Restaurant Business Strategies to Stay Afloat Through COVID-19 Crisis
08 Apr 2020 By: Natalya Bucuy
Updated: 19 Jun 2020
It is in crisis that we get to know ourselves more than ever.
The COVID-19 pandemic has made the world rethink its habits, and quickly. People are now forced to stay inside, avoid, public places and change their routines.The coronavirus outbreak altered the way people work, play, and, importantly, the way they eat.
As it turns out, American are used to eating out. A lot.
According to a 2019 report, on average, Americans ate out almost six times a week. Between lunch bites at work, weekend brunches, and birthday dinners, dining out accounted for many meals away from home.
Those meals also accounted for a multibillion dollar restaurant industry. (In 2019 restaurant sales reached record sales of $863 billion, according to a restaurant industry report.) Then, COVID-19 swept the globe, everything changed, and restaurant business came to a halt.
Emerging trends will guide restaurant business strategies.
With restaurants across the nation closed or only open for take out, American eating habits are showing the largest behavioral shift.
According to the latest edition of PYMNTS’ COVID-19 brief series, the share of consumers dining at sit-down restaurants had declined 85.2 % since the pandemic began, dropping 52.3 % in 11 days. And the same data set notes that traffic isn’t merely shifted to take-out — only 16 % reported they were ordering in more to replace eating out. (Pymnts.com)
Experts predict that the declining trend will continue. A recent survey by Technomic showed that 32 % of adults said they plan to eat at restaurants less often due to COVID-19 concerns even after the quarantine lifts.
In light of the current situation, Daphne Ewing-Chow of Forbes makes five predictions about American eating habits. Based on current consumer behaviors, she predicts changes in how Americans eat, what they eat, and where they eat.
- Home cooking will reemerge
- Healthier eating and organic eating will gain popularity
- Food safety guidelines will become stricter
- Exotic food items will be in less demand
- Eating local will gain even more popularity
It’s difficult to say which of these predictions will definitely occur. However, it’s clear that no matter what happens, change is here to stay. Entrepreneurs will need to review their practices and rethink their restaurant business strategies, both during the quarantine and after.
Here are three restaurant business strategies that might help in these trying times.
Restaurant business strategies to stay afloat during and after the pandemic.
1. Rethink services and menus
Some restaurants made the decision to stay open for take out services during the pandemic. Others chose to close until better times. All had to adapt and adjust to the current situation.
Restaurants that chose to remain open faced challenges such as reduced staff and lack of access to usual vendors. Some places that never offered delivery now switched to that option. Depending on the type of food a restaurant serves, some options might not hold up well for take out or delivery. Therefore, rethinking the menu could be one of the restaurant business strategies that could help.
Offering fewer items, cooking and packaging them differently, and offering additional services could be some useful options.
Think outside the (pizza-delivery) box!
Pizza places now offer pizza kits that include the dough, the sauce, and the toppings separately. Customers not only get the freshest pizza possible, but also get to have some family fun making the pizza.
Middlebury Pizzeria has new take out item, ‘Mini Pizza Kits’ for kids, to build/make them at home, ‘Rulli’s Pizza, has no dine in service, because of pandemic, looking to increase revenue, so far has sold over 600, at 3 locations#6/10p pic.twitter.com/LjveqlsC4z
— Ed Ernstes WSBT (@edernstes1) March 24, 2020
Similarly, this strategy could focus on food items other than pizza. Meal kits services such as Hello Fresh and Blue Apron have been around for some time. During the quarantine they seem to be gaining popularity. After all, some people are not very confident in their home cooking skills.
What was once a perk of the direct-to-consumer lifestyle has become a lifeline for those avoiding grocery stores, and a chance to learn a new recipe or practice an old skill in the kitchen. “We believe home cooking is an opportunity to find some comfort and joy in this rather uncertain time,” a representative for Blue Apron tells Eater. (Eater)
Partially cooking the ingredients and delivering them to customers’ doorsteps with further instructions could also be a great strategy. Busy families with limited cooking skills might find the meal prep and delivery services quite helpful.
Using technology for better customer experience
Customers love technology. It comes as no surprise that 89% of people have their smartphone on them at all times. And most of those people would rather text than place a phone call. In fact, over 68% of consumers said they text more than they talk on their smartphones (Paldesk)
Now, it only makes sense for business owners to implement texting as one of their restaurant business strategies. Allow customers to text in their pick-up or delivery order. It’s easy, convenient, and does not require them to get off their video conference work call or put the screaming toddler down first.
Implementing SMS service on a website can go a long way. After the quarantine is over customers can also use the SMS service to make reservations. Social media integration is another helpful feature as it allows customers to contact a restaurant right through their social media app.
SMS implementation can also serve as a great marketing tool. Given a customer subscribes, a business can text special offers and discounts, updates on closures and opening, and otherwise engaging information. (Textrequest)
QR Codes can be another great tool that can improve customer experience during the pandemic and beyond. The technology can provide customers with a scanable QR code that leads to a form or a website with the menu. Furthermore, a restaurant can assign a QR Code for each menu item. All a diner needs to do then is to scan the code to place an order. Regardless of the extent a restaurant uses the QR codes, the technology can promote contactless menus and virtual orders. Crucial and safe during the pandemic, the practices can continue after the crisis for the sake of convenience.
Advertising the new restaurant business strategies might also attract more customers
Changing things in accordance to current demand might help save a restaurant that otherwise might be forced to close. Marketing the changes is one of the most important restaurant business strategies.
For example, upscale establishments that previously operated as dine-in services only, now might reserve to fine-dining take out. Stuck at home working and homeschooling children, parents might be more likely to opt for take-out advertised as “date-night essential.” After all, a perfectly cooked gourmet meal could serve like a perfect treat and a stress reliever.
Offering vegetarian and vegan options can attract new customers. Additionally, stressing the importance of safe food prep in the facilities can ease people’s fears about possible contamination. Promoting local vendors could also be useful as people will want to support businesses in their own communities.
Providing incentives, discounts, and causes for people to support could also help. If a restaurant donates parts of its proceeds to those in need, such a practice could motivate people to come in, get take out, or purchase a gift card for future use.
These restaurant business strategies could go a long way because they would satisfy the new demands people have during the pandemic. Advertising all these features could attract more customers and, ultimately, save a restaurant.
2. Stay engaged and relevant
During the pandemic, with social distancing and isolation guidelines in place, it is easy to feel hopeless. Even with limited operations, restaurants can find themselves just not making enough profit to stay afloat.
It’s important not to fall into despair.
Before the pandemic, restaurants and bars served as epicenters of leisure. In small towns especially, local eateries attracted and united communities. While times are hard for everyone, it is important for restaurants to stay relevant in their locales. Even with the threat of closure, owners should direct their restaurant business strategies towards their communities.
Helping local agencies and first responders, if possible, if not just good for business, it’s the right thing to do. Eateries across the nation have been offering free meals to essential personnel in their communities. When the pandemic subsides, people in the community will remember those who didn’t disappear, but stayed and helped.
If remaining open, restaurants owners should patron local vendors, shop local,and promote their neighboring business. If delivering alcohol is one of the new restaurant business strategies, using a local supplier could be a viable and mutually beneficial option.
Social media is a great communication tool in tough times.
Additionally, posting on social media is a great way to stay active. “After all, it’s free and it keeps a restaurant’s name on everyone’s minds,” said Shane Ogletree, a front-of-house manager at Vala Restaurant in Doylestown, PA. “It will help a restaurant stay relative now.”
Engaging with communities is key. So crafting interesting, interactive, and entertaining posts that will attract people’s attention could be another one of restaurant business strategies to try.
Check out these awesome social media marketing examples from Toast.
I hope this email finds every one well & safe. More behind the scene pictures of our new “take out” restaurant!
Taking orders for today and Thursday.
View daily updates and menus on our website!https://t.co/qP8qCoZJSK
Thank you for your continued support and kindness,
— La Panetiere (@LaPanetiere) March 25, 2020
3. Look for resources
One important thing to remember is that everyone is hurting financially right now. What comes now and in upcoming weeks, months, and possible years, will be an adjustment.
Thankfully, various private and government agencies are offering help. Small businesses especially have some options in terms of resources. Explore as many avenues of alternative help, loans, and grants as possible.
Check out resources available to small businesses during the pandemic.
Following additional stimulus measures the government might continue to implement might open new avenues for income to restaurants.
Recently, President Donald Trump called on Congress to restore business ability to restore the full tax deduction for meals and entertainment. The measure, he argued, would give employers and incentive to order restaurant food for their employees. Congress eliminated corporate entertainment tax deduction and only allowed a 50% deduction on meals as part of the 2017 tax reform. (Reuters)
These are unprecedented times. In order to survive, entrepreneurs will have to rethink their restaurant business strategies. Changing their services, staying relevant, and looking at all the resources available might just allow restaurants to live to see another day in the new landscape of the post-pandemic world.