The Impact of the COVID-19 Pandemic on Restaurant Resilience: Lessons, Generalizations, and Ideas for Future Research

Abstract

Pandemics cause business disruptions that have serious implications for the design and delivery of services, leading to adverse performance consequences for services industries. Focusing on the restaurant industry, the authors present a conceptual framework of restaurants’ resilience during a pandemic that is grounded in existing services and strategy research, secondary and qualitative sources, and insights obtained from social media data. This framework is tested via an empirical analysis of the Yelp COVID-19 data set. Several interesting trends in consumer preferences are identified including a rapid shift toward third-party app delivery models. Surprisingly, the analysis shows that partnering with third-party app delivery services before COVID improved firms’ resilience, whereas during the pandemic, these partnerships have a negative impact on restaurant survival. Furthermore, the study documents some important differences between the drivers of restaurant survival before versus during the pandemic, highlighting critical changes in consumer preferences that may shape the industry in the future.