Coronavirus Pandemic

Restaurants face grim future: Chope survey

Vianney Massot Restaurant's takeaway meal, Pyrenees lamb leg with rice pilaf (above); and Alma by Juan Amador's beef burger and brownie (left), one of its lunchbox offerings.
Vianney Massot Restaurant's takeaway meal, Pyrenees lamb leg with rice pilaf (above); and Alma by Juan Amador's beef burger and brownie, one of its lunchbox offerings.PHOTOS: ALMA BY JUAN AMADOR, VIANNEY MASSOT RESTAURANT
Vianney Massot Restaurant's takeaway meal, Pyrenees lamb leg with rice pilaf (above); and Alma by Juan Amador's beef burger and brownie (left), one of its lunchbox offerings.
Vianney Massot Restaurant's takeaway meal, Pyrenees lamb leg with rice pilaf; and Alma by Juan Amador's beef burger and brownie (above), one of its lunchbox offerings.PHOTOS: ALMA BY JUAN AMADOR, VIANNEY MASSOT RESTAURANT

The situation is dire in the food and beverage scene, but some restaurants have implemented measures to raise revenue, such as offering takeouts

The statistics are grim: 93 per cent of restaurants have seen a dip in revenue, 78 per cent are not prepared to last longer than six months if things do not get better, 80 per cent are reducing staff to cut costs and a third have asked full-time staff to take compulsory leave.

This is what restaurant owners here are facing, judging from a survey done by Chope, a restaurant reservations platform, of 249 dining establishments here.

Chope, together with Professor Sherri Kimes, Emeritus Professor of Operations Management at the Cornell University School of Hotel Administration, and a visiting Professor of Analytics and Operations at the Business School at the National University of Singapore, have written a white paper on the impact of the coronavirus pandemic on the food and beverage scene here.

Food and beverage contributes 0.8 per cent to Singapore's gross domestic product. The estimated 12,000 restaurants here employ 200,000 people, whose jobs are now in jeopardy because diners have vanished in the time of coronavirus.

By all accounts, diners were spooked when Singapore raised its Disease Outbreak Response System Condition alert to orange on Feb 7.

The scene recovered somewhat, only to be hit again the week of March 23, when the Government mandated safe distancing in restaurants, and parties of more than 10 were not allowed. Bars, clubs and other entertainment venues were also told to close.

The Chope survey showed that Chinese restaurants were hardest hit and have had a tough time recovering. It surmised that this could be because of the communal nature of these restaurants, especially those which specialise in hot pots.

Restaurants and cafes with outdoor seating reported an increase in reservations, with people who work from home using them as offices.

Reservations from tourists also fell, in line with the fall in tourism numbers.

Those who responded to the survey are asking for rental rebates and waivers from their landlords during this time. They cite the example of Jewel Changi Airport, which is offering restaurant tenants a 50 per cent reduction on gross rent, and mall owner CapitaLand, which is giving 1,000 tenants rental rebates over two months.

They are also asking for more marketing programmes to bring traffic to malls and be given flexibility to shorten opening hours.

From the Government, they are asking for a suspension on foreign worker levy, more subsidies and grants, an "aggressive" job credits scheme, a bridging loan programme and an extension of training grants.

  • 80% of the 249 F&B spots surveyed are reducing staff to cut costs

    78% of the 249 F&B spots surveyed are not prepared to last beyond six months if things do not improve 

Meanwhile, restaurant owners have implemented measures to raise revenue, with 54 per cent of survey respondents trying out time-based discounts.

Some 44 per cent of respondents have tried out targeted discounts to particular groups of people or those who live or work near the restaurant.

By far the most effective method, however, was one-for-one discounts, which was implemented by 28 per cent of respondents.

Although bookings for corporate events have dried up, diners showed they were still up for eating out for special occasions. For example, Valentine's Day came a week after the alert was raised to orange, but Chope reported that reservation numbers exceeded its year-on-year trend for the period by 31 per cent.

The least effective method for raising revenues is offering deliveries or takeouts, to diners who want to distance themselves socially.

Some 41 per cent of the restaurants had tried this and it is gaining in popularity, despite it being less than ideal for raising revenue. Restaurants, whether casual, mid-range or high-end, are making their food available for delivery or takeaway.

Three-Michelin-starred restaurant Les Amis in Shaw Centre, for example, is offering a $150 nett roast free-range French chicken for takeaway. It comes with asparagus and chicken jus.

One-Michelin-starred Vianney Massot Restaurant in Hongkong Street is offering legs of milk-fed lamb from the Pyrenees, pan-seared and slow-roasted. Side dishes include pilaf rice and mini croissants and baguette. The set, good for four to five, costs $200++.

Another one-Michelin-starred restaurant offering takeaways is Alma by Juan Amador in Goodwood Park Hotel, which is offering 50 box lunches a day from Tuesdays to Thursdays for $29+. It will donate 10 per cent of the revenue from the lunch boxes to the National University Hospital.

Chinese restaurant Peach Garden, with seven branches, is offering takeaway and bento sets at some of its outlets. A $9.90 nett bento set comprises two dim sum items, a meat or seafood dish, a vegetable dish, a main course, complimentary fruit, dessert and a drink.

Prof Kimes, an expert in revenue management, recommends that restaurant owners stay calm and look for solutions.

She suggests drawing a long-term plan to deal with a recession and to look at the impact of the plan on customer and employee satisfaction and the long-term image of the restaurant.

Owners should also be wary of broad scale discounting because of how it can be difficult to go back to pre-crisis prices.

Restaurants with loyalty programmes instead should mine their database to send targeted promotions to members and tell them about special events. Restaurants should also not cut their marketing budget as it is an essential tool to maintain current diners.

She also suggests marketing partnerships with hotels to offer staycations and working out special packages with social organisations and schools.

A version of this article appeared in the print edition of The Straits Times on April 01, 2020, with the headline 'Restaurants face grim future: Chope survey'. Print Edition | Subscribe