2021 was not an easy year for restaurateurs. On the occasion of the end-of-year and New Year’s season, and since Covid-19 hasn’t gone away, we invite every restaurateur to consider the important lessons from the past year as well as listen to some good advices from Chef Natthini ‘Job’ Plotthong, a consultant and expert in restaurants and senior manager at Makro Horeca Academy, in order to prepare for 2022!

In 2021, restaurants were affected longer than in 2020, because many provinces were locked down and storefront services were suspended for a longer period. Clear examples of last year’s events include…

●          Delivery sales are significantly more important. This is the result of the growth trend that continued from 2020. Back then, we still saw some restaurants that didn’t adapt to deliveries and were willing to wait with the hope that Covid-19 would only be a temporary crisis. However, after almost two full years passed, it became clear that this situation’s going to stay with us for 3-5 years. In addition, although storefronts are back to business as usual, every restaurant’s delivery sales haven’t dropped because consumer behaviors have changed due especially to the work-from-home or hybrid work concepts. Working from home is a new normal that’s here to stay. Ordering food on work days really meets customers’ needs.

●          E-payment has become the norm because everyone is avoiding cash exchanges due to fear of spreading the disease. Hence, e-payment has become the norm for restaurants, big and small, as well as food carts. At the very least, you need QR payments or bank transfers, not to mention e-wallets offered by various service providers. Now, we’re starting to see restaurants and beverage shops, especially some shops that target new generation. For example, there are some cafés that won’t even accept cash payments.

●          The shortage of restaurant workers, including servers and kitchen employees due to restaurants going out of business and employees getting dismissed from their jobs, resulting in immigrant and Thai workers going back home or switching careers. This caused restaurants to suffer a severe shortage of workers, resulting in them having to adapt by changing their menus and services so they’ll require fewer employees and use technology to help operations. For example, restaurants are using the ‘self-ordering’ system where customers order their own food to reduce the need for servers or semi-prepared ingredients to reduce work steps in the kitchen, etc.

What’s the trend for 2022? Is there anything to keep an eye on?
This year’s trends will be driven by the following four main factors:

Having experienced the past two years, we’re confident that every restaurant’s services are more flexible, whether they’re opening their storefronts for business or not. A major factor for resolving this issue is studying techniques for boosting sales via delivery apps so restaurants can access more customers. In addition, in order to succeed, their menus also have to adapt to the behavior of customers who order food deliveries.

Ingredient prices are becoming increasingly high. Other than raising their prices, restaurants may have to consider creating new menu items using lower-priced ingredients in order to control their costs and ensure their food prices aren’t too high in order to offer customers more opportunities and options.

Restaurants in the ‘frivolous’ or ‘non-daily eating’ category may have to struggle more because customers have less money in their pockets. They can’t visit your restaurant as often as before. As a result, this is the time to look at new business models, such as reasonably priced street foods, so as to generate cash flow on regular days when customers aren’t there to celebrate since restaurants in this group usually have large kitchens and many employees. If you’re worried about the impact of selling food at lower prices than usual, you could try launching a new brand online.

If you can’t hire immigrant workers like usual, review your service steps and see if you can benefit from the help of technology or reduce those steps, so you can reduce the number of your employees. You could, for example, have customers make orders and payments at the counter so you won’t need employees for taking orders and keeping tabs on the bills, adapt the menu so the cooking process is simpler and more convenient or use semi-prepared ingredients to reduce work steps.

We probably can’t expect Covid to disappear within a year or two. Therefore, in the past two years, there are many lessons we can learn from and use as future restaurant operation guidelines. The main lessons we’re going to share that can be implemented at all types of restaurants include the following:

-           In a situation like this, you’ve got to make small investments. Invest in small-scale constructions that require little labor so you can break even fast. Furthermore, you need to consider your flexibility if you need to open or close your restaurant, if necessary.

-           Your food type should still emphasize dishes that are common daily dishes, not large fancy meals. You’ll have a better chance of generating income in this economy.

2. Use technology, innovations and conveniences as much as possible, for example, a system for ordering food by scanning QR codes, a POS system, robot waiters (for spacious restaurants), pre-trimmed meat and frozen ready-to-use ingredients.

3. Give importance to sales and cost data. Putting an emphasis on sales and cost control simultaneously will improve your restaurant management. Therefore, recording your sales and using the data to analyze customer needs, so you can create sales stimulating promotions, as well as analyze your food costs to ensure you’re getting a profit, can naturally help you improve profitability in this economy.

4. Constantly update your food costs so they’re always real-time as ingredient prices are frequently and significantly fluctuating. It might’ve been okay in the past to create a standard cost for each dish once a year without ever updating it and then find some, very few, discrepancies in the real costs. However, due to the frequency of the ingredient price updates nowadays, monthly updates are necessary because if your standard food costs aren’t up to date, you can expect significant differences in the real costs and you won’t be able to create a good cost control plan. 

● Must-have food types. As always, street food, Thai food, noodles and Isan food, as well as coffee and bubble tea, dominate the market.

● Delivery services are increasingly expanding outside the city. With the new work-at-home format, shops near communities outside the city are gaining more opportunities. On the contrary, shops in the city may have to struggle even more if customers don’t return to working at their offices like before.

● Teenagers and adults make different purchasing decisions. That is, teenagers and people of the working age tend to go for promotions whereas adults aren’t so sensitive to prices. They focus more on worthwhileness. That’s why operators need to customer data so they can offer the right promotions for their target groups.

● Online shops need to have a clear identity. Your menu has to say what you specialize in. Variety is good, but too many options can make it too difficult for customers to remember who you are because there are a lot of restaurants on just one page of an app.

Cautions for operators who are thinking about starting a new business. What do you have to take into consideration? What are the dos and don’ts?
“Due to the changing income and labor market conditions, many people are very interested in becoming restaurant and beverage shop owners. However, I want you to test and prepare yourself with the following short checklist before deciding.”

●          How much profit are you expecting from your business per month? (This is not your income. Once you know the expected profit, then you can calculate your restaurant’s income.)
●          How much funding do you have for the initial investment? And how much working capital do you have?
●          What types of food are your specialties? Since you need to make your investments small nowadays, the owner should have personal recipes or do things alone in the beginning, so they can teach the employees. It’s better than hiring talented, expensive chefs.
●          Who are your target customers? Are they consistent with the food you want to sell? And how many potential customers do you have?

Experts like Chef Job also say that the four aforementioned factors are related and this will be reflected in the expected income and rate of return. People who are thinking about investing should try doing only these things first. Maybe you’ll find that it’s more worthwhile to invest in something else, especially if you don’t have a lot of investment money or you’re on your last bit of funds.

Lastly, for New Year’s, Chef Job and Makro Horeca Academy wishes for all of our friends and restaurateurs to persevere and get through this crisis together and learn as many lessons from the past two years as possible. Try opening yourself up and creating opportunities for yourself to learn new things so you can improve your restaurants even more. We very much believe that whether you have a large or small restaurant, if you focus more on management, rather than looking at your business as just buying and selling each day, anyone can succeed in this business!!