By Doug Radkey
Well, if that headline doesn’t startle you in this industry, I am not sure what will.
Most restaurants throughout Canada and abroad are hoping they can survive to the day where they can reopen their dining rooms. However, the reality is that it may not be viable or even desirable to open dining rooms, under the current guidelines set out by different levels of government. And when it comes to how long these phases and restrictions will be in place – no one knows for sure.
Here in Canada, the restaurant business can also be very seasonal. Right now, many restaurants are operating their patio, whether it is their own pre-built patio or a temporary one. While that is perhaps a lifeline for some (and when it is, barely), the reality is that it will be short-lived.
When the chilly fall and cold winter seasons are upon us, there must be a strategy plan in place.
Many restaurateurs make a high percentage of their revenue in the late spring, summer, and early fall months, often enough to help them float through what can be a slower winter season.
With a well-below average summer season (for obvious reasons) and the financial hardships placed on restaurants over the past few months, how can many survive the upcoming winter season?
The sad reality is that many with larger real estate footprints and dine-in offerings will not. There will be more closures in the coming months as financial savings dwindle away, as consumer spending tightens up leading into the holidays, and as patios are no longer viable.
This leads to the other question: Will guests even come? Guest sentiment around dining-in seems to be inconsistent with the up-and-down trends of COVID-19.
New research from Accenture shows that more than half (56 per cent) of Canadians are reluctant to visit bars and restaurants in the next six months. That does not bode well for the industry. Furthermore, the risk of COVID-19 spreading increases in a restaurant or bar setting, as stated by the U.S. Centers for Disease Control and Prevention. As per the CDC website:
- Lowest Risk: Foodservice limited to drive-thru, delivery, takeout, and curbside pickup.
- More Risk: Drive-thru, delivery, takeout, and curbside pickup; on-site dining limited to outdoor seating. (Seating capacity reduced to allow tables to be spaced at least 6 feet apart.)
- Even More Risk: On-site dining with both indoor and outdoor seating. (Seating capacity reduced to allow tables to be spaced at least 6 feet apart.)
- Highest Risk: On-site dining with both indoor and outdoor seating. (Seating capacity not reduced and tables not spaced at least 6 feet apart.)
What’s the outlook for dine-in?
Although the same number of people still need to eat, the closure of restaurants, the economic worry, the potential for an unsafe indoor environment, and the shift to takeout, curbside, delivery, and home cooking will have an effect on the future of dine-in and the full-service side of the industry for the foreseeable future. This will put pressure on venues with dine-in food and beverage programs to execute at an even higher level and translate the appreciation of a quality product and the anticipation of lower seat counts with their pricing strategy and intended experience.
While there is economic concern, there is still a very large market of above-average income makers, in addition to a growing sentiment among some demographics: that they want (and “need” ) to get out and they’re willing to spend a premium to do so.
Outside of ensuring the restaurant business model has been adjusted to provide multiple revenue streams (dine-in plus takeout, curbside, delivery, catering, grocery, convenience, meal kits, etc.), a consideration needs to be made towards the on-premise experience as we move into the winter months.
Have a plan in place for moving/removing tables, chairs, and bar stools and also any gaming or entertainment equipment for the time being to maximize your opportunity. Re-work your seating alignment to increase private or semi-private dining experiences in accordance with the guidelines.
You want to ease your guests’ level of anxiety by removing any tables and chairs not being used during this time. It is ideal to make the space look, well, more spacious. Make your guests feel relaxed.
No matter your concept and style of food and beverage program, it’s time for innovation and creativity, and perhaps even some collaborative community efforts. There is now an enormous opportunity to create an elevated semi-private, full-sensory experience by taking the resurgence of at-home dining to the next level.
This can be done by creating unique food and beverage packages for micro-groups in the restaurant itself. Consider a package that includes customized tastings, cooking tutorials, wine/beer/spirit/mocktail pairings, and even cocktail making – all in a safe but intimate space.
With correctly marketed packages such as this, you can charge more per person than you were once accustomed to, and with a focus on small groups, you will be in a position to potentially make up three table turns with the purchase of just one full sensory experience package. And since reservations are needed for such a program, you will also position yourself to save on inventory and labour.
So, what’s the answer?
Going back to the original question: Is dine-in dead?
The answer is no.
However, strategic planning still holds the key to success. The same-old thinking will result in the same-old results. Adjusting and adapting the correct revenue mix and keeping an open mind to a new, revised dine-in model will position a restaurant for success over the upcoming winter months.
While hope is not a strategy, let’s hope by spring the COVID-19 virus will no longer be a pandemic and the memorable dine-in experiences that we once knew can resume to some form of normalcy. But to get there, you have to be open to change while being innovative and creative, two traits that make up a successful restaurateur.
I can’t wait to see what you come up with!
About the author:
Doug Radkey is the president of KRG Hospitality Inc., the author of the book Bar Hacks, and an international keynote speaker on all things restaurants, bars, and boutique hotels. Being in the hospitality industry for over 20 years has allowed him to become a leading voice in the development of detailed feasibility studies, award-winning concepts, strategic business plans, unique menus, memorable guest experiences, and financial management systems. Continue the conversation with Doug on Twitter, Facebook, and LinkedIn, or by visiting krghospitality.com