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F&B business survival guide for COVID-19 in 2020

Starting from the outbreak of global pandemic from China Wuhan province, the word coronavirus (WHO officially coined the SARS liked virus as COVID-19 on Feb 11, 2020) is a familiar term now. But the panic and disruption it has brought upon, rapidly spread across the globe especially in Asia region.

Singapore is within the top 5 in the list of the number of infected patients globally because of the status as an air traffic hub and tourism is one of the focus industries where visitors around the world visiting Singapore throughout the year. It was our advantage for being a tourist-friendly country but we are exposed to the risk of widespread of the infectious virus now.

3 months since the outbreak, most of the businesses in Singapore have started to feel the negative impact of significantly lesser diners and our PM, Mr. Lee has also emphasized the possibilities of negative economic growth for 2020.

Tourism, hospitality, and retail industries are at the first to hit with the rapid decline of visitors, hotels experience lower occupancy rates, retail outlets, and restaurants receive fewer customer and footfall traffic.

In this article, AskEdmund F&B consultant would like to share with you some of the strategies to cope with the situation as we know the F&B business is facing this crisis on all fronts!

What should you do to ensure your business survives?

1) Managing People

People are the center of F&b business both internally (staff, shareholders) and externally (customers). During the time of crisis, it is important to manage higher expectations especially on the hygiene of your front line staff and the venue and so your customers get a sense of safety and able to dine in peace.

One great example is to provide hand sanitizer for your patron or any passed by traffic. A little more cautious may reduce the chances of infection of your staff and give your customers the impression that you take hygiene seriously and their well being is your priority.

Take a look at following pointers that we shortlisted for you,

  1. Ensure the well being of your staff both front of house and back of the house (image and perception)

  2. Ensure a higher level of hygiene and cleanliness on-premise and in the preparation of food & beverages (prevention of a worsening situation by risk management, checks, education and improving processes)

  3. One great example is to provide hand sanitizer for your patron or any passed by traffic. A little more cautious may reduce the chances of infection of your staff and give your customers the impression that you take hygiene seriously and their well being is your priority.

  4. Rearrange your movable furniture, make it comfortable and the less close proximity of tables to one another (Caring about your consumers' safety, also you can control the flow of customers in the equation to you staff strength or cost that you can afford)

2) Managing Cost & Maximizing the returns from the lower Revenue

Considering the macro-environmental effect from the virus that shadowing the economy due to the pandemic. You are unlikely to get a lot of customers for a long period until the public confidence restored.

Besides trying reducing the workforce to cut costs (which has implications to the morale), you can consider other strategies by trimming your menu and reduce the ingredients to simplify the menu, balancing profit margin, lower the food wastage and increase supply chain efficiency.

Here are some tips that we prepare for you.

  1. Take lost leaders items (read about our pricing strategy blog) off the menu, you don't need to bleed further with lower revenue streams

  2. Take community meals off the menu and replace with individual meals (for example, community hot pot to individual hot pot, sharing platters to individual portions)

  3. Take the opportunity to launch a new "promotional" menu that you can minimize wastage and trimmings, have shorter preparation time, avoiding ingredients that are now overly in demand due to shortage, also less holding stock/inventory

  4. Offer packages that encourage takeout and delivery directly or work with your Delivery Vendors (customer don't come to you, send to them)

  5. Japanese concepts that don't usually allow Takeout or delivery, should take this opportunity to look into catering for Take-Out and delivery food, create a takeout/delivery menu for menu items that you are able to keep your established quality levels

3) Managing Business

At the time of crisis, it is even more important to work collectively with an association like RAS (Restaurant Association of Singapore) to negotiate with the landlord for the rental rebate or with the government agencies to facilitate short term financial aid or tax rebates to restaurants and F&b businesses.

Above is one of an example to encourage F&b business to work together with the upstream or downstream of the ecosystems so that it has a greater chance or higher impact across the entire sector. You can also work closely with the people that you liaise with such as your suppliers, banks, POS vendors, landlord, or contractors are within the ecosystems.

Adopting self-ordering technology can be a great advantage now because it is more likely to succeed than before especially since the COVID-19 virus is contagious through close contact, people are likely to avoid crowded places now. And it is safer for your staff cashier to deal with the lesser customer for making a payment or take orders.

These are the few points that we think are important to your survivor strategy.

  1. Renegotiate Rental rebates or waivers for this period with your Landlord (they don't want you to close not during the crisis anyways)

  2. Renegotiate Procurement cost for raw ingredients with your suppliers for this period, work with them how to manage cost by consolidation, par and scheduled orders for delivery and switching to ingredients that are more cost-effective (help each other, builds stronger bonds)

  3. Rework and Manage your operational budgets base on the worst-case scenario, this will allow you to maximize your cash flow

  4. Put aside reserve funding as a buffer and to only be used while all other avenues are exhausted

  5. Change your labor strategy by employing technology in areas that can be independent of human reliance. E-menu ordering / BYOD / Self Order Kiosk etc.

  6. Work with neighboring restaurants to do your procurement in bulk to lower cost

4) Managing Marketable Image of your Business

Your brand is one of the main reasons that you have more walk-in customers compare to the nearby restaurants who compete with you for the same pool of customers.

Just like you won’t set up another fast-food restaurant near to McDonald's trying to compete with them. McDonald as an F&b giant has a well-established brand and a strong brand message “Family-friendly fast food restaurant for ANYONE” that you feel welcomed when you see them.

Being socially responsible is one way to establish a good branding too.

Here are some takeaways for your consideration to exhibit corporate social responsibility and make people feel good about you.

  1. Engage and assist with the community prevention of this pandemic

  2. Be visible in your aid work

  3. Post it on your social media sites as info and blog to share, don't be tacky by showcasing it, be genuine

  4. Involve your business consumers by their contribution and support to the fight... physically, spirit and where possible and feasible monetarily. Everyone wants to be in control and able to do something in times of crisis.

What NOT to do

  1. Raise prices for existing menu items for pure profit even though its about supply and demand

  2. Sell by gimmicks any kind of essentials needed for the fight in this crisis

  3. Using the crisis as a marketing opportunity

  4. Fail in your Hygiene and Cleanliness - human and premise

  5. Fail to Plan for the worsening crises in your budgets/forecast and cash flow

  6. Not caring about your consumers' safety and concerns


AskEdmund is EISOL F&b consultancy services managed by our F&B consultant who has more than 30 years of experience managing chain restaurants. Sign-up our newsletter and follow our blog to learn about best practices for F&b business.

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