Tips for restaurateurs in the Corona crisis
Restaurant owners have always been a special bunch. They are idealistic fighters who work hard with passion for little money. With what goal? To create moments of welcome and hospitality for large parts of our society.
In 2019, according to dehoga, 2,437,000 employees generated 98.6 billion euros. In contrast, according to the Association of the Automotive Industry, the automotive industry generated 436 billion euros in the same year with 832,841 employees. In view of such figures, it is obvious that hardly anyone in the Covid-battered catering industry has any financial reserves. This is now also revealing that the industry is a survivor. Covid is "only" driving to extremes what is a permanent condition in the catering industry and should be abolished: the permanent struggle for existence. To do this, however, the industry must reposition itself and confidently tackle core issues that have always been present but have now clearly emerged as neck-breaking.
FIRE&FOOD Food Scout with Andrew Fordyce
1st High: Great rent instead of great location
What is killing most businesses at the moment are sometimes horrendous rents. A great location costs money. Often the calculations are wrong from the start. Between eight and 14 percent are budgeted for rent. Rents in central locations of 10,000 euros plus are not uncommon. The simple calculation: That is 10 percent of a monthly turnover of 100,000 euros. The business has to be really busy to achieve this turnover. At 14 percent, the rent increases by 4,000 euros, at eight percent it decreases by 2,000 euros. In between there is 6,000 euros. The goal is therefore a comfortable percentage-based, turnover-oriented rental price volume, but also an optimization of the contract conditions. These could be exception clauses that shorten the notice period under defined circumstances.
2nd High: More homogeneity instead of complexity
The gastronomy landscape is very complex. It ranges from youth hostels to hotels and the red light district, from quick service to fine dining, from canteens to airline catering, not counting suppliers, manufacturers, consulting firms and specialist media. This is why there are numerous associations in Germany. There is no central interest group comparable to that of the automotive industry or the political lobby based on it. But this could finally put an end to issues such as the different tax rates between seven and 19 percent. Standardization works, as can be seen from the current universal tax rate of 7 percent. It is the first step towards cross-sector measures in the future.
3rd High: New sales opportunities
Covid has set new standards in sales channels. Overall, they appear more self-determined because they are geared towards efficiency rather than the guest's supposed wishes. Menus are more reduced, and not every dish is necessarily available for immediate pickup, but must be pre-ordered. This even works at a chicken roaster. Anyone who wants to pick up their smoked chicken from the stand at the weekend market has to order during the week. Otherwise, there is a fixed quota that is sold according to the motto "first come, first served". This means that quantities of goods can be calculated precisely.
The losses from crises like Covid cannot be recouped. You simply cannot sell a place twice. The lesson from this is to spread the risk through a larger portfolio of services. In other words: A second pillar is needed, such as an additional delivery or pick-up service or products that are sold via an online shop. Those who previously wanted to promote their restaurant through a website should now invest in an app to handle these services from advertising and ordering to payment.
4th High: Employee Care
Many restaurateurs are desperately trying to keep their employees. The legitimate concern is that staff will move to service-oriented industries such as retail, which promise more stable working conditions. The urgency of employee retention is shown by Burger King's campaign in the UK, which called on its customers to order from McDonald's. The intention behind this was to secure jobs in the industry through sales. This is more evident in McDonald's's staff partnership with Aldi, where employees from restaurants with limited operations are made available to Aldi branches. Covid-related measures are already moving towards changing the image of the catering industry from an insecure to a reliable, appreciative employer sector. But this must be undermined. Higher wages through higher prices and/or the introduction of a service charge would send the right signals.
5th High: Value as a social cornerstone
Covid has changed the customer structure and thus customer behavior in many catering sectors. The anonymity provided by tourism customers has changed into a certain intimacy with customers on site. Tourism is restricted or canceled altogether, but more people have worked from home, which has shifted the focus to local customer acquisition. Conversely, customers show their connection by realizing how much social experience has been lost due to the restricted catering operations and how negatively the cityscape changes when restaurants close. This brings people closer together and explains the acceptance of new offers such as the full restaurant feeling through the take-away offer of complete menus, accompanying drinks included. Customers are actively asking how they can support, for example by buying vouchers. More expensive products as well as price increases are met with high acceptance. What is happening now can be built on in the future, namely self-esteem in the food service sector. Today we are fighters for survival. But the whole industry should learn from this and turn from servants to earners.
