Dive Brief:
- Chipotle is providing hourly workers with a 10% pay increase through April 12, according to Nation’s Restaurant News. The bump is referred to as appreciation pay to reward employees for working during the novel coronavirus crisis.
- The chain is also offering an emergency paid sick leave program for employees directly impacted by COVID-19. Employees can receive pay equal to their upcoming two-week schedule or average hours worked, whichever is greater.
- Like many other restaurants, Chipotle has shifted to an off-premise only model offering takeout, mobile orders, pickup, and delivery.
Dive Insight:
As the restaurant industry braces for a devastating blow to profit margins, some brands are making an effort to keep employees working amid COVID-19’s impact. Offering pay raises during a time when profits may take a hit, however, is likely a tall order for most brands. Chipotle’s nationwide footprint may help it absorb some of the costs. It’s also put a few other measures in place to keep consumers engaged and generate profits, like offering Zoom hangouts with celebrities.
Chipotle may be banking on the idea that consumers will remember the brand’s goodwill and return it in kind when COVID-19 resolves and diners can return to stores as usual. So far, consumers seem eager to learn what brands are doing in response to the pandemic, according to 4A’s Research. The firm recently conducted a survey determining that 56% of consumers are pleased to hear about brands taking actions like donating goods and services, while many believe it is important to offer paid time off to employees who are unable to work due to closures.
Other chains taking steps to protect employees include Starbucks, which provided a $3 per hour pay boost for store-level employees during the period between March 21 and April 19. &pizza has also decided that the best approach to dealing with COVID-19 is to pay workers more, not less. The D.C.-based chain is raising hourly pay $1 and is exploring other measures to keep stores fully staffed. It’s also moved 35 of its 50 corporate staff employees to restaurants where they are helping to prepare food and fill orders, including the CEO.
Some brands have taken alternative approaches, however. Burger King’s biggest franchisee recently announced that it would cut pay 10% but changed gears the next day, announcing that CEO Dan Accordino would instead forgo his salary for three months and that customer-facing worker pay would remain the same. Diners are keenly aware of how brands are reacting to the impact of COVID-19 and could lose interest in companies whose practices fail to meet their expectations.
