How Restaurants are thriving through the COVID pandemic?
The coronavirus pandemic has wreaked untold havoc in the restaurant industry. The alarming contagiousness of the virus has made any gathering a high-risk event. Also more lockdowns in communities -- aimed at suppressing the spread of the virus – have effectively forced many restaurants into shutting operations or downscaling.
In the case of the United States, before the COVID outbreak, the American restaurant industry was flourishing and employed no less than 15.6 million people. The pandemic provoked massive layoffs with over a million restaurants forced to shut down or pivot their operations.
Projections from the National Restaurant Association show that the American restaurant industry could lose a whopping $225 billion due to the pandemic. This goes further to show that an estimated 5-7 million people working in the restaurant industry could be laid off by June.
The effect of the pandemic isn't exclusive to the United States alone. Undoubtedly, it is global with restaurants over the world affected one way or another.
Since March 1st, 80% of restaurants have been forced to lay off at least one employee in Canada. Approximately 10% of restaurants in Canada have closed shut down operations, and another 18% would shut down too in the next four weeks if extant conditions (triggered by the pandemic) prevail.
As the devastating crisis rages, it is inspiring that some restaurants are managing to survive and even thriving relatively. In this case study, we will examine the specific recourses or pivots these surviving restaurants have adopted.
Restaurants are resorting to takeaway dining and delivery services
With sit-in dining sessions and crowded restaurants becoming increasingly unlikely, many restaurants are diversifying into takeaway dining packages, which are ordered (say online) and delivered directly to the recipient.
Takeaway dining is an exquisite resort that doesn't only decongest the restaurant, it also allows restaurants to engage customers who are unwilling to come out to dine due to health concerns. Restaurants now create family versions of your meals for people to enjoy back home.
Take the case of Canlis restaurant in Seattle, Washington. The pandemic forced them to close their traditional fine-dining restaurant. But rather than entirely shut down, they reinvented their services and now manage a pop-up burger drive-through strategically located in its parking lot.
Many restaurants are taking up the option of home food delivery. Deliveroo, which is a well-known food delivery service, recorded 3,000 signups from restaurants for March alone in the United Kingdom.
Deliveroo particularly has pointed out increased orders from families on weekends like Saturday and Friday nights, with the majority of the food delivered being burgers, fish and chips, and pizza.
Equally, Just Eat, a reputable rival to Deliveroo has recorded 3,000 takeaways signups since the lockdown was initiated, with a 36% spikes in orders from customers for desserts.
Managements of restaurants are assuring customers of their safety
While no vaccine has been officially licensed, maintaining strict hygiene protocols go a long way in containing the spread of the virus. Surviving restaurants are putting a core focus on their sanitary conditions and, most importantly, ensuring customers see the enormous efforts they are making to keep the place clean and safe.
Restaurants are massively leveraging disinfectants in keeping their halls clean. These disinfectants are effective in combating the virus – particularly in disintegrating it – since the coronavirus itself is has an oily membrane coat. Cleaning is periodic and carried out several times through the dining day. There is also incorporating social distancing for customers coming in and those standing out.
These restaurants are giving priority (regarding disinfection) to relatively public spots in their halls like doors, air circulation devices, and light switches. Some go as far as furnishing their team with antibacterial gloves, especially those handling cash, although many restaurants have gone cashless to avoid this.
While doing this, the thriving restaurants are campaigning to their customers about the safety and high hygienic conditions of their restaurants. This can be done via social media, email newsletters, and takeaway coupons.
With the fear (instigated by the virus) proliferating communities, promoting your restaurant as a safe and clean refuge for them will go a long way in restoring your customers' faith in coming to your restaurants.
Take the case of Erin Wade running Homeroom, her mac and cheese restaurant in Oakland. Wade is putting so much energy in promoting the sanitary and safety consciousness of her restaurants and ensuring customers see they are making an effort to keep them safe when they come to dine at Homeroom.
With the measures Wade is adopting, customers don't wait in the interior of the restaurant anymore. This time, they have to wait outside and essentially maintain a social distancing protocol of six feet apart.
Going further, Wade and her team have pulled down the markers even as far as the sidewalk. This is to ensure that customers are well aware of the advocated standing arrangements and social distancing themselves.
Additionally, Wade ensures her staff is adequately supplied with gloves and masks. They always sanitize surfaces and deep clean the restaurant interior space at least two times a day. Wade went as far as procuring thermometers to take their customers' temperatures before they come inside the restaurant.
Restaurants are converting to grocery stores
With many communities still observing lockdowns and government-enforced stay-at-home orders, restaurants are quickly transforming into grocery stores. This is becoming rampant from small eateries to large chain restaurants.
This shift to grocery business has been speedy. While businesses ideally would spend time in analysis when pivoting, cutting through research and market surveys, restaurant managers have seemingly not had time for such executive luxuries. They have simply dived into the grocery market, fired on by the desperateness to survive the pandemic.
This zest is understandable since grocery items are selling enormously, given that many families have resorted to cooking at home. Most of these restaurants now sell hotcake groceries like vegetables, eggs, cheese, meat, fruit, and milk.
Anthony Strong is one of the restaurant owners pivoting to grocery business. Before the pandemic, Anthony's had a fine dining room called Prairie in San Francisco that focused on family-style meals.
Social distancing and customers staying at home critically affected his business, so he had to swap from a typical restaurant to a grocery store. So far, he has been enjoying the sales.
"We're blowing through product," Anthony enthuses. "It's been amazing to see people from the neighborhood that we knew as diners coming in," he added. "They used to geek out on dishes off of our charcoal grills, and now they're geeking out on the fact that we have the only stocked pasta shelves in the city."
Restaurants are sustaining revenues with gift cards
Restaurants are leveraging gift cards to keep revenue running in. These gift cards are sort of informal microloans for these restaurants.
With these gift cards, customers can pay for meals they would come and enjoy at a later date – possibly when the pandemic has reasonably died down. These gift vouchers can be valid for the next 15-18 months.
This gift card system is a win-win for restaurants and their customers. While these gift cards ensure that the cash flow of these restaurants doesn't run dry (therefore alleviating the financial impact of the crisis), it also helps the customers to amply plan their entertainment after the pandemic. Most of these customers don't have a problem buying these gift cards as they would love to keep their favorite restaurants alive.
There is the case of Stella Taco, a restaurant in Portland, who has been selling gift cards to their customers and effortfully promoting them via social media.
Similarly, Claro, a contemporary Mexican restaurant in New York, has given its customers the opportunity of going online and buying gift cards as an online gifting option for their friends and family.
Also, make your gift cards more visible in-store. For restaurants still physically open for takeout orders or dining, they can amplify the visibility of their gift card programs via catchy in-store signage. The enchanting edge of this signage (as typified by the glamorousness of the graphics) would pull people more towards these gift cards, promoting their program.
Not every restaurant would entertain the luxury of creating bewitching in-store signage. Others can simply use bill notices with minimalistic design (or just simple words) pasted at strategic locations of the restaurant that enjoy high traffic like the door.
Restaurants are resorting to government support
Governments across the world are stepping up financially to revitalize small businesses like restaurants. A number of fiscal bills have been passed to assist these businesses to bootstrap these restaurants back to financial health.
The U.S. government is requesting an economic relief package in the tune of $1 trillion to boost businesses. Of this chunk, about $300 billion would be dedicated to small businesses like restaurants.
A window of opportunity is opening up to defer payments businesses owe the IRS. It is advocated that big companies could be allowed to defer $10 million while smaller single-owner businesses like restaurants could be allowed to defer $ 1million.
Steven Mnuchin, secretary of the U.S. Treasury Department, is among the fierce supporters of government grants for restaurants. He advocates that stay-at-home lockdown orders effectively kill restaurants and other small businesses; hence, the deliberate effort for the government to come to their rescue.
"We've told people 'don't go to restaurants.' Steven admonished. We want to make sure those businesses have money to pay their employees."
In all, these are real-life mechanisms restaurants are leveraging to thrive in the face of the scorching pandemic. There are also other options like maximizing stimulus funding like the PPP (Paycheck Protection Program) small business loan stimulus package for restaurants.