In this unusual environment, consumers hold more weight than ever in the destiny of restaurants.
As restaurants reopen, they are re-entering a market that is tenuous and uncertain. Operators are looking for new ways to preserve and grow their business, while simultaneously providing customers an enjoyable experience.
Brands such as MINA Group, which has multiple properties that range from the Street Food Hall in Hawaii, to fine dining restaurants like Michael Mina in San Francisco and StripSteak in Las Vegas, have to rethink their operating model. Over the course of the last few months, they have tested multiple concepts with varying degrees of success. That success, as with many brands across the nation and around the world, is largely dependent upon loyal customers that want to see their local restaurant community survive.
In a recent study by Oracle Food and Beverage, 2,000 consumers in the U.S. and U.K. were asked how their dining preferences and behaviors have changed prior to and during stay-at-home-orders. Interestingly, nearly 40 percent of consumers stated that they purchased more frequently from independent restaurants, which is double the number reported for major chains (20 percent), and 32 percent stated they feel more loyal to the brands they engaged with in the last few months.
We spoke with MINA Group in June about their approach to the extenuating circumstances and despite the challenges, they were buoyed by their community. “In the food industry, we’ve always worked for the betterment of our businesses, but now I think everyone is working for the betterment of each other—colleagues and customers alike,” says Patrick Yumul, president of the MINA Group.
Quite simply, in this unusual environment, consumers hold more weight than ever in the destiny of restaurants. Not just by choosing to patronize a business, but how they interact with that brand on and offline. Here are some specific ways consumers can help restaurants get back to doing what they are passionate about percent creating fantastic culinary experiences:
Make Good on Your Reservation
Reopening guidelines require many restaurants to open with significantly reduced capacity—as low as 50 percent fewer tables on-premises, resulting in much lower revenue-generating opportunities. This necessitates finding new ways to increase the number of covers during operating hours to generate more revenue per square foot.
Margins are thin, ensuring maximum capacity will be critical for restaurants to preserve profitability. If you make a reservation, make sure it’s accurate and everyone shows up. If every reservation of four people has one person no-show, it can cost the restaurant 20 percent of revenue for the night and prohibit their ability to just break-even.
Show Up On Time and Don’t Linger
Selling tickets at destinations like Alinea and Next can outperform the typical reservations approach, but that has traditionally only been palatable for diners that frequent Michelin-rated venues. It’s not unlikely to see this model adopted on a broader scale. Applying the concept at a fast-casual restaurant for example might look more like paying a non-refundable deposit at the time of reservation, which is then applied to your bill or paid in full if you fail to show up. You may even have a designated departure time. On the surface, this might feel off-putting, but before you light up a business on Facebook, consider their position—they need to know with precision, how many staff, inventory, hours of operation to make the numbers work. One extra table of four people can mean an extra $100 in revenue a night, and over the course of a year that’s $32,000.
Don’t Complain if Menu Choices are Streamlined
Food waste has always been an issue, pre-COVID waste on average accounted for up to 9 percent margin erosion for your typical 80 seat restaurant. Ordering with precision is a science but with a supply chain that’s in flux and foot traffic that’s still unpredictable, it can be very difficult to not incur some waste. Restaurants will be challenged to accurately forecast how much to order and will likely play it safe to avoid throwing away expensive inventory. So, when something you want is no longer on the menu try to be understanding. A single point of improvement in production food waste, with better management of avoidable food waste over the course of a year, results in a $21,700 improvement to the bottom-line, which means restaurants can pay their bills and keep the doors open.
Order Direct from the Restaurant
Not only is ordering directly from the restaurant good for them, but it is also good for you. The cut aggregators take from independent restaurants has been all over the media, ranging from 15-35%. It’s caught the attention of government officials and in multiple cities is capped at least for the near term. Using an aggregator app isn’t all bad, it’s an important part of a restaurant’s marketing strategy, but if you discover a new venue and you like them, order direct next time. You’ll save yourself between 17 and 40 percent and ensure the restaurant makes a profit.
Simon de Montfort Walker is the Senior Vice President and General Manager at Oracle Food and Beverage.