This past weekend meant the beginning of dine-in trading for hospitality businesses since they were forced to close on March 22nd. While delivery and takeaway were allowed during the three-month hiatus, most businesses rely on the dine-in contingent for the majority of their sales. That being said, what was the first weekend of trading in this new world like?
The industry is slowly coming back to life. According to KAM Media, 28% of adults went to pub this weekend, a promising number showing people are keen to get back to eating and drinking with others. For the most part, restaurateurs reported that people were cautious, sensible, and respected social distancing measures. However, it is certainly something new to get used to. Social distancing, no ordering at the counter and contact tracing methods are just some of the new requirements in place that might need a bit of an adjustment period.
What do the numbers tell us
According to Tenzo data, year-on-year sales were down 54% last weekend across the industry. While this number may at first seem low, it’s worth remembering that at its worst, in the week prior to closure, sales were hovering at around 69% down year-on-year. Additionally, 54% represents the industry as a whole including both open and closed locations. It looks like only 63% of the sector was open this weekend. Once you take that into account, like-for-like sales were actually only down 28%.
Broken down by industry, like-for-like sales in pubs were down 20% year-on-year, QSR’s were down 26%, and table service restaurants were down 20%. Cafes struggled the most this weekend with like-for-likes down 49%.
Looking to the future
These numbers bode well for the future. There were always going to be people who wouldn’t venture out at the first opportunity but it looks like a good proportion of the population did. Unfortunately, the few people who took it too far on Saturday, like those we saw in London’s Soho, will make people feel apprehensive about going out if they believe others aren’t following the rules. The best thing to do to overcome this is just to enforce the rules as strictly as you can.
The news yesterday that the government will be lowering VAT to 5% from 20% will also have a huge impact on the industry and the viability of keeping the doors open. And for the restaurants not yet reopened, the voucher system that will come into play in August may be the nudge they need to start operating again. Hopefully these schemes will also encourage more and more people to go out and enjoy the hospitality sector again.
The reality is the hospitality industry is going to have to get used to a new normal when it comes to operating and will have to learn not to rely solely on dine-in traffic. Diversifying your channels is going to be the best way to cater to those who are keen to go out and eat again and to those who still feel uncomfortable with the concept.
We might also see that there are better ways of doing things. Past trends of not accepting reservations and prompting huge queues may be a thing of the past; massively crowded pubs spilling out onto the streets every Thursday, Friday and Saturday might also have to go. However, the whole experience of lockdown might teach us all to appreciate restaurants even more so than before and to show that appreciation by opening our wallets.
It’s clear that although people miss restaurants and that they are willing to go out and eat again, the road to recovery will be long. This weekend was just the start - once the initial shock of reintegrating society is over, more and more customers will venture back to their old haunts. However, there is an opportunity here to consider how we think about hospitality. Restaurants, pubs, bars and cafes are often at the centre of the community - places where people come together and enjoy life. This should be encouraged, but at the moment the tax burden and high rents mean that operating a restaurant may not be all that sustainable. Hopefully this time will encourage changes in both respects.
If you have yet to reopen and would like to talk to us about your strategy, feel free to email firstname.lastname@example.org.