Restaurant Roundup: Restaurants Feel the Impact of Omicron; Brands Launch New Loyalty Apps

Restaurants may be more prepared for social distancing measures and contagion concerns than they were in, say, February 2020, but the mass outbreak of the omicron variant of COVID-19 has still had a major impact on many.

The National Restaurant Association announced Monday (Jan. 24) that it sent a letter to the United States Congress asking for new funds to replenish the Restaurant Revitalization Fund, which poured $28.6 billion into the industry in 2021.

“The restaurant industry is at an inflection point and we need your leadership now more than ever,” Sean Kennedy, the association’s executive vice president of Public Affairs, wrote in the letter. “…Forced to adapt to deteriorating consumer confidence [because of omicron], restaurants reduced hours/days of operation, cut seating capacity and shut down, pivoting to off-premises dining with the result being lower sales volumes in 2021 than in 2019.”

Restaurants’ digital relationships with their customers are necessary to help them make it through this difficult period, with new COVID-19 case numbers about twice what they were a year ago.

“Digital engagement mechanisms to keep close to the guests are paramount,” Andrew Robbins, CEO of Paytronix, told PYMNTS’ Karen Webster in an interview. “So, a strong loyalty CRM program, online ordering, those are the twin pillars of a good strategy. And we see this every single time there’s a downturn.”

Read more: Restaurants Lean on Loyal Customers to Navigate Omicron, Inflation Impact

Restaurants Launch New Loyalty Apps

As restaurants continue to seek out ways to win customers’ loyalty for their direct ordering channels, smaller brands are taking note of major players’ success with restaurant loyalty. This week, as McDonald’s announced the near-instant success of its loyalty program, smaller chains made their own moves in the space.

See more: McDonald’s Leverages Loyalty Personalization to Combat Aggregators

Fast-casual chain Rōti, for instance, which has 25 locations across four states and Washington D.C., announced in a Monday press release the launch of its new loyalty app, promising consumers a $10 credit for downloading it.

“Our goal is to make Rōti as accessible as possible, and the new App is literally able to put our food at everyone’s fingertips while also rewarding our customers by paying them to download it!” Roti Vice President of Marketing and Brand Nico Nieto said in the release.

Meanwhile, Dallas, Texas-based Tex-Mex chain On the Border, which has more than 130 locations, told Restaurant Dive that it will launch its new loyalty app Wednesday (Feb. 2). The brand’s existing program has already seen some success.

“We’ve started to really see, based on their transactional data, a lot of new people and a lot of light users come on,” Chief Marketing Officer Edithann Ramey told the outlet. “That’s when it starts to really [yield a return on investment].”

Loyalty programs are far and away the top feature that consumers say would encourage them to make restaurant purchases, according to data from this month’s edition of the Digital Divide Report, “Digital Divide: Minding The Loyalty Gap,” a PYMNTS and Paytronix collaboration, which featured a survey of more than 2,400 U.S. adults about their restaurant habits. The ability to earn loyalty rewards even ranked well above such in-demand features as online ordering ability and drive-thru pickup.

Read the report: Minding The Loyalty Gap

Reef’s Alleged Violations Continue to Mount With New Lawsuit

Not two months after ghost kitchen company Reef came under fire for health and safety violations (including sewage spills) found by the Florida Department of Business and Professional Regulation, among other alleged infractions in other areas, the company is once again in hot, contaminated water.

Airport restaurant operator OTG Management filed a lawsuit Monday against the company, Restaurant Business reported Wednesday (Jan. 26), accusing Reef of “systemically poach[ing]” six of OTG’s senior managers to compete with the airport restaurant operator.

See also: Ghost Kitchen Boom May Be Built on a Shaky Foundation, Reports Show

“The Reef Defendants pilfered OTG’s ranks with the intention of deploying the former OTG employees for the purpose of assisting the Reef Defendants’ expansion into airports,” the filing stated.

Lunchbox Launches Ghost Kitchen Marketplace

While some experts in the restaurant industry speculate about whether the ghost kitchen boom will prove sustainable, given all of the issues, others are going all in on this virtual model. Digital ordering solution provider Lunchbox announced in a Tuesday (Jan. 25) press release a partnership with virtual restaurant company Virturant to create a new marketplace app, Ghost Eats, set to launch next quarter, which will allow consumers to order from multiple virtual brands at a time.

“We’re thrilled to partner with Lunchbox and their suite of world-class products built specifically for virtual restaurants and ghost kitchens,” Virturant Chief Revenue Officer Robert Young said in the release. “Our new Ghost Eats marketplace will give hungry diners access to a wider variety of cuisines and virtual brands to choose from in a single order.”