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A New Normal: Restaurants Selling Groceries to Stay Afloat During COVID-19

A New Normal: Restaurants Selling Groceries to Stay Afloat During COVID-19

From produce to pantry staples, some restaurants are selling groceries to keep their businesses alive.

The idea is catching on nationwide: stay-at-home and social distancing orders meant to slow the spread of COVID-19 have put restaurant dining on hold, forcing many to close and leaving others barely surviving. For restaurants that are still operating, coming up with ways to hold onto customers who are no longer allowed into dining rooms has been tricky.

Delivery is one option, but it’s expensive. Businesses that use third-party services like Grubhub or UberEats generally have to pay them a fee, which could eat into margins that are already razor thin. One way to avoid that problem: selling groceries.


Related: How Grocery Stores are Using Robots During COVID-19


Why Groceries?

From large chains to local eateries, restaurants are increasingly turning to grocery sales as a much-needed source of income during this crisis. They sell items they already offer up to customers, just in a different form. Opening up temporary grocery stores helps bump up the number of supermarkets and provides a way to support struggling suppliers.

Grocery stores have seen a surge in demand, leading to bare shelves in some markets. Simultaneously, many grocery chains have ordered stores to limit hours and regulate how many people may enter at once, causing long lines to form outside. Even though grocery shopping is still allowed for people who aren’t sick or elderly, more grocery options can help share the load big markets have had to bear in recent weeks.

For customers, it’s an opportunity to grab a few necessities without needing to brave a crowded store or fight for a coveted grocery delivery slot. And while local supermarket may be all out of flour – a hot commodity as people sheltering at home pick up baking projects – local restaurants probably have plenty. That’s because in many cases, different supply chains provide food to restaurants rather than grocery stores.

Grocery stores sell five-pound bags of flour and are having trouble keeping shelves stocked right now. Meanwhile, restaurants and bakeries have easy access to flour — it’s just in 50-pound bags. With people eating at restaurants less and ordering from grocery stores more, it can be difficult to pivot the food supply accordingly. Grocery stores can’t stock 50-pound bags of flour onto their shelves. A restaurant, on the other hand, can be flexible and fill up a Ziploc bag for customers.

Many of the restaurants-turned-grocery stores are offering “contact-free” service in which customers place orders by phone or online and the goods are delivered straight to the trunk or backseat of the car. Others are preparing boxes of produce for pickup at specific times or urging customers to call in and see what kinds of dry goods and produce might be available.

Who Is in on It?

Across the US, several large chains have started selling grocery items, which vary greatly depending on the restaurant. Some offer mostly the types of things already in their pantries, such as meats, vegetables, fruit, cheese, milk and eggs. One chain that hopped on the trend is Subway, which is selling groceries at 250 of its stores in California, Connecticut, Oregon, Tennessee and Washington. Potbelly Sandwich Shop franchises launched Potbelly Pantry, offering mostly foods that the chain uses to make its sandwiches, such as meat, cheese and bread.

Panera Bread is also expanding into groceries, selling items like bagels, bread, gallons of milk, yogurt and fresh produce. “From limited choices on grocery shelves to the growing need to limit the number of trips outside of the home, it is an incredibly stressful time when it comes to putting wholesome food on the table,” said Niren Chaudhary, Panera CEO, in a statement, adding that Panera Grocery can help “provide better access to essential items that are increasingly harder to come by.”

As fears surrounding coronavirus transmission in grocery stores mount, bespoke grocery locations have become popular attractions as well. In Toronto, Canada, a handful of restaurateurs have turned their businesses into bodegas selling basic groceries. Others now offer food subscription boxes or DIY meal kits.

Buca, a Toronto-based chain of Italian restaurants, is allowing customers to recreate the restaurant experience at home with an order of fresh pasta and sauce or pizza dough for a DIY pie kit. Veteran pizza maker David Mattachioni has turned his Junction Triangle restaurant into a market. Shoppers can still get his wood-fired pies to go, but can also grab some milk, butter, tomatoes, cheese, olive oil, house-made sourdough or focaccia and wine.

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The Local Public Eatery has temporarily relaunched both of its locations as the Local Corner Store, a virtual supermarket where customers can order the bar’s pub grub but also fruits and vegetables, basic pantry items including sriracha, as well as toilet paper and booze. Similarly, Joey Restaurants launched The Joey Market, a “one-stop-shop” for grocery essentials and specialized meal kits.

The New Normal – For Now

While restaurants that remain open are rapidly shifting their business models to stay afloat, it remains to be seen whether this shift will endure post-pandemic. Some restaurant operators aren’t sure if grocery sales will continue, with Panera seeing it as a “kind of a tipping point to see what our customers need.” The future is especially difficult to predict during this unprecedented time, but for now, this is the new normal.