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The new blueprint for operating: what operators expect after lockdown

29 April 2020 by

Although the future for our sector is unclear, operators can and should be using this time to plan ahead. But many business leaders advise thinking in terms of a new opening, rather than a relaunch. James Stagg finds out more

When the lockdown is lifted, it will certainly be a long time before life returns to normal. For hospitality that will inevitably mean attempting to operate through some form of social distancing. Opening a hospitality business as it was left pre-coronavirus just won't be an option – an alternative business landscape will have to be navigated, and this means developing a business with a new model and operational approach.

Operators who are planning for various scenarios should think of it as a new opening, which means marketing your business as though you will be greeting guests for the first time. They will need to get the word out that they're back in business, offering an experience that's as safe as possible – and affordable, too.

Chris Galvin
Chris Galvin

"The situation is changing daily, so we're running scenarios all the time," says chef and restaurateur Chris Galvin. "There's a good flow of information on reopening from Hong Kong right now, so we're looking at that to see what we might face.

"We're changing our approach and looking at everything as though it's a new opening. I see a glint in the management's eyes when I talk about a new opening. I think I've done in excess of 30 openings now, from small cafés to bistros and large restaurants. They all take a bit of you, and no two are the same, but they're energising."

We're changing our approach and looking at everything as though it's a new opening

The view from Hong Kong points to a return to business of 40% in the short term, as social distancing of two metres between tables (enforced by fines) reduces capacity. Guests can only book if they have a QR code confirming they are coronavirus-free. Cashflow at casual restaurants is, at best, half of what it was, local reports suggest, even with any delivery income, while high-end restaurants are finding it even tougher.

Given that bleak picture, it will be vital that restaurants, hotels and caterers shift their business to satisfy the requirements – albeit temporarily.

Ranjit Mathrani
Ranjit Mathrani

"It's a complex scenario," says Ranjit Mathrani, chairman of MW Eat, which operates restaurants Amaya, Chutney Mary, Veeraswamy and Masala Zone. "You have to consider the timing and nature of any relaxing in restrictions as well as expected customer demand.

"What is the reference point for making long-term decisions? It might be April next year, where we could say that business might be 80% of that of 2019. In which case, we need to make changes to the business model to ensure we can be profitable. It means examining product, price and staffing."

Veeraswamy
Veeraswamy

Change by design

Any plans made now will have to be flexible enough to change depending how the lockdown unravels. To start with, the design of a space will be key to satisfying any type of distancing measure.

"When opening a business, you have to be agile and fleet of foot and there's no truer sentiment now," Galvin says. "The critical path needs to run that whole gamut of design, as well as things you had always wanted to improve. For many operators the thought of stopping work for a day was impossible – we tended to pay double to get contractors to work out of hours – but now you have that time."

Removing or making unavailable every other table is the relatively simple side of distancing. Where it will become more tricky is at pinch points, such as entrance areas, and shared spaces such as toilets.

Galvin Green Man
Galvin Green Man

Galvin says: "At Galvin Green Man we often have 40-50 people at the bar having a drink before sitting at their table. We don't think that will be possible for months, so we're planning around that and looking at what other areas we can create to manage the flow."

Mathrani is investigating the use of fire exit doors so that there is a one-way flow of guests through the restaurant. "We will inevitably move to reservation-only too," he adds.

Galvin Green Man
Galvin Green Man

Clean and clear

Meanwhile, hygiene credentials will have to be communicated carefully, with practices visible and policies available for guests to scrutinise. Much of this will come down to common sense, believes Corinthia London managing director Thomas Kochs.

Thomas Kochs
Thomas Kochs

"A lot of it is in our hands," he says. "We mustn't forget the humanity in all of this. I hope it won't turn into paranoia as there are many healthy people in this country. A little bit of normality will come back and my hope is that we can reopen and be very responsible and respect the gaps between tables and not book restaurants to capacity – if that demand is even there."

Kochs recognises that customers will want to be reassured on safety, so he recommends being transparent about all operational measures. "We may be asked: what cleaning materials are being used? How are the rooms being cleaned? How hot is the wash cycle for your pillow cases? Did the person who cleaned my room wear a mask and gloves?" he says. "There might be a need for us to put a covering over uniforms for the time being so that people don't enter personal spaces in the clothes they were wearing in the room before. That's the kind of information we're happy to give out."

We can reopen and be very responsible and respect the gaps between tables and not book restaurants to capacity – if that demand is even there

And though for the time being there isn't a requirement to wear face masks in public, all the operators The Caterer has spoken to expect to have to introduce them, although there is disagreement as to what will be expected of the public in a hospitality environment. Mathrani says that masks are a difficult accessory to introduce in a restaurant ("obviously customers can't eat while wearing masks and it will be challenging for waiters to wear them"), while Galvin thinks it is inevitable and is already contemplating the branding. "Maybe we'll get cool masks designed," he ponders. But for Kochs, any such short-term solution must be universal, so as not to stigmatise.

"We have to be careful this doesn't turn discriminatory," he warns. "Health must come first in our decision-making – on both sides, the guest and our teams. So, if waiters wear masks, I think the guests must wear masks too. What's the point of the guests not wearing masks? It's not as if the waiter is the viral component in this."

Refine and rethink

Once the guest is reassured of your hygiene credentials, the offer – as ever – must be spot-on to tempt in the even more cash-conscious consumer. If Brexit had put the brakes on discretionary spend, coronavirus threatens to pull up the hand brake, with consumers stockpiling any cash alongside toilet roll and flour in case of further fallout.

Galvin says he is concerned for the future of fine dining and is already considering changing his approach. "We're talking to suppliers to see what we can do. People will have less money, so they will be taking care of their basic needs first," he adds.

Veeraswamy
Veeraswamy

Mathrani believes that any reduction in restaurant capacity will also mean a reduction in menu choice. He is preparing for a halving of turnover once a socially distanced reopening is acceptable by looking at the business models of his restaurants, with a view to simplifying operations without affecting the value proposition.

"It will be challenging to drop prices," he says. "There will have to be a simplification of menus and in the nature of the offer. In informal dining, some will have to turn to more processed food made centrally, rather than producing it in their own kitchens. For us, it could be dropping grills, which are more labour-intensive, in favour of curries, and dropping naans, which need last-minute preparation, in favour of parathas."

Communicating all of this, and somehow marketing an offer with sensitivity while also standing out from the competition, will be fundamental. "We will have to explain that these are short-term measures that are in place for us to deliver an experience and survive financially. Hopefully, customers will be more understanding as they are acutely aware of the implications of social distancing," Mathrani says.

Galvin adds that the pause due to coronavirus provides an opportunity for operators to show some flexibility and a more caring nature, and to even consider how they can operate more sustainably. "We can now stop and think about these things," he says.

"We're being quiet on social media at the moment. Now is the time to have some respect and reflection. But I've been doing some blog writing about buying a restaurant. However wacky it seems right now, lots of people are interested. Then I'm going to look at design and finding a team – taking people gently through life as a chef. It's an ambling trip.

"Once we get a feel for where we are, we'll increase our social output. In the meantime, now is the time to service equipment and refresh the exterior."

Corinthia London
Corinthia London

Kochs, too, feels the need for reflection, even when it comes to reopening. "We feel that maybe it won't be an all-singing-and-dancing celebration of the lockdown being over. It's more a message of ‘we're here for you when you're ready, and this is what we have in place to make your stay as safe and enjoyable as possible. It's an empathetic message. For both the staff and for the customer."

No matter what the limitations are when hotel and restaurant doors are opened, it will be a jubilant moment for all employees returning to serve guests. As Galvin says, operators should think of it as an opening and an opportunity to begin afresh.

"The dream of opening a restaurant or hotel is still rare," he says. "This will give everyone the opportunity to experience that thrill. It will be quite joyous. Everyone will get to experience that sensation of turning a key, walking into a space and breathing life back into it."

Keep your kit in good working order

When the time comes to reopen, it's unlikely that there will be a great deal of warning, so make sure your kitchen kit is in good working order, advises Chris Galvin.

"Now is the time to service your equipment, and there are great deals out there," he says. "It's a great time to get fitters in to service fridges and ovens, deep clean and bring the kitchen back to new. It will lift the spirits of returning chefs."

As he points out, the last thing anyone wants is to return to find that a vital piece of equipment has failed.

"We've had a note from Rational saying we need to maintain our ovens in lockdown," Galvin adds. "The last thing we want is to switch anything on and there's a bang or nothing happens. We'll all be calling the same engineers, who will be overrun. We now send someone in every other day to ensure everything is working."

Contract catering: no one-size-fits-all solution

In the office environment, contract caterers will have an important role to play in any controlled workplace return strategy. With employees likely to be cautious of visiting numerous lunch outlets, any catering service will need an offer that can manage both demand and social distancing.

"Many client employees may be nervous about returning to the workplace and will need to feel that their health and safety is being taken care of by the client, as well as by us and any other contractors," says Vacherin managing director Phil Roker.

Phil Roker
Phil Roker

"The provision of healthy, sustaining food and great coffee within the office reduces the need for employees to leave the building during working hours."

Though with every contract being bespoke, canteens will be managed in different ways, so there can be no one-size-fits-all model. "We are working with clients now about what changes we make when we come back," explains Genuine Dining Co's managing director Chris Mitchell.

Chris Mitchell
Chris Mitchell

"This includes changes to food offers. There will be no more help-yourself salad bars, but more packaged goods and takeaway items. This is somewhat frustrating, given the lengths we've all gone to as an industry to reduce single-use disposables."

Technology will also play a large part in delivering not only a contactless solution, but a distanced one. "Cash is a thing of the past," predicts Mitchell. "Contactless will rule and pre-ordering apps are becoming a necessity."

At Vacherin, Roker and his team are rewriting menus to be packaging-compatible and also suitable for click and collect, minimising touchpoints and person-to-person contact. "Our app, which has been a hugely successful engagement tool, will now come into its own with its sophisticated and user-friendly order and pay function," he says.

But although Mitchell believes that app use will increase, any caterer's plans for distancing will only be temporary. "People want to collaborate person to person," he says. "They are bored of Zoom meetings. People want to sit in their workplace restaurants, which have been so heavily invested in by their employers, and have a coffee and a gossip with their work friends and chat to our staff.

"It's important we are given the opportunity to trade as close to normal as possible to help aid this transition back."

It's important we are given the opportunity to trade as close to normal as possible to help aid this transition back

Promote smartly to rebuild your trade

Rosalind Hunter
Rosalind Hunter

Hospitality businesses need to react quickly to the changing commercial environment when lockdown slowly eases, says Rosalind Hunter, partner at pricing strategists Simon-Kucher & Partners.

Realistically, this is not a time to target new customers but to regain the relationship with past customers. Building back demand from zero is a daunting prospect, so here are some key elements to consider:

  • Promote through upselling: Not all discounts are created equal: some purely erode your bottom line, whereas others can be used to upsell to consumers, providing them more value but also you with more revenue. Develop offers that encourage customers to upgrade on a ‘normal' purchase, such as adding a free drink.
  • Provide value to loyal customers: Look at ways to increase loyalty rewards, such as offering double reward points for a few weeks. The offer won't come without a cost, but it is growing the most valuable customers you have.
  • Use ‘gamification' to improve customer engagement: Engage with your customers in a playful manner. The past weeks have been stressful, so introducing ways to entertain customers with puzzles and competitions linked to purchases can introduce some fun to your brand.
  • Accept when promotions alone won't fix the problem: Consider whether your existing proposition aligns with the ‘new normal's' needs and disposable income. It may be tempting to keep promoting to drive volume, but you may need new products to better match customer needs without eroding margin.
  • Ensure your marketing addresses key barriers: Don't forget the non-price barriers, such as hygiene concerns. Promotions alone will not overcome these, so ensure communication addresses the issues.
  • Be flexible and responsive: No one knows exactly what the ‘new normal' will be, or how it will develop, so be ready to identify what is working and adjust. Quickly adapting will be critical for success.

How to relaunch your business

Rochelle Cohen, managing director at Roche Communications, has eight tips for your relaunch marketing plan:

  1. Start afresh: All the rules that apply to launching for the first time apply now. You have to re-educate people, remind people that you're there and tell them what's great about your venue – all while being mindful of any restrictions.
  2. Plan: Take this time to look at your business and consider what you would like to change. Define what your USPs are. They may be different now, as some of the things you may have pivoted to and started offering will be worth continuing.
  3. Put everything in place: For example, you can write the press release and put the marketing campaign together now, even if it needs a tweak nearer the time. Think hard about who you market to: do you need to get back into local businesses? What does your social media look like? Can you do an event that will make a lot of noise while maintaining any distancing requirements? Influencers will be keen to go out again, so think about who you can partner with now to help spread the message when you're open.
  4. Engage: Decide who you are and put a plan in place that looks at marketing, PR and social. There will be a lot of noise out there. Everyone will want to shout about how they're open, so you need to think about something that will cut above the noise and be more engaging and exciting.
  5. Assess the tone: Be mindful of people's moods. They will be strapped for cash but desperate to go out. Extravagant, high-priced tickets won't be the way to go when you first reopen.
  6. Get the price right: Look at your product offer now. People will want to socialise – they miss friends and colleagues – but it doesn't need to be about discounting. It's about offering an experience that is accessible, affordable and interesting. That doesn't have to be price-led – it can just be clever menu creation so you make the same gross profit.
  7. Don't be gung-ho You can't avoid what has happened. If, when we return, everything is back to normal, you can be gung-ho, but that's unlikely, so in a semi-lockdown state there has to be some measure of reassurance in your messaging. Guests need to know that you've put the right practices in.
  8. Maintain the goodwill: Finally, don't ditch all the great CSR, goodwill and charity work. We must not stop being generous and community spirited. Businesses need to think about how they behave – it might be about the only positive that will come out of this situation. People are being kinder and generally more mindful, so let's not forget that social conscience when things improve. We will all remember those people who have treated us decently.

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