Restaurants move to overcome challenges
Takeout orders become main source of income for catering businesses
CHENGDU — In Southwest China’s Sichuan province, a typical day ends with its famous local cuisine of spicy hotpot. But the dining experience at such restaurants has changed due to the outbreak of COVID-19.
To maintain social distancing between diners and servers, QR codes that contain the restaurant’s menu are attached to tables. Customers scan the code to place orders and pay the bill on their phones.
“The mobile application helps cut 5 percent of our labor costs to offset financial losses,” said Su Xiaoqiang, brand manager of the Chengdu hotpot chain Xiaolongkan.
He said the adjustment reduces the workload of placing and checking orders, so fewer staff are needed.
The coronavirus outbreak is reshaping China’s catering industry. More and more restaurant owners are finding a way out through cost controls, takeout services and digital marketing. These strategies will continue long after the virus wanes.
“In the medium and long term, restaurants will face an industrywide reshuffle,” said Hu Han, an analyst with Euromonitor Consulting. One of the future priorities of catering service providers is to strengthen online operations and balance dine-in and takeout services, Hu added.
The industry may become more standardized and franchise-oriented to minimize unexpected risks, Hu said. He added that capital and investment will accelerate the process by favoring brands that are highly standardized.
China’s restaurant market is recovering but business owners are still under pressure. According to a report issued by the China Hospitality Association, nearly 80 percent of restaurants resumed trading in March. The percentage of dine-in services has also risen sharply.
However, the report indicates the turnover of the surveyed catering companies in March was only 17 percent of that of the same period last year. Added to this, they are facing rising costs in labor, rent and raw materials.
The prices of chilies and beef, two of the most popular ingredients in Sichuan cuisine, are higher than they were before the outbreak. This is “mostly due to the unavailability of imported materials”, said Bo Lin, head of the Chengdu Catering Enterprises Association.
Li Yun, owner of a Japanese restaurant, told Xinhua that the prices of imported fresh seafood have surged due to reduced flights.
In the wake of social distancing, takeout orders are contributing the most to restaurants’ income. Xiaolongkan hotpot restaurants, for example, have seen up to 2,000 takeout orders per day in Chengdu alone.
Many time-honored brands have also developed their classic dishes into semifinished products to boost sales.
The virus outbreak has also prompted the catering industry to go digital. Many industry players are using livestreaming and social media groups to attract customers. Some companies have developed their own online payment apps to reduce customers’ reliance on third-party platforms, whose higher commissions have sparked industry complaints in some regions.
Su said more restaurant owners have realized the importance of keeping in touch with their guests due to the epidemic, so they innovated their online market strategies to sustain interests.
“We set up a WeChat group with our customers and share our dishes in the group every day,” said Liu Yan, manager of a restaurant specializing in signature Sichuan dishes.
“Our intention is to update our status with the regular customers of our restaurant, or they might think that we are closed,” Liu said.
Bo added: “The epidemic forces us to upgrade and consider longterm development.”