The U.S. bar and restaurant sector is in survival mode until the majority of stay-at-home measures have been lifted across the country. Until then, operators that can are relying on curbside pickup and third-party delivery services. They’re also looking for government assistance and help from landlords, experts said on an ICSC webinar called The Shift in Restaurants and Bars During COVID-19.
The experts advised restaurant operators not to change their businesses so drastically during the lockdown that they won’t be ready to operate in the post-lockdown, recession economy. “Take mitigation steps for your business, but don’t do anything you can’t walk back,” said Kevin Rice, chief marketing officer of Hathway, a firm that consults with restaurant operators that are owned by private equity firms.
Phil Colicchio — executive managing director of Cushman & Wakefield’s Colicchio Consulting Specialty Food & Beverage, Entertainment and Hospitality division — suggested operators draw business by offering bonuses rather than cutting prices. “Give them a free cocktail with dinner, but don’t cut your rates.”
Third-party delivery services like Grubhub are crucial for some brands that can’t afford their own delivery infrastructure, but consumers prefer to order delivery from their favorite restaurant brands when they can, Rice said.
And though third-party-delivery services are keeping some small chains afloat now, the fees they charge and the control they keep over customer data can curb an independent restaurant’s long-term profits and success, said Andrew Rigie, executive director of the New York City Hospitality Alliance. “The recovery will be long,” he said. “Third-party delivery won’t be sustainable.”
Smart operators will incentivize in-store pickup, Rice said: “Encourage them do what we want them to be doing when the economy opens back up.”
Government could also step in, Rigie said. “If government has the authority to shut restaurants down, then they should also be able to cap the fees that third-party-delivery services can charge,” he said. “San Francisco did that. We hope New York City will follow.”
The webinar is available here (Chrome works best).
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By Brannon Boswell