Report: restaurants having to adapt

Restaurants uncertain about the future are looking for new ways to thrive, according to a new report conducted by YouGov.

Restaurants uncertain about the future are seeking new ways to thrive, with more than four in five (82 per cent) restaurant owners who stayed open during the COVID-19 lockdowns adopting new ways of working; including new processes, systems, or technology, according to the inaugural Deliveroo HospoVitality Index Report.

Deliveroo’s report was conducted with research firm YouGov, which surveyed more than 500 restaurant owners across Australia to understand business confidence, the challenges they face, how they’ve responded to the COVID-19 pandemic, what government policy initiatives will help aid recovery and their plans for the future.

In exploring how restaurants navigated the national lockdowns, the Report reveals 48% of restaurant owners introduced new staffing and shift patterns, 42% optimised their menus and a quarter (25 per cent) made point of sale changes.

Nine in ten (91 per cent) of Australia’s restaurants stayed open and operating in some capacity, with 74 per cent adopting new revenue streams such as takeaway, delivery, ready to cook meals, adding alcohol options to food orders and hampers.

Of the restaurants that introduced new ways of making money during the COVID-19 lockdowns, 90% said they would maintain some or all of these revenue streams into the future, with takeaway (57%) and food delivery via a platform such as Deliveroo (55%) the most popular.

Looking ahead, restaurant owners said technological advancements in digital ordering and in-store collection processes are the most needed (45 per cent), followed by improved data insights to manage marketing (20 per cent) and developments in advanced online bookings (18 per cent), showing the vital role platforms will have in supporting the restaurant sector.

Nearly four in ten (39 per cent) of restaurant owners are feeling positive about their business prospects today and 26 per cent are concerned (net balance +13), while 30 per cent are positive about their prospects in three months’ time and more than a third (36 per cent) are worried (-6 net balance).

One in five (21 per cent) of all restaurant owners said they didn’t know at what stage they would be able to trade profitably and be viable within the Federal Government’s 3-step Framework for a COVID-safe Australia, demonstrating just how vulnerable many businesses are feeling.

However, more than half (52 per cent) of restaurant owners are optimistic about their own business prospects in 12 months’ time and only 15 per cent are concerned (+37 net balance). This is compared to more negative sentiment towards the sector as a whole. Four in ten (39 per cent) of all restaurant owners surveyed are feeling positive about the future of the hospitality sector, compared with 30% who are feeling pessimistic, giving a lower net balance score of +9.

The greatest challenges impacting business confidence are, equally, the slowing down of the economy and reduced dine-in capacity (each 68 per cent), followed by a reduction in consumer spending (64 per cent) and produce prices increasing (60 per cent).

Government assistance during the pandemic has been vital, with two thirds (65 per cent) of restaurant owners accessing JobKeeper. Of these restaurants, 44 per cent said they would not have been able to keep trading had JobKeeper not been available, equal to those who said they would have.  Two thirds (66 per cent) of restaurant owners sought rental relief from their landlords during the COVID-19 lockdown.

Restaurant owners were also asked to rank the government policies they felt were most important in aiding their recovery. Tax relief was the overwhelming priority (79 per cent), followed by payroll tax (49 per cent) and penalty rates (43 per cent), while more than a quarter (29 per cent) are keen to see a relaxation of regulations for outdoor seating.

Takeaway Tuesday designed to support struggling food sector

The national campaign #EatAloneTogether which was launched by Restaurant and Catering Association (R&CA) in partnership with Entertainment and Unilever Food Solutions (UFS), has evolved into #TakeawayTuesday.

The movement was originally launched in March to support restaurants during the height of COVID-19 restrictions. As part of the campaign, R&CA and UFS declared Tuesday, 19 May as National Takeaway Day, which gathered support from thousands of restaurants who promoted the campaign to their communities and encouraged customers to support their local restaurants and cafés by ordering takeaway.

To help the hospitality industry supplement their reduced dine-in business, and grow demand for takeaway and delivery, R&CA and UFS have evolved #EatAloneTogether into #TakeawayTuesday – encouraging all Australians to place an order every Tuesday in support of local restaurants and casual dining.

#TakeawayTuesday will kick off on 21 July and thereafter every Tuesday, while restaurants across the country are experiencing reduced dine in volumes. NSW has implemented new restrictions to cut patron numbers and Melbourne has been forced into a six-week lockdown as of 8th of July. In the lead up, R&CA, UFS and Entertainment will be building awareness of the day and encouraging the public to order takeaway, pick up or delivery from their favourite local and hashtag them to show support.

Home delivery disruptors cause grumblings among food service providers

Digital disruptors are damaging the restaurant industry by encouraging patrons to stay home and eating into profits, claims a report from Restaurants and Catering Australia (R&CA). Its 2019 annual Benchmarking Report, one of the areas of greatest concern indicated by restaurant, café and catering business owners was the negative impact of digital disruption.

R&CA’s CEO, Wes Lambert, said, “High streets are falling silent and neighbourhood restaurants are push to their limit as delivery services discourages bums on seats. There is only one winner between the platform and the restaurant, the platform wins due to the exorbitantly high fees charged and the restaurants lose as they see their profits decline even as their revenue increases.

“Some restaurants are finding themselves pushed to the brink of closing – a bad outcome for our social precincts, restaurants patrons and, ultimately, home delivery consumers. Others are ditching the platforms altogether,” said Lambert.

“Under the online delivery platforms, where under the ‘partner ‘model, the platform is profitable, and the restaurant is not. Restaurants have been forced into taking on an unwanted business partner they didn’t ask for and who takes a 35 per cent cut. At that rate, meals become unprofitable for the restaurant.

This year’s survey revealed ongoing and significant growth in penetration of online food delivery platforms – 53.8 per cent of restaurants surveyed use online delivery platforms.  That is more than triple the number (15.4 per cent) from the same survey in 2017.  In 2018, the percentage using delivery platforms was 31.2 per cent.

Of the restaurants surveyed, 46.2 per cent said they didn’t use delivery platforms, compared to 68.8 per cent in 2018 and 84.6 per cent in 2017.

When asked which delivery platforms they prefer, 26.2 per cent said UberEats, 22.3 per cent said Menulog, and 3.8 per cent said Deliveroo.  Of those surveyed, 32.3 per cent use combination of platforms and 7.7 per cent use all three delivery platforms.

More than 63 per cent said their primary reason for signing up to a delivery platform was to increase their customer base. Others (32.03 per cent) said they were forced to participate because their competitors were using these platforms.

Respondents overwhelmingly said that they had experienced an increase in revenue but a decrease in profit (53.9 per cent) and 32.8 per cent said they experienced an increase in revenue and profit and 13.3 per cent indicated no change.

More than half (55.5 per cent) said that fees associated with online food delivery were so high that it was impossible to make a profit using the platforms. Only a quarter of businesses (25 per cent) said that platforms provide a convenient service that allows restaurants to increase their revenue and 19.5 per cent indicated they encourage customers not to go out and buy directly from the business.

These answers indicate that more than 70 per cent of businesses surveyed believe that online food delivery is negatively impacting the hospitality industry.

Just over 50 per cent of businesses said they currently used an online booking provider within their business, down slightly from 55.6 per cent in 2018. This remained up from the 41.7 per cent identified in the 2017 survey.

The Fork was the number one response (36.4 per cent) when asked which online booking provider restaurants used. It was the online booking provider of choice among businesses surveyed.  Now book it was preferred by 17 per cent of respondents. Others (13.6 per cent) preferred other online booking providers (13.6 per cent).  While 10.2 per cent named Dimi as their favourite, 9.3 per cent preferred Quandoo 9.3 per cent, 7.6 per cent preferred Opentable, 4.2 per cent preferred Obee, and 1.7 percent said BookBook was their choice.

Online booking providers
Just over half (50.7 per cent) respondents said they used an online booking provider within their business, down slightly from (55.6 per cent) in 2018. This is still up from 41.7 per cent in 2017.  When asked which online booking provider they used, the top response (36.4 per cent) was The Fork.  This was followed by Now Book It (17 per cent), Dimmi (10.2 per cent), Quandoo (9.3 per cent) and Opentable (7.6 per cent).

Social and digital marketing channels
Lambert says, “This is the first year we asked businesses how they use social and digital marketing channels and the impact this has had on their businesses.  This is clearly an important tool for their businesses because a significant number (65.56 per cent) indicated that they spend money in this area.  Facebook was most popular with half of our respondents naming it as their most used marketing tool.”

Payment systems
An overwhelming number of businesses (92.3 per cent) indicated that card payment – either credit or debit card, was the most common payment method, followed by cash (2.56 per cent), then phone touch payment (0.9 per cent).

When asked about payment processing methods, the most common form of card payment was PayPass or Tap & Go, with 79.83 per cent indicating it was the method of choice for customers. This was followed by 12.88 per cent using PIN input, 2.2 per cent using smart phone payment, and 3.9 per cent use online payments (through booking platforms).

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