COVID-19: How Restaurants Can Adapt to the Changing Marketplace 

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Restaurant Strategies for Business Continuity

By James Bailey

Now that restaurants are settling into a new normal of delivery and takeout only, operators and managers must stay positive and continue looking ahead. Prior to the coronavirus outbreak, few full-service restaurant managers thought about big strategies for shifting operations to carryout and delivery. Now, it’s a necessity. The coronavirus has put every restaurant in an unpredictable and unpleasant situation.

Nationally, here’s what’s going on:

  • A drop of almost 50% in nationwide sales for the month of March
  • 3% of restaurants have permanently closed and another 11% say it’s a possibility soon
  • 44% have temporarily closed
  • 70% have laid off employees and/or reduced work hours, with more cutbacks expected

Keep the Lights On

One of the best things you can do right now is communicate. Whatever you do to communicate with customers, keep the messages as positive as possible and focused on them – perhaps you can find new ways to engage with them during this time.

Have you done any – or all – of these communication strategies?

  • Keep talking to your customers. Let them know if you’re open for carryout or delivery and how they can order.
  • Emphasize safety protocol you’re following now, in addition to safety measures you were already taking.
  • Designate a point person for all customer communications.
  • Hang a banner or sign outside of your restaurant letting people know you’re open for takeout.
  • Refocus advertising dollars where customers are now: online and TV. Use those dollars to drive traffic to your carryout or delivery services.
  • Increase your restaurant’s social media posts, assuming you have pages on either Facebook, Twitter, Yelp, or otherwise. Post menus online and share daily specials.
  • For lunch orders, post menus or reminders before 10:30 am, and for dinner orders, before 4:30 pm.
  • If there is a Facebook group for your neighborhood or community, post your menus there as well.
  • Place signs on-site reminding customers who are waiting to pick up their food to maintain social distancing and offer curbside pickup if possible.
  • Offer gift cards for purchase; some restaurants are offering a discount on gift cards by a certain date, to help drive purchases in the short-term.
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Make a point of including sanitation and restaurant hygiene in your customer communications. Make sure they see your staff taking extra precautions and wiping down/sterilizing surfaces when they come to pick up their food. Cleanliness should be part of your brand now.

What you can do now in the short-term to embrace the change we’ve all been thrust into – and continue to stay in business – is continue adjusting and rotating menu selection to items that are available and travel well. Add in comfort food items more than what might usually be on the menu. Another idea is to offer “meal kits” where customers buy pre-packaged ingredients for menu items they can make at home. Or, offer family-style catering. Also consider temporarily lowering prices for carryout and/or offering incentives to order, until social distancing bans are safely lifted, and customers can dine in again.

To avoid devaluing your restaurant, consider these tips when implementing temporary discounts:

  • Partner with a local food pantry or food bank and encourage customers to bring a non-perishable item to receive their discount.
  • Require a minimum purchase amount.
  • Set the discount only to certain menu items; for example, items that are offered during the dine-in closure only.
  • Include add-ons with the discounted items, like alcohol, an appetizer, or a dessert.

You’ll also need to determine the essential employees that are needed for adapted work shifts and communicate any new (or existing) policies to everyone clearly. If you don’t already have one, now is an excellent time to update an employee and vendor contact list so you can reach people quickly if a need or problem arises.

On the food side of things, evaluate reserve supplies and consider how possible interruptions in essential services could impact operations. Reduce inventories, food prep, and minimize food waste when possible, and reach out to local leaders and organizations. Find out who makes decisions about food service operations. Plan any community food needs in advance, such as supplying food for a school or health center. That could also help if you need to reduce food inventors but don’t want the food to go to waste.

Looking Ahead: Strategies for the Future

Finally, if there’s anything that this crisis has taught us, it’s that innovation is a critical piece of every business, and restaurants are no exception. The way consumers are dining is changing; we‘ve already seen evidence of that. Now is the time to adapt your restaurant to future food and dining trends.

What you can plan for in the future:

  • Reconfigure the kitchen layout so there’s a dedicated space for carryout and delivery orders.
  • Develop an app or upgrade your website for your restaurant to easily accept online orders.
  • Consider packaging choices for carryout and delivery: look for options that are eco-friendly with tamper-resistant labeling.
  • Do the math on hiring your own delivery drivers and take the entire delivery food service process in-house if it makes sense.

What’s Next for Your Restaurant?

We know you’ve been having lots of uncomfortable conversations lately. Keep them going and talk to your landlord, insurance agent, bank representative, and others about modified financial arrangements. If you haven’t already, apply for funding from the CARES Act and other resources to keep the lights on and employees paid. Some of these funds don’t have to be repaid if you use them for payroll and other expenses within the first eight weeks of the funds being disbursed. You can read more about those in our previous blog post here.

Another financial resource to keep a close watch on is the Restaurant Employee Relief Fund, administered by the National Restaurant Association. These are grants that will be made available to industry employees affected by the COVID-19 outbreak. More information is available here.

It seems as if the situation is changing all the time, and it can be really confusing to decide what your next step should be. Adams Brown is here to help. Contact us if you have questions about how to stay in business right now, or which funds are right for your restaurant. Together, we can weather this storm and make the best decisions for your restaurant.