The COVID-19 pandemic is rapidly putting restaurants in a novel situation. The pandemic is leaving more or at least some negative impact on the restaurant’s operations and financial position.
While it could be argued that there are always brands and sectors that benefit from a crisis, most restaurants are facing profound challenges with stores closed for almost a month now.
Indeed the sales have dropped for restaurant sector like it has never happened before and particularly for restaurant chains that are not in India but global the impact has been deeper and wider because different countries have seen the impact coming in.
Unnat Varma, MD, Pizza Hut Asia-Pacific
What impact you have seen at Pizza Hut?
Overall the behavior of eating out has taken a massive hit. Our customers/ guests are going far lesser as compared before. Our brand have different kind of execution in different markets. In some countries/markets we have a complete dine-in play where we have seen a negative impact on sales on the other hand of the spectrum we have countries where we have pure home service play, where we have delivery and carry out as a substantial part of the business and over there we have seen a double digit growth in the business. So, clearly as consumers are staying at home, going out lesser, but the need for consuming outside food has always been there and now it is manifesting themselves into consumers wanting to order from home. We are seeing this behavior across geographies. So, markets like Japan, Korea, Taiwan, New Zealand, Australia where we have home service business we have seen consistently a double digit growth.
How franchise partners are trying to cope with the impact across the world?
There is different kind of challenges; getting your employees to the store, keep the store opened, right number of people attended every day to cater to consumer demand. But for markets where there is dine-in business, India being one such market where there is challenge of cash flows. In that case we have recommended a frame work for our franchisee partners. Here is the four ‘C’ framework that we are working with our partners:
Care for employee: Whatever you do, care for your employee first. Put your arms around them. Whether you have to pick them up from homes and get them at the stores if it is running or if your stores are shut and they are at home, make sure they do not lose their salaries and they keep enjoying their benefits in terms of medical insurance etc.
Care for customers: The customers are now extremely sensitive about the brands they are dealing with and how the brands are dealing with them in terms of safety aspects. We were the pioneer to launch the contactless delivery in China, something which has become the buzzword now with food service players. That means you have order pre-placed, you are not doing any cash transactions and there is 2-3 meter distance between the rider who is coming and delivering the food and the customer who is picking it up. Now, we are looking at implanting this in our all carry out business that is substantial in parts of the world.
Care for Business: Under this we will look at how will keep the momentum going. Identify the opportunity for sustaining your business for some time and at least minimize the negatives by looking at specific areas of opportunity and focusing on that. For eg: Corporate catering become an area of opportunity etc.
Care for Community: There are people who are doing the great job of taking care of the people. Not just the health care workers and hospitals but also the volunteers who are giving shelter, a lot of support to the affected people and how do the brand like us come and just say thank you to people who at this point of time putting their life at risk for the benefit of the society.
So, we have shared this particular framework with our franchised partners to keep the business running and identifying opportunities.