4 Tips to Prepare Your Restaurant for a Recession

Nothing strikes fear into the hearts of restaurant owners quite like the ongoing threat of a looming economic recession. While nobody likes to think about the worst that could happen, taking the time to recession-proof your restaurant isn’t just a good business practice—it’s also invaluable for protecting your peace of mind. 

With many restaurants still reeling from the harsh economic impacts of Covid-19 lockdowns, savvy businesses are already seeking new ways to innovate and flourish in the face of challenging circumstances. At Stuart, we’re committed to helping you stay ahead of the curve. While we can’t promise you a recession-free economy, we can offer our best tips for protecting your restaurant to weather the storm—here’s how.

Count & cut costs where appropriate

Restaurant owners constantly navigate the intricate balance between ensuring cost-effectiveness for their patrons and protecting their business’ bottom line. Regularly reviewing your expenses—whether on your own or with an expert—can help you identify where you might be haemorrhaging funds or missing out on potential growth opportunities. That way, you can make informed financial decisions to optimise your budget and help your restaurant survive and thrive despite uncertain economic climates. 

Unsure where to start? Here are two main questions to consider: 

1. How might a recession affect your restaurant’s operational costs?

The Covid-19 pandemic hit the service industry hard, and many restaurant owners now report similar financial hardships due to current inflation rates. With industry experts forecasting continued economic strain, restaurant owners can expect increased costs on everything from food sourcing and preparation to energy services and staffing.    

So what can you do?

• Seek out energy-efficient appliances, light fixtures, and practices to reduce extraneous energy bill spending.
• Re-evaluate your operating hours and staffing needs.
• Adjust your menu offerings or pricing as needed.

2. How might a recession impact customer spending decisions? 

The effects of economic decline reach beyond the business world into the lives of individual consumers. As the cost of living prices climb, customer spending habits may change accordingly. Stay mindful of that when addressing cost-effectiveness to recession-proof your restaurant.

Offer takeaway & delivery options

Takeout and food delivery services became necessary for restaurants to meet customer needs and survive during the peak of the Covid-19 pandemic. Although the learning curve for integrating delivery options was high, restaurant owners had to act fast to stay afloat without compromising food quality or service. Fast forward to today, where takeout and online ordering are part of the status quo customers expect from their favourite restaurants. 

The food delivery landscape has drastically changed and is now more competitive than ever. Choosing third-party marketplaces as your primary food delivery platform may seem like a no-brainer for their simplicity. However, bear in mind that paying 20-30% commission and competing for exposure on popular apps can interfere with your long-term financial success. 

Consider a hybrid approach instead: 

• Add your own delivery channel to maximise sales and brand loyalty,
• Partner with online order aggregators to funnel all your online orders, and
• Choose delivery platforms like Stuart to pool deliveries and save on both commission and delivery fees.

Deepen relationships with your local community

During a recession, many customers tend to spend less to stay afloat and become more selective about where they eat. That said, it’s not all bad news. People are likelier to invest in the restaurants they feel most connected to—especially during hard times. So, dive deeper into your local community to get grassroots support from your neighbours. Here are a few ideas to get you started:

• Reach out to fellow businesses in your local area to discuss potential partnerships, collaborations, or mutually beneficial promotions.
• Consider sponsoring local sports teams, school competitions, or charity events.
• Maintain an active local presence in your online community by engaging on social media, responding to reviews, and regularly updating your website.
• Prioritise customer service and create a welcoming atmosphere tailored to local needs.

Integrate new restaurant technology

Incorporating new restaurant technology is a surefire way to enhance your restaurant’s adaptability, keeping you responsive to your customer base's changing needs and preferences. The big question is—how do you understand your customer’s preferences if you can’t access order data on major food aggregator apps?

A direct-to-consumer (D2C) delivery channel, either on your website or with a branded app, is a great way to access and leverage customer data. This data can help you gain insight into ordering habits so you can learn how to serve patrons better. Customer data is also valuable for learning how to customise your marketing initiatives for greater long-term success. Plus, by moving away from traditional food marketplaces, your restaurant can significantly reduce delivery fees or avoid them altogether, depending on your model. 

Ultimately, restaurant owners are familiar with the uncertainty of doing business in this industry. However, cultivating a recession-proof restaurant includes building resilience to withstand financial insecurity. Remember—no recession lasts forever, and taking these steps to protect your restaurant can help you make it through to the other side. 

Ready to optimise your restaurant’s delivery channels? Stuart is here to help—talk to our team now to find the perfect delivery solution for your business.