Restaurants are in a scary and uncertain place. As states reopen, restaurants must deal with rehiring staff, redesigning floor plans to comply with social distancing, and battling customer hesitation dine-in again. According to the Texas Restaurant Association, half of the restaurants in Texas are hesitant to reopen. Since Georgia's push to reopen in late April, customers did not flood back to eateries at the expected rate. Many cite that even though they miss being outside, some are prepared to practice social distancing at home until October. Atlanta-based Bad Axe saw the impact, only having two customers the entire first weekend they were open.
The pandemic has fiscally walloped restaurants across the industry. Some may be thinking along the lines of Tiger King's Joe Exotic, that you're "never going to financially recover from this." We have some tips to help as you pivot from these challenging economic times.
The State of the Economy
"We anticipate the worst economic fallout since the Great Depression," says Kristalina Georgieva, managing director of the International Monetary Fund. The economic outlook post-pandemic is bleak. We've rounded up some statistics to help paint a more accurate picture of the current state of the United States economy. While the stats might seem disheartening, it's essential to work with real figures. By finding the actual margins you're working with, you can not only remove some of the uncertainty but also make real improvements.
- We're experiencing the highest unemployment rate recorded since the Great Depression. The unemployment rate was 14.7 percent in April 2020.
- Leisure and hospitality industries recorded 7.7 million lost jobs as of April.
- The gig economy is predicted to suffer the most, at least until a vaccine is widely available.
- Lyft and Uber reported that rides decreased 80 percent at the end of April, while Airbnb cut 25 percent of its employees recently.
There is hope for a strong return in 2020 Q3, similar to the recovery in Asia during the SARS outbreak in 2003, with additional caution that this pandemic is unprecedented; therefore, economic recovery will take a while.
When It Comes to Your Customers
It's no surprise that customers are nervous about returning to any establishments. Even with social distancing and cleaning measures in place, news sound bites warning of second waves of COVID-19, the rapid spread rate of the virus in reopened states, and no sign of a vaccine soon, customers are keen to stay home through October, even though they miss their old lives.
It comes down to how long the pandemic physically lasts that determines how long its associated fear will stay in the minds of the consumer. There's been a shift to online shopping. In March, e-commerce saw a 14 percent increase. When a customer feels safe to patronize businesses again, they want brands to recognize that humans want to feel connected and be adaptable. Restaurants can accomplish this connection with story-oriented messaging by demonstrating their generosity, according to consumer psychologist Kit Yarrow. Companies need to shift from "being of service without being self-serving," said Yarrow.
Actionable Steps and Tips
Invest in technology across the board
Restaurants have been exploring implementing technology to help shift to an off-premise strategy. As restaurants prepare to reopen, they should put serious thought into any form of technology that allows customers to have a primarily contactless experience; cleanliness will be a priority for consumers post-quarantine. Eighty-seven percent of consumers would prefer to patronize businesses "with touchless or robust self-checkout options." Pay-at-the-table kiosks, QR codes, digital menu boards, and automated drink dispensers may be in your restaurant's future to attract customers post-pandemic.
Communicate and Embody Cleanliness
Your cleaning process should be posted all over the restaurant, and you should take action to embody that. Do your customers see your staff disinfecting menus in between parties? Is hand sanitizer readily available? Whether you utilize an illustrated poster with associated pictures, you post signs on the door or outline your social media processes. As a brand, you want to ensure your customers feel safe at your restaurant. Keep this in mind; you don't want to be the restaurant where someone was infected with the coronavirus. Ensure your customers will have a safe restaurant experience once they venture out again.
Consider Your Expenses
Consider your staffing needs as things reopen. Since shifting to off-premise options, what will your staff look like once the dining room reopens? The capacity of your restaurant will change, so how will you section out your staff? Your floor plan looks different, so how will that affect shift schedules? Does that mean less staff or more opportunities to work extra shifts? Consider any changes to your menu; will it be trimmed, overhauled, or stay the same?
Another side of your expenses will need to be marketing. Communicate with your customers. Keep them in the know and let them know what's going on. Share new processes, whether with reservations and call-ahead seating, updated cleaning protocols, employee checks before shifts, and any other business changes. Now more than ever, it's essential to keep in touch with your customers.
Continue to Explore Other Revenue Options
For any time, it’s best to have several plans in place. In times of crisis (like this one), it’s a good idea to make sure your restaurant has other ways to generate revenue and stay afloat. How else can your restaurant make money? These are a few ideas to explore:
Gift cards – your customer pays the money for the gift card upfront and guarantees a return visit to spend the gift card at your establishment.
Grocery options – does your restaurant have the capability to offer grab-and-go items and shift into the grocery segment?
Continuing off-premise options and expanding on those strategies – if delivery and takeout are already part of your restaurant’s business plan, how can you broaden those efforts? Can the restaurant add alcohol delivery to orders? Will you use a third-party delivery service to reach your customers? Don’t forget to attract customers to these options with deals!
Restaurant swag – you can sell your brand; if you have merchandise with your restaurant's logo, it can serve as another avenue of income.
On a Positive Note
There's not a question of if customers will return to patronize businesses in their states, only when. Your restaurant shouldn't focus solely on making sales, but communicating with your customers to ensure that they have a safe environment to visit. As things slowly reopen, continue to explore other revenue options, expand off-premise strategies, and stay in communication concerning everything that is going on with your business. As with anything, the only way to the other side is to go through it.