The Covid-19 crisis has essentially fallen into four phases, so far…
Phase One – lockdown, panic, uncertainty, toilet roll hoarding, confusion and initial government help with grants, loans and furlough.
Phase Two – still in lockdown but many coffee shops and cafes have re-opened in a large variety of ways. This includes online sales, takeaway food and coffee, grocery sales, food prep kits and developments in click-and-collect, delivery. Many have prospered very strongly with reduced overheads, simplified menus and substantial sales.
The quality operators who haven’t been able to re-open have used this time to deep dive into improving their businesses in many key areas. There has been menu development, staff training programmes created, revised operational and financial processes and often some expenditure in new equipment or decorating.
BE PREPARED TO CHANGE
Coffee shop business consultant and regular contirbutor John Richardson outlines the critical next phases for businesses recovering from Covid-19 shut down
Phase Three – post lockdown, but with some sort of social distancing, is where only the strong will survive. With government help tapering off and competition re-opening, from all parts of the hospitality industry, this will involve a pretty hard battle. And with perhaps less than half of the normal seating available this will be a tough time to make profit.
There is now a substantial opportunity for food-driven cafes and coffee shops to take some of the traditional restaurant and takeaway business. In many parts of the country customers have now become used to having part-cooked or fully-cooked meals prepared by their local coffee shops for collection or takeaway – it has become a ‘new normal’ in terms of considering what to eat in the evenings if you’re not cooking.
Phase Four – when we finally reach the ‘new normal’ will see successful operators with more diversified and resilient brands and often further consideration of vertical integration such as roasting or creating their own bakeries and food production units.
They are also likely to consider ongoing ways to reach the customer via various delivery channels – both in house and through the traditional Just Eat/Deliveroo channels.
The severe recession should mean the value and ‘affordable luxury’ provided by coffee shops and cafes will make them more resilient than the restaurant sector. This is what happened and helped fuel the coffee shop boom after the financial crisis in 2008. The caveat to all this is that location will be a huge factor. The opportunities and changed consumer behaviour patterns for those who are located near offices will be much less beneficial than for those in neighbourhood areas.
There is now a substantial opportunity for food-driven cafes and coffee shops to take some of the traditional restaurant and takeaway business. In many parts of the country customers have now become used to having part-cooked or fully-cooked meals prepared by their local coffee shops for collection or takeaway – it has become a ‘new normal’ in terms of considering what to eat in the evenings if you’re not cooking.
Phase Four – when we finally reach the ‘new normal’ will see successful operators with more diversified and resilient brands and often further consideration of vertical integration such as roasting or creating their own bakeries and food production units.
They are also likely to consider ongoing ways to reach the customer via various delivery channels – both in house and through the traditional Just Eat/Deliveroo channels.
The severe recession should mean the value and ‘affordable luxury’ provided by coffee shops and cafes will make them more resilient than the restaurant sector. This is what happened and helped fuel the coffee shop boom after the financial crisis in 2008. The caveat to all this is that location will be a huge factor. The opportunities and changed consumer behaviour patterns for those who are located near offices will be much less beneficial than for those in neighbourhood areas.
