A rethink for restaurants after near-death lockdown experience

By Zsarlene B. Chua, Joseph Emmanuel L. Garcia,
and Michelle Anne P. Soliman

“WE HAVE food at home.” In normal times, an excuse to skip eating out. During a pandemic, a blessing.

By this point in the public-health emergency, most people will have foregone dining out for months on end, and some may still be reluctant. The pressing question for the restaurant industry is, when will the need for escape from the chore-laden banality of home cooking outweigh the fear of eating in public places, no matter how enticing the food?

The quarantine that started in mid-March forced Metro Manila’s restaurants to close. By mid-June, the Inter-Agency Task Force (IATF) started approving partial-capacity dine-in operations in areas under general community quarantine, allowing restaurants to reopen their doors to guests again after months of getting by on takeout. And while the return to normalcy has been painfully slow, the industry is showing signs of life, though proprietors have had to jump through regulatory hoops and reconfigure their business models to survive.

Myke Sarthou, otherwise known in dining circles and to viewers of cooking shows as Chef Tatung, is a decorated chef with several restaurants an three cookbooks under his belt. He was a speaker at Madrid Fusion Manila in 2016, and represented the Philippines at Madrid Fusion Spain in 2017. He also happened to open two new restaurants, Talisay and Pandan, between the fourth quarter of 2019 and the first quarter of 2020.

Talisay and Pandan closed when quarantine was declared and reopened in the first week of June.”There is only so much we can do considering that both restaurants are barely a year old,” he told BusinessWorld in an e-mail. “We’re on a wait-and-see mindset at the moment. We are still hopeful we can recover. We’re not ready to throw in the towel yet.”

Over at Flossom Kitchen + Cafe in San Juan, Marketing Manager Janna Arceo Lim said, “For the most part it really is coping with the uncertainty. It was quite hard in the beginning because we really didn’t know how long the quarantine will run. We were also very worried about our employees because when we weren’t operating they also didn’t have any income. Most of them have families that they need to support.”

Testifying before the House Committee on Trade and Industry in May, Foodee Global Concepts COO Eric Dee said, “We have 200 stores and closed all of them. We tried to open a few for delivery (to earn) revenue, and we are not hitting our target.” Foodee Global Concepts is responsible for bringing in Michelin-starred brands FOO’D, Tsuta, Hawker Chan, and Tim Ho Wan to the country, alongside a stable of homegrown and international brands. “We did indeed close 200 restaurants, and as the enhanced community quarantine (ECQ) was lifted we opened a few stores (one for each brand) to practice the new safety protocols that we have in place, as well as to test the market and see if our projections are correct or not,” he told BusinessWorld. “We initially projected 30% of pre-COVID sales. If we used to make P100, we projected P30. Even at that conservative number some of the stores are not hitting that number.”

The typical playbook for closed restaurants is to seek other means of bringing cash in, like takeout or cook-at-home frozen food. Flossom’s Ms. Lim, said, “We actually started selling frozen and pre-packed versions of some of our dishes. This way when people order their favorite dishes from us they won’t have to worry about it spoiling. They can cook and enjoy their food anytime they want.”

Mr. Sarthou went a different route by channeling his pent-up creativity into his online community and cooking channel, Simpol. “I have a very strong online following. We reach over 10 million people monthly,” he said. “It’s just as stimulating. It’s different but equally challenging, considering the volume of material we produce regularly. It’s really hard work.”

He defended the decision to completely close down during quarantine, saying, “Our restaurants are built for the dining experience, the food being just one of the components. We felt that going into takeout and delivery will actually ruin the brand experience.”

“Besides,we were not built for that kind of business. We did not want to get into it unprepared or doing something sub-standard. Secondly, it would not be sustainable in the long run. We projected to lose more by operating on such a small scale.”

Asked why preserving the restaurant experience mattered so much, Mr. Sarthou said, “Aside from ambience, which may seem superficial to some people, food quality is a bigger concern especially when your food is quite technical to prepare. You need proper equipment, and food has to be served in a certain order to be able to deliver the best quality. Sometimes it does not translate when it’s packed and reheated at home. I can only speak for my restos, but we just felt we were not ready to make the shift.”

Mr. Dee added, “Our brands are experience-based restaurants and not just about the food. It’s about the overall experience of service and ambience along with the food. The industry has pivoted into deliveries and takeout so we had to figure out a way to convert an experience into a microwavable takeout container — its hard.”

Asking about how the pandemic has changed the landscape, Mr. Dee said,” This crisis has definitely accelerated digitalization — people are now more used to using delivery services, paying online, and such. I believe we have advanced five years into the digitalization timeline. In Foodee, we were already in the process of digitization so this crisis has just expedited our process.”

Mr. Dee said the pandemic will slow the group’s expansion plans, making him a potential bellwether for the overall industry, considering Foodee’s size. “We are definitely going to downsize: that is a given. We will look into optimizing our store locations and look for and eliminate redundancies. With the downsizing of stores, there will definitely be downsizing of people,” he said. “No expansion, PERIOD. It will be survival and optimization for us until we get back on our feet.”

“Now the vicious cycle begins, and believe me. we are just at the beginning of it.”

Mr. Sarthou, who pivoted to cooking shows, is also looking at real estate issues. “I swore off malls years ago and I think it was the best decision ever. I think the business dynamic between landlord and restaurant will change drastically especially in the mall arena,” he said. “So much is still uncertain at this point. Surely market attitudes will change. The question really is whether it still is a good idea to operate a resto considering the scenario.”

The dining experience will be just one of many things that will need to change, aside from how we work, dress, or even show affection. “The culture of dining out will really change in the next few years,” he predicts. “Definitely more people are cooking at home again.”

“Surely our businesses will adapt, maybe at a slower pace than others, but we are very open to that. We are just cautious, having less resources than our bigger counterparts.”

“On the other hand, the shift puts me at an advantage somehow because of the reach and influence I am developing through my content. In the meantime, when people cook at home, I can be with them. And when everything goes back to normal, perhaps it would be their chance to visit me in my restaurants.”

Mr. Dee said, “The overall foot traffic isn’t there and people aren’t confident about dining out yet. The fear still lingers and I am afraid it will linger until a vaccine is found. But even then, the stigma will be there and we will still have to continue our efforts on safety and making our diners feel safe and confident again.”

“Besides the values people already know from our brands, now more than ever, we will have to push for safety and gaining back consumer confidence.”

On a more cheery note, he concluded: “We are confident that people will dine again, the question is when.”