Foodservice Operators Turn to Takeout and Delivery to Deal with Fallout of Health Crisis

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By Rosanna Caira, Editor & Publisher, Foodservice and Hospitality magazine

TORONTO ─ In recent weeks, as the world has suffered through a global pandemic, which sparked business closures, the foodservice industry has had to quickly pivot to off-premise orders to fuel sales.  Last week, in a webinar hosted by cloud-based software provider MeazureUp, a panel of industry leaders, including Alex Reichichi, president of Crave It Restaurants; Mohamad Fakih, president of Paramount Fine Foods; and consultant Tom Missios of ERC Restaurant Consulting, spoke of the business challenges fuelled by the COVID-19 pandemic.  

“It’s very difficult in this time to see the light, but as someone who came out of a war and who lived in a bunker, the light will come ─ trust me,” offered Fakih. As a company that has traditionally done little business in takeout, “we had to do a lot of pivoting to try to create some sales,” said Fakih. To date, of Paramount’s 57 locations, only seven or eight, are open, said Fakih, explaining units located in hospitals, universities and malls had to be closed due to physical-distancing requirements.  

Similarly, Rechichi had to close many of his Bangkok Buri and Via Cibo restaurants, while Burger’s Priest units are predominantly open. “As a company, we do a lot of off-premise sales – 50 per cent ─ so it’s a big part of our business, but certainly not my favourite,” said Rechichi, adding “we’ve had to move to it in an effort to keep staff employed and do some sales.

“Over the past few years, delivery has been a focus for us as we’ve been working with aggregators for a while. Eighty-five to 90 per cent of sales are online, so we pay commission on it. We’ve invested in integration with Uber and that’s been strong for us.” He’s now looking to push his own app and also plans to launch curbside delivery soon. “One of the pitfalls of delivery,” he said, “is how do drivers represent your brand – are they using thermal bags, for example, to keep food warm; how are they controlling the flow?”

Once he determined which of his locations would remain open, “our number-1 priority was the safety of our people,” said Rechichi, explaining the health of his staff is being closely monitored. He put a number of initiatives in place, establishing protocols to ensure safety. His company didn’t repurpose staff, however, feeling it was more prudent to contain possible transmission should an employee become sick, which he added hasn’t happened. The biggest challenge, said Rechichi, was staff’s overall willingness to work,” adding he also provided hazard pay for those employees who chose to work. 

He’s quick to explain one of the challenges with ensuring physical distancing is that restaurant kitchens aren’t designed to provide enough physical distance between employees – they’re meant to be efficient in the preparation of food. To create safer environments, in some cases, restaurants had to be retrofitted during the night to meet safety guidelines. “Some of the restaurants are now installing plexiglass to protect the cashiers,” he says.  

At Paramount Fine Foods, the percentage of sit-down sales was bigger, so moving to takeout and delivery proved more challenging. To transition into this new territory, some of his company’s executives moved from head office into the stores to help staff deal with the changes and any concerns. He gave staff the opportunity to transition to other duties, if they expressed interest. For example, staff that wanted to do delivery instead of working in the restaurant had to be repurposed. But the biggest hardship, says Fakih, has been letting people go. Putting people before profit is in the company’s DNA, explained Fakih so this was particularly tough for the CEO. 

Recently, and for the next four weeks, Paramount has launched a new menu called “Dare to Care,” dropping prices to create increased sales.

To help franchisees, Fakih and Reichichi both waived royalty payments from franchisees. But both leaders agreed the biggest fallout of the pandemic is the issue of rent. “It’s the biggest domino that people have been waiting to fall over,” said Rechichi. “Government has put out a good package, there’s still some details [missing], but landlords are the biggest concern. I’ve gone on record as saying deferral isn’t acceptable to me,” says Rechichi. “We’re looking for abatement.” 

Fakih agrees. He’s urging “restaurant operators not to pay a penny unless you have an acceptable agreement. Landlords need to take this as an opportunity to show real partnership,” said the entrepreneur. “This is the time to show leadership.”  

Missios agreed. “It’ a humanity issue. They’ll have to give up rent for five or six months until we get through this. They need to be part of the solution.”

Moving forward, Rechichi said the biggest concern is how the industry will come together to rebuild. Citing statistics that show $2 billion in sales have been lost in the first two weeks of the crisis, Rechichi said the industry has a monumental task ahead. “How are we going to open these locations – rehiring, restocking and retraining? We’re going to need some help. It’s the last piece of the puzzle.”

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Rosanna Caira
Rosanna Caira is the editor and publisher of Kostuch Media’s Foodservice and Hospitality, and Hotelier magazines. In her capacity as editor of Canada’s two leading hospitality publications, Rosanna directs the editorial and graphic content of both publications, and is responsible for the editorial vision of the magazines, its five websites as well as the varied tertiary products including e-newsletters, supplements and special projects. In addition to her editorial duties, Rosanna also serves as publisher of the company, directing the strategic development of the Sales and Marketing, Production and Circulation departments. Rosanna is the face of the magazines, representing the publications at industry functions and speaking engagements. She serves on various committees and Boards, including the Board of Directors of the Canadian Hospitality Foundation. She is a recipient of the Ontario Hostelry’s Gold Award in the media category. In 2006, Rosanna was voted one of the 32 most successful women of Italian heritage in Canada. Rosanna is a graduate of Toronto’s York University, where she obtained a BA degree in English literature.

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