19th October 2020


The Elephant in the Room

It is no secret that the hospitality sector has taken a beating over the last few months. Certainly, there will also be tough times ahead.

The “new normal”, as it stands, is unprofitable and, indeed, unsustainable for many independent hospitality businesses - small and large. But there is hope!

This article will provide an optimistic perspective to aid the survival of the hospitality industry by providing initial guidance in returning organisations to a profitable state.


So, Where to Start?

Let’s begin with a few of the current issues:


Booking Systems

In this new normal, we are all facing contemporary measures to help prevent the spread of Covid19. One such measure, is the booking of places to dine at restaurants, even on a traditionally quiet mid-week night.

Aside from consumer frustration at this novel institution, these booking systems are often “clunky” and cause friction, especially from the recent number of no-shows backing-up the computer!


Social Distancing Measures

Another difficulty is complying with the social distancing measures. Despite businesses’ best efforts, social distancing rules inevitably mean fewer covers and lower capacity, making reopening for many eateries unprofitable.

As a result, even restaurants that are fully booked show 30-40% lower sales compared with similar day statistics pre-lockdown.


Consumer Evolution

These two factors are additionally compounded by the recent evolution of consumer habits. Whilst these habits may only be a temporary blip, eating at home, takeaways and deliveries have become the ingratiated norm over and after lockdown.

Plus, with the current guidance limiting the number of people in one’s group of friends at social gatherings, there are restrictions on how many covers can be taken from one party. Revenue and spend per head thus becomes impacted by these covers, or the lack thereof, as the “vast dinner party” concept dissolves until the awakening of a post-Covid world.


The Optimistic Section

Indeed, the hospitality industry is facing challenging times.

Yet, there remain green shoots of hope derived from the plethora of innovation, adaptation and collaboration across the country’s spectrum of operators. 


Regard the Restauranteurs

Chefs and independent restauranteurs across the country have been following new business models in developing innovations into a sustainable revenue stream. These developments have meant focusing on three priorities going forward:

  • High-margin, popular and transportable produce and dishes
  • The reconfiguration of kitchens and service
  • Nouveau logistics

Firstly, operators are reducing menu sizes, analysing their gross profit margin and reviewing best/worst sellers to refine their food operators. Taking inspiration from behavioural science, bars are also promoting higher-margin drinks, like cocktails, by “nudging” people towards purchasing these ‘top-of-the-line’ goods.

Secondly, the drive for efficiency to bolster the bottom line, as well as initiatives and investments to lift sales, have had many operators reconsider underutilised space in their properties. Function rooms, cellars, outdoor areas, and nooks are being reviewed and refurbished to increase capacity and covers.

Finally, restauranteurs have re-evaluated forgotten logistics in looking to the present day. Can they install a pizza oven? A bottle bar? What technologies can be adopted to further their development within their premises in this new normal?

Whilst all these priorities are commendable, there are others that should be administered with caution. For example, one must be careful in using a tactic such as heavy discounting. This method is unsustainable, despite being an excellent foundation in getting customers back through the doors and beginning to break habits of eating and drinking at home.

Indeed, while ‘Eat Out to Help Out’ is a good initiative (for most restaurants anyway), the wealth of eateries participating in the scheme dilutes the impact of a lone restaurant’s discount.

Instead, the most innovative operators are enhancing and augmenting this deal with a twist of their own. For instance, the provision of heavier discounts on selected products and dishes, additional discount days and/or an extension beyond August, just to name a few.

The impetus is on the restauranteur to not fall into complacency but evolve with creativity.


Takeaway Anyone?

As we have seen, innovation and creativity thrive in a crisis. We simply need to adapt, invent and make do in response to this economic calamity.

Things will get better. We will survive. Keep sharing stories of innovation, development, collaboration and invention to help as many businesses as possible endure the economic and cultural shock of the pandemic.

In doing so, we will emerge leaner, stronger and more resilient in our return to success.

Sign up for our latest insights, ideas and inspiration