RESTAURANTS

Hurry, Dinner's Getting Cold

There’s no way to gloss over the devastation Covid-19 brought to food service retail. 110,000 restaurants have permanently closed this year, and 10,000 of those closures occurred over the past three months, according to new National Restaurant Association data. 

For the sit-down restaurants that remain, there’s a balancing act of managing ongoing Covid-19 concerns and shifting, retightening state restrictions on indoor dining.

Seeking solutions

“Outdoor” dining: What started as the occasional heat lamp has warped into cabanas, tents, and yurts. Diners may be enticed to book a reservation, but they’re not perfect fixes.

• Enclosed sidewalk dining eliminates the airflow epidemiologists suggest for a safe experience.
• Winterizing outdoor dining also requires more 1) space and 2) cash than many struggling restaurants can afford. 

Overnight stays: Bloomberg reports that a handful of restaurants are setting up shop in empty hotel rooms for private, small group dining. 

• One restaurant owner trying this model said diners are willing to pay slightly more than a typical meal for the extra experience.
• Some are allowing diners to bundle their dinners with an overnight stay.

Creative, but...

All that ingenuity isn’t a substitute for federal aid, according to many industry analysts. Talks for a new business relief package are ongoing, but more restaurants will likely shutter before it’s approved. According to National Restaurant Association data, 83% of restaurant owners expect sales to get “even worse” over the next three months.

Without a new plan...the estimated $39 billion that evaporated from the restaurant industry with business closures creates opportunities primarily for mass chains. 

• They know it: Starbucks CEO Kevin Johnson already said its coffee shops will become “destination No. 1 for community" once a vaccine is available. 

But those businesses say they want to keep indie coffee and takeout alive. Starbucks and McDonald’s are among the nationwide chains requesting additional government aid for restaurants.

Zoom out: As neighborhood establishments disappear, so do many middle-class jobs.

M&A

Can’t See the Dealmakers

EssilorLuxottica, the lenscrafter behind Ray-Ban, Oakley, and 30+ other glasses brands, reportedly could abandon its $8.8 billion acquisition of eyewear retailer GrandVision.  

How we got here: EssilorLuxottica first revealed plans to buy the majority stake in GrandVision in summer 2019, or twenty light years ago, to expand its global footprint. The two stopped seeing eye to eye in July 2020, when EssilorLuxottica demanded court intervention to gain more intel on its target’s Covid-19 plans. 

• GrandVision’s 7,000+ stores across 40+ countries were attractive when they weren’t subjected to unpredictable and costly pandemic closures.
• Meanwhile, EssilorLuxottica’s online sales have risen a record 40% this year—reducing its interest in purchasing a smaller, IRL-heavy brand.

Looking ahead...sources told Bloomberg there’s still a possibility EssilorLuxottica could pull an LVMH and renegotiate for a lower acquisition price.

Another lens: Emerging tech has made Wayfarers even easier to purchase online. And EssilorLuxottica is in the early stages of a Facebook partnership, which could create 1) more interactive purchase journeys and 2) more paperwork for the FTC.

SPONSORED BY ITERABLE

How Do You Connect With Customers?

Drawing a blank? We thought so. That’s why we’ve teamed up with the growth marketers at Iterable to help you build long-term, meaningful relationships with your customers. 

In our article, we hit all the major points—personalization, data, and individualization—that can mean the difference between a one-and-done transaction and a fan for life. 

While a bunch of advice is always great, we’ve made sure to give you actionable tips that you can start implementing pretty much immediately.

And since Iterable was there to help us with said actionable tips, you can be sure they’re some of the best nuggets of retail wisdom around. 

So take a look at our article about creating and retaining retail relationships, executed with Iterable, right here.

RESALE

Do Logos Speak Louder Than Words?

Secondhand shopping has been almost as productive as Taylor Swift in 2020, with resale platforms planning to IPO (thredUP, Poshmark) and others securing new funding (Vestiaire Collective, Rebag). Still, thredUP thinks secondhand needs destigmatizing.

Its solution? A shared logo for thrifted items. It’s a patch sewn with the word “Thrifted” over a teal hanger, made in a collaboration with designer Christian Siriano.

• Shoppers and other resale outlets can order the patches from thredUP.
• Select items from Everlane, J.Crew, Lacoste, and more already have the patch applied on thredUP’s site in a limited-time store. In some cases, the thredUP patch covers their original logo.

ThredUP execs told reporters the logo is meant to help shoppers share their commitment to sustainable shopping. In an internal survey, two-thirds of shoppers said they’re “proud” to shop secondhand. 

• But positive polling ≠ willingness to wear a virtue badge. Shoppers may think choosing used clothing is enough without extra signaling.

Another angle: In spite of a growing trend toward brand approved resale, some retailers could see shared imagery on their items as a value-diminisher. 

+ While we’re here: Resellers have turned to sites like thredUP and Poshmark for extra cash. But there’s a chance that platforms oversold on promises of secondhand income, Wired reports. 

WHAT ELSE IS BREWING

• Lululemon attributed 42.8% of Q3 revenue to its direct sales channels.
• Designer Brands, formerly DSW, could close up to 80 stores.
• Home Depot is adding home decor and furniture to its website. 
• Instagram expanded its shopping tools to Reels.
• CVS has allocated at least 10,000 health care officials to administer vaccines.

SPONSORED BY SALSIFY

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SWAPPING SKUS

This week in my favorite snacks: Welch’s fruit, Robinhood, and the reads below. 

• How ’90s nostalgia conquered the grocery store. (InsideHook) 
• First regenerative farming came for your closet. Now it’s headed for your pantry. (Fast Company)
• Costco, Trader Joe’s, and Stew Leonard’s weigh in on the future of the free sample. (Today) 

FRIEND OR FAUX?

Three stories are true; one was made at the same factory as my Christmas tree. Can you ID the made-up story? 

1. TikTok influencer finds out she has Covid-19 while filming a Starbucks taste test.
2. Ohio small business owner sues Chick-fil-A branch for obtrusive drive-thru lines.
3. Disney hides e-commerce discount codes in The Mandalorian season finale. 
4. Microsoft pivots to apparel with a branded line of ugly holiday sweaters.

Keep reading for the answer.

ICYMI

Catch up on the Retail Brew stories you may have missed.

• How Reformation Plans to Become ‘Climate Positive’
• Unilever Wants In On the Nostalgic Fragrance Trend
• Quip Thinks Chewing Gum Needed Disrupting

FRIEND OR FAUX? ANSWER

3. No, Disney isn’t embedding discounts in its content.