Even as restaurant operators scramble to keep the lights on, the question of what’s next and how to stay afloat in the future is getting increased attention.
We really enjoyed the conversation between Jim Balis of CapitalSpring and Jonathan Maze of Restaurant Business on the podcast A Deeper Dive, and wanted to highlight some of the insights Jim has about how restaurants need to adapt and what they may expect once we begin to come out of the COVID-19 closures.
You can listen to their full discussion below or at Restaurant Business.
Both men acknowledge that there is no precedent in any previous economic downturn or global illness to give as a blueprint for the future. But based on what we’re seeing now, we can make a few guesses about what will help.
On what steps to take today to make sure business isn’t hurt in the future.
Jim says he knows many restaurants have had to throw together curbside and delivery options, but this isn’t something that they can do for 2 months and then abandon. Off premise dining was already growing prior to the pandemic, and it will continue to grow even faster afterwards.
Many guests will still be too wary to dine in, even once restrictions are lifted, so restaurants will not be at capacity. They need to do a deep dive on how to get the most out of off premise, as it will likely be a larger percentage of their business coming out of the pandemic than it was going in.
Make sure the delivery or takeout menu is optimized with items removed that won’t travel as well. Double check your pricing to ensure it covers the added packaging and delivery fees
On the labor side, do what you can to retain labor, especially those that will cost the most to hire new and train. It’s important to balance as much as possible what it would cost to hire and train a new staff vs what money you can give now to retain as many people as possible. Ask yourself what you can pay people between now and then to keep them on staff so it’s not like opening a new restaurant in a few months.
One of the ways Jim has done this is to keep managers on as hourly staff since they are trained in front and back of house, let their previous hourly staff collect unemployment, and hope they can be rehired afterward. Even if some new hourly employees need to be brought on, the experienced managers will still be on staff to guide them.
How to set yourself up to benefit down the road.
Use this time to reorganize your business to accommodate the takeout and delivery bump that will still be here. Create areas inside for drivers and takeout customers to sit. Find ways to offer upsells to takeout orders. Look at whether other off premise ordering systems make sense for you, like an app or mobile menu via QR code. Start looking at your SOPs for curbside and begin tightening them up now, especially around contactless experiences.
What to do to capture consumers while the economy is recovering.
It’s a difficult question to answer, as the overall decline of dine in means deeper cuts into profits once delivery fees go up and things like drinks aren’t being purchased as much with takeout orders. You may not get the same amount of people coming back for a long time, which is why it’s so important to optimize off premise as quickly as possible.
Will restaurants stick with curbside and delivery after everything?
Probably most will. There are some laggards, even among large brands who are taking a long time to pivot to being able to order online or through an app. But restaurants who want to survive will likely have to have some form of off premise dining option since that’s where the trend was headed even before the pandemic hit.
For more wisdom on where things are going with restaurants as COVID-19 continues to shape the future, check out this recording of a conference call that Jim participated in with representatives from many other restaurant chains.