While many non-essential workers are now working from home, and therefore enjoy a guaranteed source of income, those employed in the hospitality sector are afforded no such privileges. The restaurant industry has taken a brutal hit over the last weeks; both high-street chains and small family-owned eateries have been left floundering, and support from the government is lacklustre at best.
Data provided by reservation service company Opentable offers an indication of the sheer scale of the problem. Even in countries where lockdown measures are yet to be officially imposed – the USA and Sweden for example – weekly bookings are down by as much as 90%.
The introduction last week of full lockdown measures here in the UK may have come as no surprise, but they nonetheless left restaurants scrambling to adapt their business models. Some have shut their doors entirely in an attempt to protect staff and customers, but the vast majority have turned to delivery-based operations to claw back lost revenue.
And it seems that our government is keen to support this transition. After all, the benefits of home delivery are twofold, acting as a lifeline for small businesses in particular whilst simultaneously making it easier for the elderly and the sick to get hold of meals.
Although many restaurateurs felt left out in the cold following Sunak’s initial attempt to support the hospitality industry, hastily announced changes to planning permission regulations were easier for them to swallow. Under the reformed rules, businesses hoping to register with delivery providers like Deliveroo and UberEats are no longer obliged to submit a change-of-use application, meaning the transition can happen pretty much overnight.
Although exact statistics have not been released, thousands of new restaurants have registered with third party delivery providers over the last fortnight. Historically this move required a sign-on fee typically sitting in the realm of £300 to £500, though Deliveroo and UberEats have sweetened the deal by agreeing for this to be temporarily waived.
But ultimately, third party delivery services have never – and probably will never – offer a reliable source of income, particularly for smaller businesses. Commission charges per order are still very much present and typically average around 30% of total order value. In other words a huge chunk of profit is whisked away from under the restaurant’s nose by a middleman who fills the gap between kitchen and consumer.
Even aside from these problems it’s a trying time for the delivery companies themselves. Speaking to the Financial Times, an unnamed food delivery executive admitted that “Volumes are down quite substantially… Consumers are super scared.” Social distancing and health worries have led to a huge surge in home cooking and the recent closures of delivery stalwarts McDonalds and Wagamama came as a huge blow.
Putting restaurant closures aside for a moment, it is crucial to remember that the efficacy of these food delivery networks depends entirely on the riders and drivers actually out on the streets keeping the cogs turning. Historically, delivery companies have had tenuous relationships with these ‘self-employed’ workers who have once again found themselves with little to no support in a time of crisis.
The so-called ‘hardship fund’ announced last week by Deliveroo was lambasted by riders who exposed the ridiculous fine print behind the seemingly generous measures. Whilst the company claimed to be making financial support available to symptomatic workers who were forced to cancel shifts, it rapidly emerged that they would only provide sick pay when shown evidence of a positive COVID-19 test – an impossible task for the vast majority of the population.
I occasionally ride for food delivery companies during the vac, and a quick glance at the local Whatsapp group gives feel for the current mood. Behind the nonchalance and the banter, many riders are genuinely worried about infection, and almost all are frustrated and angry at the lack of support from employers. It’s a dangerous cocktail of emotions; these services will become increasingly stretched as more and more workers are forced to self-isolate, and in the current climate a rider-led strike would be hugely disruptive not only for the delivery companies themselves, but crucially for the thousands of restaurants which are now completely reliant on the service they provide.
The food and drink companies best placed to weather the current storm are those who are opting to adapt, rather than simply transferring operations to home delivery services. Iffley-based bakery Hamblin has launched a baking scheme which sees fresh bread and buns hand delivered to local residents, all of which is coordinated via their Instagram account. Avoiding third-party delivery providers maximises profit and adheres to their ethos of small supply chains and community engagement.
Other businesses have chosen to promote their takeaway elements whilst staying clear of third party companies; pubs and breweries across the country are now offering a McDonalds style ‘drive-thru’ service for example, though whether or not this can be justified as essential travel remains open for debate. And we are increasingly seeing companies leverage the power of the internet with imaginative digital solutions. For example, Beer behemoth Brewdog have launched a series of online tasting sessions for IPA aficionados, and numerous restaurants are offering exclusive online cookery consultations with award-winning chefs.
Regardless of the measures they take to survive the pandemic, restaurants and food and drink producers are going to take a huge financial hit. But high-street chains will surely emerge stronger than local businesses who operate on a far smaller scale, and we have a responsibility as consumers to ensure that we think about where our money goes over the next few weeks. Now, more than ever, it is time to support small businesses directly. The temptation to reach for the phone and order a Deliveroo takeout is now paramount but, if at all possible, food should be collected in person. Cutting out the middleman is a small gesture but the financial implications are huge; restaurants struggle to turn a profit with home delivery even before accounting for the recent reduction in order volume. So why not sign up for an online beer tasting, or pay for a pasta making lesson over Skype? What could be better than picking up new skills whilst supporting restaurants during a time of hardship?
