Leverage New Customer Trends for Restaurants and Take-aways in South Africa. After more than two years of Covid restrictions and increasing economic restraints, it is crucial to understand the current state of Restaurants and Take-aways in South Africa. A recent report from Bizhub sheds light on the industry, revealing significant shifts in consumer spending habits and changes in the Restaurant and Take-away space.
Understanding the Impact of New Customer Trends on the Restaurant and Take-away Industry
Shift in Consumer Spending Habits: Implications for Restaurants & Take-Aways
Despite a recent downturn in consumer spending, Take-away and Fast-Food establishments continue to experience solid but slowing growth in these challenging economic times. From May 2019, the real income of the Take-away and Fast-Food category has increased by 37.4%. In contrast, Restaurants and Coffee Shops have faced a decline of -29.2% in income during the same period.
Outperformance of Take-away and Fast-Food Outlets
In terms of income, Take-away and Fast-Food outlets have significantly outperformed Restaurants, Coffee Shops, and even the Catering category.
Implications for the Industry: Signs of Slowing Growth
Although the hospitality sector continues to show overall growth, there are clear signs of it slowing down.
Reprioritisation of Consumer Budgets: Impact on Eating Out and Take-away.
Consumers are reprioritising their budgets, resulting in reduced spending on eating out and increased preference for Take-away. This shift can be attributed to negative economic events, including rising general inflation, petrol prices, increasing interest rates, and a slowing economy, all of which are putting constraints on household income.
Shift towards Convenience and Fast Food: Post-Covid 19 Lockdowns
Post-Covid 19 lockdowns, consumer preferences have shifted towards greater demand for fast food and convenience. Consumers now prioritize convenience, speed, and safety. As a result, Take-away and Fast-Food outlets have outperformed sit-down restaurants. This shift has been further accelerated by improved delivery capabilities adopted by many establishments to navigate lockdowns and social distancing measures.
Leveraging New Customer Trends for Improved Sales: Actionable Strategies
Incorporate a Take-away Menu to Cater to Changing Preferences
Consider developing a dedicated menu for Take-aways if you don’t already offer this option. However, keep in mind that not all menu items may be suitable for delivery. Make necessary adjustments to ensure ease of transportation, maximum freshness, and temperature control.
Explore Delivery Options to Enhance Convenience
While offering Take-aways does not necessarily require a delivery option, providing delivery services can cater better to customer preferences for convenience. You have a few options here. One option is to hire your own delivery drivers, which can help offset the higher costs associated with outsourcing to third-party delivery apps/services. Alternatively, you can outsource delivery through services like Uber Eats and Mr Delivery. However, it’s important to note that outsourcing may require adjusting prices to cover the associated costs.
Embrace Online Ordering to Capture a Wider Market
Online ordering has experienced significant growth in the past two years, with consumers embracing the convenience of ordering food through digital platforms. Integrating online ordering into your Take-away model can be highly beneficial. Online ordering reduces errors compared to phone orders, allows customers to browse menus at their leisure, and provides opportunities for promoting and upselling.
Consider the following online trading options:
- Third-Party Delivery Apps: Popular options like Uber Eats and Mr Delivery allow restaurateurs to accept online orders and offer delivery options through a single app. However, keep in mind that these services charge higher service fees/percentages on each sale, and you have limited control over the delivery process and customer satisfaction. Sharing the platform with competitors may also result in lost orders.
- White-Labelled Apps: Consider utilizing a custom online ordering app like GAAP’s Online Ordering App. This alternative provides greater control over targeting your customers and offers unique benefits that third-party apps cannot match. The app can be customized to match your establishment’s look and feel. It is lightweight, easy to install on any device, and seamlessly integrates with your Point-of-Sale system, enabling quick order capture and communication with your Back-of-House. Moreover, you can receive payments online without incurring fees associated with third-party delivery apps, retain control over menus and promotions, and eliminate concerns about sharing an online presence with other businesses.
Incorporating Take-away options, exploring delivery services, and embracing online ordering can help you leverage the changing customer trends and improve your sales. By adapting to consumer preferences for convenience and safety, you can navigate the challenges posed by economic constraints and achieve sustainable growth in the ever-evolving restaurant industry.