What’s happening in the Australian economy & hospitality industry? May 18, 2020

Figures of relevance to restaurants, cafes & foodservice, plus measures of the wider economic impact of COVID-19. Areas covered may vary week to week…

Hospitality Figures & Trends:

How many hospitality businesses have closed? Numbers vary – on a Restaurant & Catering Australia webinar on 13 April, the figure was given as 25%. Food Industry Foresight research group said (5 May 2020) that “45% of cafes and restaurants are closed. 84% of cafes & restaurants said their turnover had declined ‘dramatically’ to 0-40% of pre-COVID levels, and employment levels cut by 41% for cafes and 36% for restaurants.”

Heavy falls in shutdown-affected categories: gyms, public transport, travel, pubs & venues (-77%) and cafes (-36%). Stimulus has boosted some categories: online retail and subscription services, food delivery(+258%), pet care and supermarkets. (Illion)

National ANZ-observed dining expenditure is now 30% lower than same time last year, an improvement from -54% y/y for the week ending 16 April.

General Economic Figures and Trends:

Economist Stephen Koukoulas summarises the unemployment figues released last week:

  • 832,500 people unemployed.
  • 1,816,000 people underemployed.
  • 554,000 additional people have given up looking for a job with the workforce participation rate diving 2.5 percentage points in the last two months.
  • This is more than 3,200,000 people.

500,000 jobs were lost in April; and number of people employed in Australia dropped by 600,000 between March and April. The under-utilisation rate jumped to 20% – people who would like more work than they currently have. It’s been around 15% for the last 4 years. Had the increase in the number of people who were not in the labour force been a further increase in unemployment, the unemployment rate would have increased to around 9.6%. (ABS)

Clearly JobKeeper is working to keep people off the unemployment lists, but recent government hints that it would be discontinued or limited are causing great anxiety amongst restaurant & cafe operators.

Consumer spending (4-10 May): total spending per person now 7% below normal levels. Spending was boosted in the last week by the Coronavirus supplement (doubling of unemployment benefit and youth allowance) as well as the first easing of restrictions.

Super Fund Withdrawals: these are clearly having a substantial positive impact on spending – withdrawals of up to $10,000 are available before 30 June, and another $10,000 after: “More than 975,000 people registered their interest to withdraw their super early, though not everyone is expected to be approved. While the Treasury forecast that around 1.6 million people will likely make a claim totalling $27 billion, estimates among industry funds have forecast that figure to be closer to $65 billion.” Investment Magazine.

Sources: ANZ Research, Aust Bureau of Statistics, illion/Accenture, Food Industry Foresight and Stephen Koukoulas.

Nat shares his dislike of crap food, and millions agree…

What is it about Nat the muso cook that people love? [warning: lots of swearing].

He’s raw and real (his dad was a chef), he hates fake food, and he’s getting media attention. What can we translate from this into restaurant & cafe land? Enthusiasm ✅, energy ✅, love of real food ✅, potty mouth 🤔. …

I asked a bunch of restaurant mates if Nat actually helps the industry:

Absolutely yes I love him. He’s bringing accessible cooking to people who wouldn’t watch a Jamie Oliver or Gordon’s Ramsay video. He’s real, funny and entirely a good thing as far as I’m concerned. – Rob

I had a mate yesterday mention this and he is a convert. He reckons his approach works for him and he rarely cooks. As for how it impacts cafe customers – my mate is a good example as he is high income and eats out regularly (hence not cooking much!) but he uses Nat when he has to cook. – Gordon

It’s not about us, it’s about the kids that have been scared to cook for themselves. All power to him! – Paul

I’m a big fan, he’s a hard case dude alright and his cooking is awesome. “F#*k JAR sauce!!” – Lisa

Suddenly, Everything Needs to be Negotiated!

Restaurant & cafe operatiors now have to do a lot more negotiation, and it’s not just the small stuff. Three months ago you were arguing over a 20c increase in chicken prices, or the chef wanting a $30 wage rise.

Now you’re dealing with a stubborn landlord, an unknown bank manager, impatient suppliers and a cranky partner. Most of what you did before was haggling, now it’s time to work like a grown-up!

Negotiating with landlords is a good place to start, and is likely to give you the largest financial return if you get it right. Shopping centre leasing executive Julian Mero advises:

  • Preparation and planning are two of the most important components of a negotiation. Without them you negotiate with force, threat or bluff which is not desirable and can break down the communication.
  • Understand the other side – what do they need? What is the landlord’s financial position, or if it’s in a shopping centre, what are they allowed to offer?
  • At the beginning, create the right atmosphere, communicate your position and learn their position – asking questions gathers information and gives you time to assess.
  • Back up every phone call with an email, outlining what you understood was agreed.
  • Never give anything away without something in return – eg an extension of the lease, or help with refurbishment in return for paying more rent than you anticipated.
  • The first offer has more influence on the final deal than any other factor – so plan and make it carefully.

The most common mistakes Julian sees in negotiation:

  • Don’t rush, the person with the most time pressure has the lower hand.
  • Neglecting the other sides position or problems – the landlord is not a demon!
  • Letting price dominate all other interests – there are other concessions that may be worth more than just a rent reduction.
  • Searching too hard for common ground to make the deal happen.
  • Neglecting your ‘walk away position’ previously set – if it looks like you were bluffing, you immediately lose leverage.

Business broker Paul Leach has dealt with many landlords, and people buying and selling restaurants & cafes. His advice for negotiating in the current crisis:

  • Act quickly and communicate with your landlord immediately.
  • Crunch the numbers and make a plan. Be ready with up-to-date bookwork – your sales data, P&L statement, bank statements etc. Back up your argument with honest, transparent information.
  • Do all that you can to meet your current rental obligations.
  • Work out what help you need from the landlord and look at it from both sides.
  • Don’t take “No” as being final – it might be the start of some serious discussion.

Chris Voss of the Black Swan Group talks about the personal interaction that takes place, and his tips could be blended with the practical advice of Julian and Paul. Remember most of this will be on the phone or email, not face to face:

  • Use the voice of a soothing late-nigh DJ – let’s get everyone nice and calm.
  • Establish a connection with your opening – ‘I’ll bet things are crazy over your way. I’ll bet this is all pretty overwhelming.’
  • Label what you hear: ‘this must be pretty stressful for you’ and ‘It probably feels like things are changing from one minute to the next’ or ‘It sounds like you guys have thought through quite a few options.’
  • Shape new thinking with the word ‘how’ eg ‘How do we work our way through this so that we don’t destroy each other. and we’re in a position to pick up the pieces and work together when this is over?’

Buckle up – you’re about to save yourself a lot of money!

Here’s Chris Voss telling us how to save deals in the post-coronavirus environment…

Some of this article was written by me for Hospitality magazine.

Why The E-Myth is Still So Relevant for Cafe & Restaurant Owners

It was published 24 years ago in 1986, and reverberated like a thunderclap in the world of business. You’ve heard that saying ‘work on your business, not in your business‘ so many times you could scream. That’s from the The E-Myth!, and author Michael Gerber’s message is still electrifying, even in a world run by digital systems… and facing virus restrictions and dislocation.

Years ago I ran one-day management events for restaurant owners and would show this short videp, pausing for discussion every few minutes. It would would totally rock them all – so powerful is the message. Wait till you hear what he says about ‘what Mary does‘ – sound familiar with how you’ve positioned your chef or a key manager? Have you created a prison with your business, instead of a path to freedom? Now watch, and find out the key to create a better future…

Here’s a summary of the key points, but don’t use this to stop watching the video!

3 Parts of the Business Development Process:
* Innovation
* Quantification
* Orchestration

4 Key Business Systems:
* How we do it here
* How we recruit hire and train people here
* How we manage here
* How we change it here

7 Point Plan for Business Success
* what’s your vision?
* develop the strategic objective
* develop an organisational plan
* develop management systems
* develop recruitment and staff systems
* develop marketing systems
* develop your operational systems – soft, hard and information

How Restaurant & Cafe Owners Can Learn from Sport Teams and Violin Players

What can sporting clubs and a classical violinist teach us about staying in touch with our customers? And not just ‘don’t forget me’ messages, but spending this time of enforced separation to build their love, enthusiasm and loyalty?

Two widely contrasting social media posts landed in my feed recently – one from ‘sports fan engagement specialist’ Blair Hughes, and the other from young violinist rock star Ray Chen.

Blair is a lifelong sports nut, and watches the way smart clubs build their connection with fans, spectators and players – at the game and through the rest of the week, online and offline 24/7. He’s just shared 200 Fan Engagement Ideas to Educate, Entertain & Connect Sport Fans During Covid-19. A week later he shared one that’s even more relevant for cafes & restaurants: 150+ Fan Engagement Ideas for Craft Breweries to Entertain, Educate and Drive Revenue.

Ray Chen started as a child prodigy violin player in Brisbane, then moved to the US on a scholarship when he was 15. His career has skyrocketed since then and he travels the world giving concerts, until the start of 2020, when live events ground to a halt. He’s rapidly pivoted to a wide range of YouTube activities – live streams, practice sessions with fans, online meetings with other performers. He even has merchandise for sale. These are not just the usual ‘turn on the camera and start recording’ videos, but he gets them cleverly edited to add snap, crackle and fun. He knows his audience!

What do they have in common? Imagination, and a commitment to the pleasure, enthusiasm and loyalty of every single fan and follower. What lessons can we take from these two passionate experts to maintain and develop our own customer connections and fan base?

Here’s Ray in a recent online coaching session, and here he is jamming Waltzing Matilda

Talking about the ‘new normal’ on the Hospitality Mavericks podcast

I enjoyed talking with Hospitality Maverick Michael Tingsager from Brighton in the UK, about what we think is coming in the hospitality industry ‘post Covid-19’.

Much speculation of course, as things change on a weekly basis, but it’s useful to think about the fundamentals of business that don’t change, and how they will be relevant in a new business environment with much less money. Hope you enjoy this, and let me know your feedback via LinkedIn or my Facebook Page

My interview on hospitality and the Coronavirus crisis – Sky News Australia, March 21, 2020

I had a short interview on Sky News today about the state of the hospitality industry. I was given four questions to consider, and prepared some bullet point reminders. In the event, only the first three were asked… and I was relaxed!

1. You’ve been in the hospitality industry for more than 20 years. What we’re seeing right now is unprecedented – what should restaurant & cafes owners be doing?

  • Communicate like never before with your customers
  • Offer & sell food and drinks in new ways – delivery, take home packs, takeaway
  • Write to your local MP about the number of jobs that will be lost without direct financial support. There is a lot of cynicism about whether government support will actually help – tax concessions aren’t any good if you’re not making a profit.
  • Talk to your landlord, preferably with your lawyer’s help – urgent negotiation is needed.
  • Overcommunicate how you are operating responsibility – remove tables to stick to the 4 sq m. rule, and cleaning very visibly.

2. Business owners are going to have to have some really tough conversations with their staff – what’s the best way to go about it?

  • Be as fair and transparent as you can – there is so much pain for operators around this
  • Be open with your staff about the real cost of running a business, and what you can afford.
  • Help them apply for benefits.
  • Move quickly – and get support from colleagues or professionals

3. How can Australians support the hospitality industry right now, while we’re social distancing?

  • Keep ordering and keep buying!
  • Share words and acts of kindness with local businesses – message them, share positive reviews online, post on their Facebook and Instagram
  • Lobby for government support for business owners, workers and all the people who will lose jobs

4. What’s your advice to restaurant and café owners in communicating with their customers right now?

  • Do much more of it, use new channels and change the tone – warm and honest, trying to find positive angles if you can
  • Use more channels and put your face and your team into the story – delivering food, cleaning, cooking, making coffee, sharing with customers
  • Daily Facebook posts and try Facebook Live for a TV view of what’s happening – you’ll get better at it! Pump up the instagram, and if you’ve never done email, now’s the time – you’ll be surprised at how many customer contact details you can find. Even TikTok if that’s your demographic – you have staff who can help with all of these, just make sure to give them guidance on the message and the tone
  • Rediscover the neighbourhood – most operators don’t live where they work, and don’t have time to connect with neighbourhood activities – now’s the time. AND don’t stop once this is over!

How Hospitality & Restaurant Trainers can Work Remotely: a Survival Guide…

Hospitality training has usually been done in person – we hospo people like to ‘stand up and do it’. With the restrictions and closing of many restaurants and cafes, there’s an urgent need to present training in new ways. We need very different tools and completely new methods – traditional workbooks with pen & paper don’t translate very well.

Here’s a bunch of tools, resources and ideas to use and experiment with…

Understand the world of online training and teaching…

Training sessions have to be rethought. Once people are online, separately or in a group, you have to get them to actually participate – a whole new set of skills for leaders, and it can be done! There are also important basics about setup and etiquette, especially if some participants are in a regular office, and others are remote.

Staying Connected and Productive with Virtual Events – some great resources from LinkedIn. They’re also offering 16 of their Video Courses for free, on the topic Remote Working: Setting Yourself and Your Teams Up for Success.

Learn how online teaching works: here are some examples from teachers who only work online – Paige Harden and Luke Stein. One you get into the online teaching and training world, you will find an enormous number of resources!

Consider joining the excellent Flipchart Facebook Group for trainers and facilitators – it’s full of experienced people, confronting the need to change how they deliver workshops and training.

Understand the world of your trainees…

“Among trainees we have both digital natives and digital immigrants. We need to be sensitive and aware of those who may need more support and understanding to remain involved as a trainee – there can be a lot of anxiety about showing ‘digital ignorance’, especially in the 30+ age group. There may be some with no PC at home and no smart phone, or very limited skills with them. For many, their phone is their only computer.

Most trainees will have a Google (Gmail) or Microsoft (Live, Hotmail, Outlook) account, if not a work-specific email address. So make resources accessible through OneDrive or Google Drive – they can login with these accounts and maintain calendar appointments.

Some trainees may have issues with Internet connections and data limitations. Employers may consider a small $$ allowances to increase data plans. Trainees may also need to invest in reasonable headphones & mic, so suggest an affordable model – you may be able to get a discount from a local supplier.

Consider LLN (language, literacy and numeracy) issues that may arise more with digital delivery than face to face, especially as a majority of your staff may not have English as their first language, and probably don’t like maths! Consider the trainees preferred learning style – is it V,A or K – Visual, Auditory or Kinesthetic? The highly Kinesthetic (relying on touch) may struggle with screen sessions without some physical stimulating activities. The Visual like pictures and illustrations, and the Auditory are listening for clear explanations.” – big thanks to trainer Gordon Rhodes for adding this section on the world of the trainee.

Add to your toolbox…

Learn to use Zoom – this is my preferred tool for holding webinars and live events – they offer a wide range of training options, including short videos and hundreds of support articles. I highly recommend doing one of their live webinars on using Zoom Meetings or Zoom Webinars – available at a variety of times. There are so many opportunities here for training, team meetings and new ways of working.

Offer in-demand training like Food Safety & Hygiene – it could be through your existing coursework that’s repurposed for online delivery, or making use of the many good online courses. Do any have an affiliate program to give you a commission for recommendations?

Start a simple Blog, where you can share your profile and your ideas. WordPress.com is free, and can be developed in different ways if you get ambitious. For now, just get your fingers on the keyboard, share one paragraph of training tips, and create an About Us page. Add to this once a week, or more if you have time – your hard-drive is probably full of material you could use for blog posts!

Upgrade your blog to a paid Training Site – there are many options for Learning Management Systems, giving people access to free and paid content for one-off or monthly fees. It will take a bit of time, but hey, you have some of that at the minute! Now you have a home for the videos, quizzes and course-work you are creating, and a way to charge for it!

Write short Quizzes that can be used by business owners. Give some away, and keep others for paying customers eg a 20-question Coffee Quiz, Vegetable Quiz, Beef & Lamb Quiz etc. Keep questions and answers short.

Put your Quizzes Online, with a simple tool like Google Forms or Wufoo. Now staff can do them online and the results will be emailed back to you – lots of accountability. There are good YouTube videos that will show you how to do this – important to move away from paper.

Add bulk SMS texting to your communications kit – I like BurstSMS for setting up a list of mobile numbers and sending messages to a group. Costs about 8c per text – chicken feed! You could include a link to a quiz or new video – if it’s sent to a phone, there’s a 95% chance it will be read. You will of course get permission from the business owner to do this!

Learn to do Screencasting – record your PC screen as you show people how to do costings, or fill out application and leave forms etc. Here are some free and low-cost options.

Create simple ‘how to’ videos with your phone. Buy a $10 tripod to hold the phone steady, and start to talk to the camera, or demonstrate skills. Make sure the light is on your face, and be conscious of good sound. A bit scary at first, but you’ll build confidence. They could be as simple as how to pronounce food names, and how to explain menu items. Get others involved as your ‘models’ or ‘talent’ – there are thousands of useful ‘how to video’ guides on YouTube.

Learn simple video editing to make the phone videos look sharp – edit out pauses, add extra photos and titles. Start with the free iMove on Mac, or Moviemaker on PC – they have everything you need.

Collect relevant YouTube videos – there’s a massive number on every topic, and most are pretty ordinary. When you find something good, add it to your collection for showing at the right time – your skill here is being the curator.

Use existing video training sites – like Ananas, Typsy and Innform . They have hundreds of hospitality training videos already made, and often need an experienced trainer to guide trainees through them, and ensure that courses are completed. Some of them allow you to upload your own videos as well.

Work within a restaurant’s private communication site: it could be a Facebook Group, Microsoft Teams, WhatsApp or Facebook Workplace – here is where you add short videos, quizzes, how-to tips, reminders and acknowledgement. You might commit to adding something 3 times per work as part of a training contract. if they don’t have a comms system like this set up, your (very easy) job is to get one started!

Watch the SilverChef Training Webinars – an exciting new development, using a combination of Eventbrite for bookings, and Zoom for delivery. Numbers keep building as we focus on hot topics for business owners. It was sad to cancel recent live events, but we’re reaching a lot more people this way.

Your comments and suggestions are very welcome – please send them to me through Linkedin or Facebook.

This Post is a Work in Progress: I’ll add new training events and resources here and on Twitter. Lots of exciting ideas are being shared as we find ways to pivot from live to virtual.

Working Remotely – resources for cafe & restaurant owners

There are a lot of new habits and skills to develop – by nature we hospo people just ‘walk around and do it’. Working from home or away from a venue doesn’t come naturally or easily, and if we have to keep a ‘social distance’, we need very different tools and ways of working. We need to sit down more…

Here’s a bunch of resources to help make your remote work almost as good as being there.

Use cloud-based management systems, so you can work and monitor results anywhere. Accounting systems like Xero to track your numbers and profit situation, plus online rostering like Tanda or Deputy and plenty more. Ramp up online customer ordering with systems like OrderUp, TabSquare, MrYum and Bopple. And always keep a close eye on recipe costs. When functions resume, there are excellent cloud-based systems to manage and promote them.

Order with suppliers through systems like Foodbomb or Ordermentum – check with vendors for their own systems. Plan new menus and events with simple project management systems like Asana (free version) or Trello (also free). Watch your shop with video security, and keep track of sales via your POS system’s online reporting. So much can be done from home.

Upgrade communication with staff – email is easy for people to ignore, and texting can become a flood of random comments. Tools like Slack or Microsoft Teams will be much more flexible, with the app on everyone’s phone – they also give you more control of the conversation. A staff-only private Facebook or WhatsApp Group can be very useful. Facebook’s separate Workplace is another option – experiment with a small group, before rolling your choice out to the whole team. And there are still many great ways to train staff, even if it’s done remotely – the group can be the training hub.

Boost your customer communication with more and better social media posts, including regular Facebook Live. Add email and SMS to the mix – you’d be surprised by how much customer contact data you already have – start using it!

Start to use video conferencing, using a tool like Zoom – they offer a wide range of training options, including short videos and support articles. I recommend doing one of their live webinars on using Zoom Meetings. There are many opportunities here for training, team meetings and new ways of working – how often could you avoid a trip to the restaurant?

Keep learning: the SilverChef Training Webinars are an exciting new development, and we focus on practical ‘survive and thrive’ topics. LinkedIn are offering 16 of their Video Courses for free, on the topic Remote Working: Setting Yourself and Your Teams Up for Success. If all this technology makes you nervous, keep breathing… and you’re not alone. There’s usually a YouTube video to explain just about every problem – this new focus is just reactivating some brain cells that have gone rusty!

Your comments and suggestions are very welcome – please send them to me through Linkedin or Facebook.

This Post is a Work in Progress: I’ll add new resources and suggestions here and on Twitter. Lots of exciting ideas are being shared as we find ways to pivot from live to virtual.

Planning for a 50% loss of restaurant sales – what will you do?

We must plan for the worst. Now’s the time to be like swans – floating calmly on the surface, and paddling very quickly under the water. This is real folks – take a lesson from what Chinese restaurants have gone through in the last 3 months, with customers almost completely disappearing.

What if half your business disappeared in two weeks?

You need to plan for a specific scenario. This is not like ‘sales are down in winter’. Take your last Profit & Loss statement and slash 50% off the sales line. Then work down through the expense figures.

  • Plan for letting staff go. Who will be first, and what will you owe them – is it straightforward? If they are permanent, there could be redundancy payments – do your research.
  • Plan your communication with staff – they’re anxious, and they hear the news. You may not have good news to tell them, but they expect you to be fair. If you don’t have an internal communication system, like a private Facebook or WhatsApp group, now’s the time to start it.
  • Be prompt with statements needed to help them get benefits. It’s useful to understand how this works in Australia.
  • Many staff don’t understand the financial workings of a business, so they need an honest explanation of the P&L – it won’t be pretty, and they need to see that.
  • Insist on unwell staff staying away from work. Many will be casual, so no work = no pay. They may want to work even if sick, and that’s not OK – sickness allowance may be available.
  • Talk to suppliers about deliveries and availability of products – your orders will be down, and they may have their own staff issues.
  • Plan for staff disruption if schools are closed – who will look after children when their parents are at work? It will be a big test of your flexibility.
  • You’ll need to handle creditors – which ones will be tolerant, and who can you negotiate with? They’ll be facing their own problems.
  • Check your function booking agreements for cancellation terms – how strict are they, and what will you enforce? Do they need to be modified?
  • Talk to your accountant about tax and bill payments – what can they negotiate with the ATO?
  • Talk to the landlord, ideally through your lawyer – you’re making a loss and paying full rent will be difficult. Share your figures – how can she help?
  • Find out about government support payments – these are likely to be available, as they were during the bushfires. Contact your local MP for information.

What does a half-sized business look like?

  • Ramp up the home delivery options – using 3rd-party systems, and also encouraging pickup through your own ordering page with systems like OrderUp.
  • Upgrade your pick-up and delivery space – people want ‘no-contact’ collection ie touch payments and hygienic packaging. Watch how big operators like McDonalds modify their systems – they are masters of adaption and will show us best practice with this.
  • Immaculately clean and hygienic – it’s one of your marketing advantages.
  • Warm and friendly – now more important than ever. Have you kept the best people for this?
  • Double your staff training – short, practical sessions on cleaning, hygiene and service. This will have long-lasting benefits.
  • Blitz your office and admin. systems – no time for waste and inefficiency. What can be done online that’s still done with paper? What can be done remotely – rostering, payroll, ordering, social media?
  • Massively improve your communication with customers – daily updates on Facebook and Instagram are not too frequent, and an interesting weekly newsletter will be welcome, especially if it comes from the heart. As ever, people look to their local cafe or restaurant for comfort and friendship.
  • Lead by example: sober, hard-working, efficient and hygienic… and still with plenty of smiles.

This article is a work in progress, and I’ll be updating it with more ideas and examples. It is private commentary, and not related to my work. Your comments and suggestions are very welcome – please send them to me through Linkedin or Facebook.