Main trends in the development of Ukraine’s restaurant business in the conditions of the pandemic

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Main trends in the development of Ukraine's restaurant business in the conditions of the pandemic

Prylepa N.V., Khmelnytsky National University, Tomalia T.S., Khmelnytsky National University

Introduction

Conditions for the development of the restaurant business in Ukraine are changing under the influence of various economic events. Recent events are a testament to the impact of the pandemic on the restaurant business. For many restaurants, surviving in a pandemic environment is no easy task. The conditions in which the restaurant industry finds itself are definitely a challenge, it is an incentive to look at the restaurant business from a different angle and create new, more flexible projects. Today, restaurant businesses have to make every effort to stay afloat and survive. Due to the situation in the world caused by the coronavirus pandemic, most restaurateurs suffered heavy losses, and some of them were forced to close their establishments or to transform their activities.

However, the pandemic forced to reconsider the existing adaptation mechanisms and behavioral approaches to the management of the restaurant business in the global crisis. The most significant losses from the introduction of restrictive measures threatened the restaurant business, which faced the need to cover the costs of staff, territory, security, utilities in a significant reduction in profits due to the ban on visiting restaurants in the first months of the pandemic. However, meeting the basic motivational needs of the consumer the restaurant business is beginning effectively overcome systemic economic crises.

Presentation of the main material

For the restaurant business, the pandemic crisis is a difficult time, so most homeowners have had to cut staff, review room charges and focus on food and beverage delivery. The culture of food delivery and online ordering began to develop at an incredibly rapid pace. Programs Delivery.com, Uber Eats, Caviar are becoming one of the most popular in the world of food. In addition, delivery from regular establishments, there is a growing number of orders from “virtual” restaurants that do not accept offline consumers and prepare exclusively for delivery. To meet the demands of their customers, delivery services introduce new technologies and simplify the ordering mechanism as much as possible. You can order on social networks, with the help of virtual assistants and from the car's navigation system. For example, in the US, the order from Pizza Hut pizza you can make and pay for directly by the digital menu of the car and from Domino's Pizza just by retweeting the pizza emoji. The same Pizza Hut has released a digital menu that determines the focus of the customer's eyes and offers the best ingredients for pizza with 4896 possible combinations in just 2.5 seconds [3].

In Ukraine, the service of food delivery in restaurants has switched to a system of delivery automation. The food delivery automation allows the restaurant to receive an objective picture of orders, promptly respond to changes in customer requests, predict peak loads and make timely adjustments.

The Ukrainian network of “Chernomorka” establishments has started to implement quite creative solutions so that kitchen workers and waiters do not lose their jobs by launching a unique online restaurant. The waiters took orders and helped guests with their choices via video link. Ready meals could be picked up on their own or arrange for home delivery [1].

The Ukrainian Restaurant Association conducted a survey in 2020 among owners and managers of restaurants to find out how the spread of the pandemic has affected the development of the restaurant business in Ukraine. More than 2300 respondents took part in it. The results of the analysis are given below in Fig.1-4 [3].

Fig.1. Percentage of restaurants that plan to deliver food during the pandemic

Indeed, the spread of the virus has given a “boost” to such a direction as food delivery, many began to work in this format, but only 30% plan to abandon it after the restoration of normal operation.

The advantages of cooperating with food delivery services, which have convenient mobile applications for customers, are obvious. This is convenient because you do not need to hire new staff, and, in fact, develop another line of business. If the establishment delivers food and beverages on its own it may be a method of employing its own employees who may have lost their jobs due to the crisis.

Fig.2. Percentage of redundant workers in restaurants during the pandemic

Due to the pandemic, the policy of personnel management in the restaurant business has changed, so 33% of restaurant companies have reduced to 10% of employees and introduced more flexible conditions of “survival” during the pandemic (Fig. 2). Therefore, in order to “survive”, restaurants emphasize the increase in delivery, the development of the restaurant's site, work with social networks and more. The business model is gradually changing, adapting to new realities. Yes, quite a few restaurants in Ukraine are beginning to offer convenient digital tools for the development and promotion of their restaurant projects online. Digital - a tool as a messenger (for example, Viber, Facebook Messenger, Telegram) created quite a few restaurants, where there is online discussion and exchange of information on restaurant topics.

The salvation for many restaurants is the sale of takeaway dishes, but this is convenient only for those who are well located. A popular service “I'll take it myself', which is issued only for rent. For orders over UAH 1.000 cooking time is from 1 hour 30 minutes and depends on the load of the restaurant. If the restaurant is in a Business Center where almost no one lives permanently, the takeaway service is unlikely to prosper.

Unlike in Ukraine, in the United States, some restaurateurs have converted their establishments to shops. An interesting idea is the hot dog chain has started successfully sell boxes for creating hot dogs at home, and the product is in demand among regular customers of the cafe. Steakhouses sell steak-roasting kits at home, and popular confectioneries are becoming suppliers of homemade bread, croissants and other pastries to their customers. But it is easier for small restaurants to survive during a pandemic - large chains have significant costs for rent, wages, taxes, while losing sales [6].

In our opinion, in order to survive, restaurants need to offer the simplest and most popular food most often ordered by consumers, as well as optimize costs, adjust menus to meet the demand of the solvent population and stay in touch with customers.

One of the new trends in the development of the restaurant business in a pandemic is a blogger-restaurateur. To be open to customers, restaurants get in touch, record videos about the development of their restaurant, new dishes, discoveries and are constantly in touch with their customers. Mobile applications in virtual objects have led to the emergence of creative directions for the development of restaurant businesses and their approach to consumers.

Dark kitchens are becoming a common format for catering establishments. They do not have seats and waiters, and ready orders are transferring directly to the couriers of the delivery service. As for specialization, dark kitchens in Ukraine are often not limited to one concept and have several kitchens that the consumer needs. This format has several areas: for example, a closed kitchen, which delivers products - this is the usual catering, online delivery of food for establishments where there is no own kitchen, or cooking for retail chains and vending machines. In delivery, there is a trend for ordinary homemade food. Food delivery is becoming more common and every day, with more and more people ordering food for lunch or dinner every day to save time.

Self-service kiosks are increasingly appearing in the restaurant business. This is a new trend for fast food establishments so cashiers are becoming unnecessary and there are no crowds at the box office.

More and more establishments are avoiding the use of paper menus, and have started using QR codes. The QR-code menu is convenient because no additional equipment is required. It is enough to place a sticker on the table in the institution - and the consumer scans the menu with his smartphone. The use of this technology is relevant so that the consumer can pay for orders with a smartphone. The QR code can include various data: menu, delivery terms, restaurant history or information about personal loyalty cards [1].

Using cloud programs such as “jSolutions”, “SmartTouch POS”, “Poster”, “SkyService POS”, etc., the restaurant implements the task of adjusting and managing orders, forming tasks for preparation and settlements with customers in the restaurant business. Using special equipment, touch POS-monitors or tablets, the restaurant performs installation and organizes self-service counters for visitors. When ordering, the order is automatically printed at the bar or kitchen.

It should be noted that not all restaurants are ready to work and look for trends in the development of their restaurant in a pandemic. Thus, at the beginning of 2021 there were 14.7 thousand restaurants, cafes and bars, compared to the beginning of 2020, when there were 18.6 thousand establishments in Ukraine.

Accordingly, the volume of the restaurant market decreased by almost 30% in 2020 and amounted to UAH 14.1 billion in 2020. In 2020, the restaurant market lost almost 6 billion hryvnias [3].

Fig.3. Percentage of functioning restaurant establishments in new conditions

Reducing the number of orders and, consequently, profits forces the restaurant business to reconsider the format of business, reformat and adapt to new conditions (Fig. 3).

Quarantine restrictions began to stimulate demand for summer playgrounds in most restaurants. A new format of establishments has appeared - a summer playground without premises. Mixed formats also began to develop during the pandemic, such as cafes and shops. If the restaurant is closed - the store is open, restrictions are lifted everything works together again.

Thus, the restaurant business should try quickly reorientation to a new format of doing business. A significant number of institutions - 41% believe that they have resumed their work in six months (Fig. 4). This indicates that the working institutions were able not only to resume their activities, but also to increase their profits. However, a large number of representatives of the restaurant business could not cope with the catastrophic consequences and went bankrupt.

Fig-4- Periods of restaurant business recovery after the spread of the virus

In order to avoid catastrophic consequences, the main trends in the development of the restaurant business in Ukraine in a pandemic include: Asian institutions; open kitchen; single food restaurants; healthy food; meat restaurants, own production, farm products; bakeries and confectioneries; modern Ukrainian cuisine; combining retail and restaurant business: shops, cafes, shops, bars, etc. The crisis provides good opportunities for such institutions, as they have opportunities for systemic development. In the coming years, such facilities are expected to boom, as they were the first to realize that the market was liberated and needed to develop.

In our opinion, the trends in the development of the restaurant business in Ukraine, which will continue to develop in other formats, are as follows:

1. Application of multichannel. Multichannel in the restaurant business is a combination of online and offline sales. Most offline establishments that have already adopted this are using their resources effectively to increase sales, offering customers not only to visit the establishment but also to order food at home, or place an order and pick it up themselves;

2. Additional geo-zoning. Geo-zoning allows you to set up automatic mailing, activated when the consumer appears in a particular place. Therefore, when a customer is near a restaurant, the restaurant manager can automatically send him a voucher for free coffee. The consumer may not have planned to come in, but a timely coupon can convince him otherwise;

3. Loyalty programs. Customer retention is about maintaining loyalty. A balanced combination of push-messages, messengers and SMS will allow the customer to not forget about the loyalty program and will encourage him to visit the restaurant's website more often;

4. Application of cloud programs such as “jSolutions”, “SmartTouch POS”, “Poster”, SkyService POS, etc;

5. Application of delivery. Without it, it is very difficult to compete and, accordingly, quickly pay off.

Conclusions

Ukraine's restaurant business has faced the biggest challenge in recent times. To survive in difficult conditions, restaurant business owners are transforming the usual formats of activity and activating all possible reserves and key resources. Given that at the present stage of development, the restaurant business is a global computerized business based on Internet technologies and alternative online services, in modern conditions, they should be fully involved in the activities of restaurant businesses. Information technology today, as never before, must become an increasingly valuable resource in the restaurant business, helping restaurateurs not only to maintain viability, but also to open new promising areas of development.

References

restaurant business internet

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