Gastronomy among the industries most hit by Corona. How can restaurants and bar face this crisis and which ones are creative ways to go back to a new normal?
Reading Time: 2 minutes
COVID-19 has drastically impacted and, in a lot of cases, halted industries on a global scale. Diminished purchasing power and dwindling disposable income has also created massive uncertainty in the way people decide to invest their money, even on the day-to-day basis.
The Gastronomy, and food industry in general, has faced a dramatic shift during the outbreak. Whereas previously, an average of 44% of the household’s food spending went towards dining outside the house, this percentage has dropped to close to zero with restaurants being forced to shut down.
Restaurants have adopted strategies to try and mitigate the impact this has had on their profits by offering delivery and takeout services, but the numbers simply don’t come close to covering lost profit of closed doors. But what if there was a way that restaurant and bar owners can plan to rethink their day-to-day business operations once we emerge into a “new normal” that currently has an undefined deadline? What does that mean for the restaurant industry?
For now, it seems that:
- Restaurants will operate at low seating capacity, depending on the enacted federal regulatory measures.
- Ghost Kitchens will prevail as delivery and take-out continue to dominate the means of consumption in regards to dining. Such dining providers are accustomed to generating a profit without the need to fill tables.
- New revenue models will need to be enacted to compensate for the loss of foot traffic, since it is estimated that an average of 50% of seating capacity limitations will be enacted in order to take precautionary and preventive measures in case of another Covid resurgence.
Throughout Europe, many restaurants and bars are closed during the day, meaning the majority of their profit is generated during dinner time, with the exception of weekends. The idle morning hours are simply not profitable enough for the businesses to stay open during these times.
New concepts help location owners to make more profit
This gives way to mutually-beneficial partnering opportunities. There are many options of revenue-sharing models out there with companies that are focused on finding ways to better utilize spaces that would otherwise be empty, using revenue-sharing models. Twostay, a startup coworking space currently located currently throughout Munich, has been enacting this method since the start; partnering with under-utilized urban spaces, such as bars and restaurants, that are typically closed during the day. The operation forms a win-win for both businesses in the following senses:
- Financial benefits: Revenue-sharing models release the financial burden caused by aspects such as idle hours on both businesses. Since expensive real estate and expensive kitchen equipment are two of the top financial concerns for restaurant and bar owners, shared revenue is an option that can help reduce the fixed costs related to starting a business within the gastronomy sector
- Increased exposure and foot traffic:Strategic partnerships between small businesses, specifically businesses which are not direct competitors, yet share a similar or overlapping target market, can create immense opportunity for both parties.Existing customers and consistent communication efforts on both ends can lead to exposure to an untapped market for small businesses looking for growth opportunities.
- In many large German cities, such as Munich where Twostay is currently located, commercial real estate is scarce and pricey, adding to the value of co-operative partnerships.
If you are a restaurant or bar owner and are interested in learning the specifics regarding any of the above mentioned opportunities, please feel free to contact us at email@example.com with your questions.