How Corona Virus Exposed Restaurants and is Paving the way for the Future

In this entry there will be good and bad, but how you decide to digest this information will determine how well your outcome will be moving forward. So based on the title, how did the Corona virus expose restaurants? How is it possible that a virus, especially one that's caused so much disruption in our lives, doing a good thing and paving the way for the future?

One must understand some common issues with restaurants. The biggest one is that restaurants run on a slim profit margin. Studies show it as low as 3% - 6%! That's not a lot of cushion in the event that a societal disaster strikes. Another issue is that their operations (way of doing things in general) aren't effective enough to be efficient, costs to, improve that profit margin, or increase sales.

We've been keeping tabs on the people in the industry since day one through various online groups and social media forums. All these common issues with restaurants are hitting everyone hard. It's become more apparent how, in the modern era, restaurants, as we traditionally see them, are quite obsolete.

Put down your pitchforks, I'm not saying we should demolish dine in restaurants, but what I'm leading up to is that in the wake of this pandemic, a new breed of restaurant will emerge. This will also be in the wake of many, MANY, long standing restaurants you know and love shutting down for good. We certainly believe strongly in the Pareto Principle (80/20 principle) and think it will apply flawlessly to this situation. 80% of restaurants will join us in the modern era by restructuring their business, example: fully embracing and mastering online delivery, meanwhile when the dust settles, 80% of restaurants will close for good. This will create a vacuum which will then be filled by the new generation of restaurants.

These restaurants will be structured to have profitable & efficient operations while also serving quality food. At the top of our head, we see what's happening now and see a couple changes coming possibly. First, dining areas will shrink. Now that establishments are solely reliant on takeout and delivery, they are seeing just how reliant they were on dine in customers. Smaller dine in area mean less dependency, less square-footage cost, etc. Plus we don't know how social distancing will affect people so it's possible crowded areas will be a turn off for people. Second, there could be a rise in more efficient business practices to turn over customers quickly. An example here is using kiosks to let people order for themselves instead of wasting precious time waiting on a server. On the flip side, the process of turning over a customer will become more refined and enforced (no time for lollygagging servers, get to work!). The last thing we predict will happen is the new gen restaurants will follow suit like many other recent restaurants we've seen opened in the past 5 - 10 years and have a larger price tag on their menu items. There are many restaurants locally that try to compete on price only have one or two locations, while those who are more expensive (sometimes by double the amount) have ever expanding locations. The list could go on and on, but you should get the point by now that restaurants need to change. In an ever changing and fragile world, restaurants need to become more flexible and be able to sustain their business on multiple things rather than heavily relying on one form of transaction to keep them alive.

It's time for restaurant owners to REALLY start thinking out they are going to become legitimately profitable. They can look to restructure for opening more locations or focus on making their one location irreplaceable, but the change needs to be done. Otherwise, the new wave of restaurants will replace the old generation restaurants that barely survived the pandemic.

You may read this an dismiss it as us bashing restaurants or you can swallow this difficult pill and get to work figuring out ways to transform your restaurant to become stronger an disaster-proof.


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