How planning, diversification, and reassurance can help food and drink businesses survive post-lockdown
For restaurants, bars, pubs and cafés across the UK, enforced closure in the face of the COVID-19 crisis has created unprecedented challenges, and uncertainty as to how a new “socially distanced” reality might actually work has not helped matters.
Not surprisingly, the news is full of predictions that many businesses may close,1 even after phased re-opening commences on 4 July. Although the government guidelines around COVID-19 Secure Status for food and drink business are yet to be released, there does seem to be a glimmer of hope.
New research2 found that more than half of consumers (53%) plan to support local restaurants and cafés after lockdown by spending more. Meanwhile, a report from CGA AlixPartners suggests that local pubs and restaurants, which have endured a tough few years, could emerge as winners from the coronavirus crisis as consumers prefer to visit local establishments before heading back to city and town centres.1
A new reality
Customers may want to support local bars and eateries, but huge challenges must still be overcome if restaurants, bars, and cafes are to re-open successfully.
First of all, with government guidance for safe re-opening yet to be published, there is real uncertainty as to how the new reality for these businesses will look; how to implement social distancing, hygiene, and safety measures, and whether socially distanced premises will even be financially viable.
So, what can food and drink businesses do to navigate these challenges, and ensure their re-opening is as successful as possible?
Capacity planning and financial forecasting
In an industry where profit margins are typically relatively low, social distancing represents a serious problem – potentially reducing seating capacity by as much as 70%.3
With that in mind, it is vital to plan ahead. Think about how the need to keep staff and customers a minimum of one metre apart, the closure of restaurant bars, and a ban on standing in pubs might affect sales. For instance, work out how many people might be on the premises under normal circumstances, how much that is reduced under social distancing and, therefore, how sales and income will be affected.
There are costs to consider too – the additional cost of increased hygiene measures, safety screens, personal protective equipment, and security personnel to manage social distancing for instance. All these costs should be factored into the realities of re-opening.
Similarly, it is vital to stay in touch with suppliers to understand how your ability to buy stock might be disrupted. Also, think about the specific needs of all your staff, particularly those in vulnerable groups – to work out which staff members you can reasonably ask to return to work and how many you might need when capacity is reduced.
All these insights will help you to forecast how the business might perform after re-opening, identify and plan for issues – even work out when to re-open as circumstances change.
Diversify to make up the numbers?
During enforced closure, many restaurants, cafés and bars have operated takeaway and delivery services as a means of maintaining an income, albeit much reduced. In fact, according to Deliveroo, more than 3,000 restaurants signed up to its delivery service in March alone , while many set up impromptu services with delivery carried out by their own staff.
Meanwhile, 71% of consumers4 said they thought agreed deliveries from their local pub or restaurant could be seen as an essential service during the pandemic.
So, diversifying to offer takeaway and delivery services, or continuing with services already established, could offer a mean to replace some of the income lost through reduced capacity on site and – for now – it is relatively easy to do. At present, and potentially for the next year, there is no need to apply for planning permission to operate takeaway services.4
For those wishing to avoid paying relatively high commission (up to 30%)5 to well-known delivery service companies, is to investigate whether it is worth doing these deliveries themselves. For now, some insurers seem willing to allow the use of employee’s own vehicles, provided “carriage of good” and “business use” is added to their personal car insurance policies.
However, as road use increases, cars may become less viable delivery vehicles and those wishing to invest in bikes and mopeds may find it hard to secure insurance cover – insurers typically are not willing to cover what they see as a high-risk activity. Equally, if orders and payment are being taken online, it may be necessary to take out cyber insurance to help defend against issues like fraud and hacking – particularly if customer financial details are being stored.
It is important that anyone diversifying in this way must inform their insurer – and possibly set out how they plan to ensure food deliveries are safe and hygienic – to avoid issues later.
Assess, manage, and monitor risk
Back on the premises, ensuring restaurants and bars are as safe as possible for staff and customers will be priority – not to mention a condition of being allowed to re-open at all. The government has yet to set out detailed guidance for premises planning to re-open, but a number of measures over and above social distancing seem likely – from table service only and queue management, to increased hygiene routines and more prosaic measures like removing condiments from tables.
But even before specific guidelines are released, it is possible to make a start – and everything starts with a risk assessment. According to the Royal Society for the Prevention of Accidents (RoSPA),6 this means:
- Identifying the activities or situations might cause COVID-19 transmission.
- Thinking about who could be at risk.
- Deciding the likelihood of someone’s exposure.
- Acting to remove the activity or situation or, where this isn’t possible, control the risk.
While that means looking at every aspect of the business and interaction between staff and customers, it is important to focus on high traffic areas like doorways, toilets, and stairways, as well as high transmission risk items like tables and cutlery. Managing the risk will include deciding whether personal protective equipment is required and available in sufficient quantity, and increasing the frequency of cleaning routines – possibly using odourless products7 to help ensure the smell of disinfectant doesn’t damage the customer experience.
Clearly, social distancing represents the biggest challenge – not just in terms of reduced capacity, but in terms of the overall ambience too. But this may also be a chance to innovate – from miniature greenhouses for diners, to seating mannequins at empty tables, a number of restaurants are already coming up with novel ways to overcome the issue.
Reassure staff and customers
Despite their intention to support local bars and restaurants, consumers are nervous about returning. A recent poll8 found that around 63% of consumers would be uncomfortable returning to bars, cafes, and restaurants after lockdown. Similarly, another survey11 found that 44% of employees are anxious about going back to work because of the health risks posed by COVID-19 to them and those close to them.
To that effect, it seems that reassuring customers and staff it is safe to return will be a key challenge and communication will be vital here.
Provided risk assessments have been completed and all necessary steps have been taken to manage risk, then open, honest communication will play a central role in allaying staff and customer fears. That could mean simple measures like displaying a COVID-19 Secure badge and, more importantly, setting out for each group the steps that have been taken to help keep them safe while queuing and on the premises. For customers, social media platforms like Facebook, Twitter, and Instagram can prove effective as a means of communicating that the business is open and the steps that have been taken to keep them safe.
Meanwhile, constant, friendly re-enforcement of social distancing measures while queuing and in-store will help reassure everyone that you are taking their safety seriously.
Review your insurance
For restaurants, bars, and cafés seeking to re-open, insurance cover will be as important as ever. For instance:
- Property cover to step in if premises are affected by incidents like fire or flood.
- Public liability cover to help with potentially expensive liability claims if someone is injured or falls ill while on site or consuming takeaway food and drink at home.
- Employers liability to help with things like legal defence costs and compensation if an employee is injured or falls ill at work – and which remains a legal requirement.
As things stand, insurers have indicated that existing insurance arrangements will remain in force, provided government “COVID-19 Secure” recommendations are implemented, documented, and monitored. Equally, it is important to ensure staff are comfortable to return, a risk assessment is carried out, and proper safety and sanitation measures are in place.
Check with your insurance broker if you are unsure, particularly if the business has diversified or adapted as part of any plan to re-open.
Further information on insurance for high street businesses during the pandemic is available here.
Work with neighbouring businesses
Local independent bars and restaurants may also be able to draw on combined efforts to both overcome issues and help make re-opening a shared success – drawing on goodwill amongst locals.
For instance, orderly, well managed, socially distanced queues outside bars and restaurants – even though it’s likely many will be reservation only - are perhaps the most visible clue for consumers that businesses are taking safety seriously. But how will multiple queues on the same high street actually work? Will queues from neighbouring bars get in each other’s way and impact on safety?
The answer may be in working together, sharing plans for queuing to ensure that not just individual queues are safe, but that the high street feels safe too – with the independent food and drink businesses leading the way.
On a more positive note, high street bars and eateries may also seek to work together to capitalise on local goodwill. For instance, running campaigns to encourage diners to support local restaurants and cross-promoting between neighbouring bars and restaurants to help amplify changing habits as we emerge from lockdown.
After all – we are stronger together.