Consequences of the COVID-19 pandemic for the catering industry

Summing up the effects of the pandemic on the economy, economists often divide industries into three groups - those which suffered the most and those which suffered less as a result of subsequent lockdowns and those which gained from the pandemic. Among the former, the most frequently mentioned are restaurants and hotels and guesthouses, whose catering offers are an important part of their services.

It is often said that catering is bleeding out. The closure of restaurants has not caused a rash of online orders. The Corona Mood Gfk report from March 2021 shows that the average value of a delivery order is PLN 69, and there are on average 1.4 such orders per month per consumer. The figure is higher in metropolitan areas - 2.6 - but in rural areas it is less than one order per month. Only 15 percent of respondents use the offer of takeaway restaurants once a week or more often. The Briefly report, on the other hand, shows that before the pandemic, 40 percent of restaurants had delivery - now it is just over 60 percent. In March 2021, compared to the period before the pandemic, 8 percent of outlets were closed, and one in four suspended operations.

We have all felt the impact of the pandemic, which has changed the way we work, shop and spend our leisure time. The virus has shown how important it is for companies to be able to react quickly to changes in their environment, such as the change in working and communication patterns forced by lockdowns.  

Although the catering industry has been hit hard by the COVID-19 pandemic, it is coping with customer service much better than other industries not least because many of its representatives are quick to react to the new reality and 'take on life'.

How has the pandemic changed consumers and restaurateurs?

The crisis has forced restaurateurs to manage their finances more effectively, organise their work better, become less dependent on takeaway delivery tycoons, communicate more efficiently with their staff and be more active in social media and e-commerce channels.

The pandemic has also changed consumers. It has made them look more carefully at what is on their plates. It has become important for many people to take care of their immunity, which is largely built through healthier and more varied eating. As a result, there is an ever-growing interest in a plant-based diet, in the composition of dishes and the quality of ingredients used. 

Consumers are also paying more and more attention to what disposable food accessories are made of and the dishes in which their meal is served or delivered (this mainly concerns the environmental performance of the materials used). Taking care of ecology is another argument loyalising the growing number of conscious consumers.  

The preference for local brands is another of the most visible consumer trends today. This is linked to the desire to support local businesses, but also to the need for security and a sense of familiarity. Combining locality with the idea of "cloud cuisine", i.e. the concept that a given restaurant only accepts orders placed via the Internet through an application or a website, is an interesting idea for the development of dishes that respond to the needs and preferences of customers from a given area, while optimising operating costs and following the trend of locality by establishing cooperation with local suppliers. 

Another answer to the pandemic is to simplify menus. Experts predict that they will become a permanent fixture in many restaurants, even after the crisis, and restaurants will increasingly slim down their menus, invest in local, readily available ingredients and evolve towards specific dishes. If these predictions are confirmed, we will soon be able to see more diversity, because restaurants will not focus on specific cuisines, but on specific dishes, ingredients or ways of processing them.

We are also seeing a significant increase in the number of mobile catering outlets - a catering trailer, a mobile container, a special trolley or a bicycle are all formats that can be set up very quickly and also moved to another location to follow the customer. This is an example of great flexibility at a relatively low cost for the owner of such a point.  

Many restaurants have expanded their offer to include a shop where you can buy preserves, semi-finished products and accessories to prepare your favourite dishes at home. The quality and reputation of the restaurant is guaranteed here and the products testify to the creativity of the master chef (e.g. "Żurbonara" - a thick pasta sauce based on reduced sour soup with smoked bacon or kimchi with boletus at Baron The Family). An interesting solution was found by Ed Red, who closed his restaurant in Warsaw and very quickly switched to the production of tinned meat, i.e. de facto he does what he used to do before, only he sends his products home. All you have to do is reheat the cans, add some groats and you end up with a dish that tastes the same and has the same meat consistency as what you would get in a restaurant. The offer includes dishes that few people would be able to prepare themselves at home, such as confit duck with apples, BBQ ribs, boeuf bourguignon, beef cheek in demi glace sauce, butcher's steak in pepper sauce or duck stomachs in tarragon sauce. 

The crisis has also shown the power of social - those eateries that built good relationships with their guests through social media before the pandemic are doing much better in the crisis. But traditional social media activities were not enough to sustain this valuable relationship. Therefore, quite a few restaurants, but also other entities in the catering industry, decided to launch original, creative initiatives in social media channels, such as cooking lessons or online joint cooking, and organising tasting festivals preceded by home delivery of tested products. This type of initiative is a great opportunity for the catering industry to maintain stability and customer loyalty even after the crisis, and may become a permanent feature of the offer through hybrid activities. 

 

The pandemic also forced a change in the attitudes of restaurant owners, who instead of competing started to cooperate, respecting the customer's right to choose and offering a complementary offer (e.g. when buying a burger at Krowarzywy in Warsaw's Ursynów district, you could receive a discount voucher for coffee and cake at the nearby BRU Cafe). Online, we also see a lot of solidarity gestures between restaurants recommending each other - and when Burger King and McDonald's do it, we know that this world is changing irrevocably before our eyes.

Internet uprisings based on the sentiment and patriotism of local consumers have saved more than one restaurant from collapse - a spectacular example of this was the action organised for Rurki z Wiatraka, which has existed since 1958, but due to the coronavirus pandemic its fate was once again in question. A heartbreaking appeal was posted on the Facebook page of the capital's sweet spot, which was shared over 8.5 thousand times, and Warsaw residents rushed to buy cream rolls and waffles, took photos with the saleswoman and shared them with their own appeals asking people to shop there. Thanks to such actions, both Rurki z Wiatraka and many other places in our cities have a chance to survive the pandemic.

Another gesture in support of restaurants that more and more consumers are opting for is to bypass courier companies and apps when placing orders and to collect them in person, so that all the proceeds from the preparation of the dish go to the bar or restaurant and are not significantly depleted by the middleman. 

The aforementioned consumer behaviour points to a growing awareness and insight among consumers, who themselves, facing various crises and pandemic challenges, are beginning to be more empathetic towards producers and service providers, seeing them as people facing the same problems. The effect of the crisis is also greater insight and curiosity on the part of consumers in understanding how different industries function and how costs and earnings are distributed along the various stages of the so-called supply chain. This has resulted in a change in consumer attitudes - more and more consumers want to reward with their loyalty those who are transparent and honest in their business.

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Krzysztof Badowski

Krzysztof Badowski

Partner, Strategy &, PwC Poland

Tel: +48 608 333 277

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