Food and beverage businesses which didn’t sell to customers online suffered during lockdown. Pubs, cafes and restaurants were closed, offices shut, and restrictions placed on non-essential travel.
Lockdown put pressure on pubs and restaurants by turning the economics of brick and mortar businesses on its head. Over the last decade, costs have risen and prices have fallen. Margins were squeezed, and restaurants forced to pack in more customers in less space and make them eat faster. This optimisation meant that some businesses could operate in places with high rental costs. However, new social distancing rules means fewer tables, fewer covers and a massive drop in revenues.
Customer behaviour has also changed. A recent YouGov poll showed that only 54% of English pub goers would feel comfortable buying any kind of food at a pub, with only 39% feeling comfortable with ordering at a bar. Some pubs and restaurants have reopened, but relaxing legislation and concerns around safety has meant that consumers aren’t yet heading back in large numbers. Despite the apparent success of the Eat Out to Help Out scheme – the government voucher programme will expire this week, and the future remains uncertain. On-premise sales remain 34% down on last year.
Pubs and restaurants which have used outside space to facilitate socially-distanced dining will not have this option as the seasons change and winter bites.
With schools to reopen, the government is proposing to shut down pubs to rebalance the rate of reinfection. Pubs and restaurants are a perfect target as reinfection statistics are showing they are a cause of transmission.
The bottom line is that the outlook for pubs and restaurants who generate their revenue from onsite consumption isn’t looking good. The good news is that those same businesses have a big opportunity with the rise and rise of the takeaway market, which has seen growth of a 20% increase in sales since last year and is expected to rise.
Anywhere with a commercial kitchen and staff can sell on Deliveroo, Just-Eat and UberEats quickly and operate under a virtual brand.
Pubs and restaurants should now be considering how to enter the delivery market to help protect their businesses.
If you’d like to get online with one of our virtual brands. Don’t hesitate to contact us. Or if you already have a brand online and you’re selling directly, why not talk to us about our 30 Day Programme that will increase sales online in a month.