Canadian consumers are ready to keep supporting restaurants, but managing your margins and elevating guest experience are musts.
By Tom Nightingale
Canadian foodservice and hospitality is finally getting on the road to healing the deep wounds of COVID-19. On July 16, indoor dining reopens in Ontario for the first time since Easter weekend, a landmark summer reopening for an industry that has been devastated by the effects of the pandemic.
Ontario is the final province to reopen, and as patrons begin to reacquaint themselves with indoor dining across the country, operators need to know what they are thinking and what they are wanting to see in summer 2021.
The Fifteen Group, a leading hospitality consulting firm, recently surveyed consumers across Canada to assess how patrons are currently feeling about returning to restaurant dining as we move deeper into summer.
Customers happy to return with some assurances
Stripped back to the basics, the survey found reason for restaurant operators to be encouraged.
38 per cent of respondents said they would look to dine indoors as soon as possible, while 34 per cent said they would consider dining indoors under certain circumstances. Meanwhile, nearly half (46 per cent) suggested they would ultimately eat in at restaurants as much as they did before the pandemic.
David Hopkins, President and CEO of The Fifteen Group, told RestoBiz that his firm is “optimistic” about the next six months and beyond.
“Restaurants are probably going to rebound in a big way,” Hopkins said. “We’re already starting to see that in some of the markets. Even in Toronto, where just the patios have been opened to date, the response has been massive.”
It was notable, though, that many consumers would be looking for certain assurances before returning to dining rooms. For example, as vaccination rates keep increasing, two-thirds (67 per cent) of respondents said restaurant workers being vaccinated is a crucial consideration in their decision as to whether to return to indoor dining, while a similar number (65 per cent) support vaccine passports for restaurants.
Price increases are a useful strategy
Throughout COVID-19, Hopkinshas been an advocate formodest price increases to help restaurants mitigate the financial hit of the pandemic. While some restaurateurs may balk at the idea of raising the cost to consumers, Hopkins says that consumers have already shown they are willing to pay a little extra.
“We found a huge number of respondents support price increases,” said Hopkins, citing the survey conclusion that 62 per cent of consumers said they would support a 5 per cent or 10 per cent menu price bump. That number climbs into the 70 per cent range when looking at higher-income individuals. “This all bodes well for what we’ve been telling our clients and the marketplace, which is to put prices up and actually recoup some of the losses and make the margins better in the industry,” added Hopkins.
Desire to support restaurants still burns hot
A significant silver lining of the horrors of the last 16 months has been the public’s desire to keep supporting small businesses. It’s been evident via a number of facets, and one has been consumers’ willingness to keep ordering from local restaurants (albeit often via different methods) to ensure their community is still seeing business.
In The Fifteen Group’s survey, 28 per cent of consumers ranked the importance of supporting restaurants post-COVID-19 as a 10 out of 10.
“We’ve basically had a year-and-a-half of the entire population hearing how bad the restaurant industry was hit and they are sympathetic to it,” notes Hopkins. “Consumers are responding to that: we’ve already gotten some feedback from clients and the market on the whole that people are spending well in restaurants and not holding back. They’re keen. It seems like average cheques are higher and people are splurging a bit more.”
Hopkins acknowledges there is a risk that bump in spending could be a short-lived measure, an exuberant response from people who have been “cooped up for awhile”, as he puts it. But all the signs are positive for the future. While there is some hesitancy from a proportion of the population – mainly, as expected, the elderly or otherwise at-risk – people generally crave days or evenings out, the experience of eating at a restaurant.
“I still feel like we’re going to go back to our old ways pretty quickly,” says Hopkins. “Give even those who are hesitant right now three or four months of not hearing about COVID-19 every day in the news and they’ll probably pretty quickly forget about it. Even the staunchest supporters of the lockdown are done with it. There’s only so long that you can keep a very social animal locked down.”
Takeout set to keep thriving
While these are conclusions that Hopkins says have been visible for a while through the pandemic, the survey did throw up the odd surprise.
COVID-19 has seen a huge spike in the uptake of off-premises ordering and consumption, and that was to be expected. Things were already trending that was pre-pandemic, and through COVID-19 it has been necessary with dining rooms closed. There have been other factors at play, too, not least the proliferation of convenient choice for the consumer as a result of a rapid period of technological innovation on the operational side of the industry, wherein many restaurants have taken up online or mobile app orders for the very first time.
While Hopkins notes it’s not in itself surprising that delivery and takeout will continue to make up a larger per cent of sales in 2022 than in 2019, he was shocked to find that over half (52 per cent) of respondents said they intend to keep ordering takeout to the same level that they have been during the pandemic, even with dining rooms reopening. “I thought that would be like 5 per cent, the size of that proportion was surprising to me,” he adds.
That may pose a challenge for some establishments, particularly higher-end restaurants, whose modus operandi revolves around a high-quality menu and a refined guest experience. That is incredibly hard to replicate via delivery – food goes cold or otherwise deteriorates during transit and the dine-in value proposition experience is lost, and that can affect a restaurant’s branding and reputation.
For Hopkins, takeout is still not necessarily for everyone in the industry.
“We’re hearing now that restaurants have to do delivery, it’s the way of the future, but while high-end restaurants could do it if it’s a fit, they have to do it right: make it exactly representative of their brand and experience. It will be a tough decision, but some restaurants may still benefit from acknowledging that delivery doesn’t represent them and what they do..”
A new level of guest experience
Ultimately, in a world where the parameters have changed, particularly with respect to health, safety, and consumer confidence, offering an elevated guest experience is more important than ever. Hopkins descrives the current climate as a huge opportunity for restaurants to “reset the bar”.
Operators need staff training, must ensure their menus are 10 out of 10 and that sanitization procedures are all happening, he says. Historically, restaurants have always tried to keep labour costs low. Now, though, the priorities are somewhat different and restaurants must funnel some of the extra margin from price increases back into training and staffing to make sure the guest experience is elevated.
“The guests are coming back, they’re definitely looking for a great experience,” Hopkins summarises. “When you haven’t gone to a restaurant for a year and you’re craving it, you’re remembering the great restaurant experiences. You’re not remembering the average ones or most of the crappy ones. That’s what restaurants must create now.”
In essence, the entire guest experience now plays into health and safety. A satisfied patron will likely feel safe and comfortable in a restaurant environment; if the guest experience is mediocre, they may start doubting health and safety protocols.
“There’s a real direct tie between an elevated guest experience and making the guest feel comfortable about their health and safety proposition in your restaurant,” concludes Hopkins.
This summer is a pivotal point on the road to recovery. For operators, it’s time to ensure you are acquainted with the current demands of the market and the consumer, and to set yourself up for success.