and our brand is a critical part of our ability to be successful. This is why over the past few years there has been a big push by product managers to find ways to pamper our customers. With the arrival of the Covid-19 pandemic, we now have to take a step back, change our product development definition, and find ways to keep our staff safe while still trying to connect with our customers.

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