5 Reasons High-End Restaurants Are Struggling to Survive (And What They Can Do About it)

5 Reasons High-End Restaurants Are Struggling to Survive
5 Reasons High-End Restaurants Are Struggling to Survive

High-end restaurants are still facing hardships despite governments lifting restrictions on in-person dining. What are the long-standing effects of this pandemic in the restaurant industry, and how do restaurants cope with it?

In this article, we’ll look at some common reasons why high-end restaurants don’t make much as expected and what can be done to address them.

Inflation and the rising cost of running the business

High-end restaurants stand out for using only the choicest ingredients and providing world-class fine dining experiences – and they don’t come cheap. With prices skyrocketing, margins are now close to nothing. Some can’t even get the supplies they need.

But that’s just the tip of the iceberg. Workers demand higher pay, rent for business spaces have gone up, and foot traffic is still low even as lockdowns and restrictions have already been lifted.

Restaurants are doing every possible means to cut down on operating costs which includes moving to a smaller space, downsizing, shortened hours, and offering takeout and delivery options. In this new reality, money saved is money earned.

Did you know there’s an app that actually saves restaurants $18,315.90 per year on pickup and delivery fees? DeliveryBizConnect allows you to do just that at 3.33% (minimum $1, maximum $2.50) delivery cost compared to 30% from major third-party apps.

And, at just $99 a month you now have a full restaurant CRM complete with cutting-edge sales and marketing automation, POS, online ordering capability, QR menu, mini-website, mobile app branded to you, push notifications, and so on.

Dwindling support from the government

Without government support, downsizing can quickly escalate into closures. One less staff can have a domino effect on the restaurant. Two staff less and it gets worse for everybody. Three less and it turns into a vicious circle of overwork, fatigue and people leaving their jobs. With less people, they now have to shorten business hours which means less income for the restaurant.

From here, it’s only a matter of time before the restaurant goes bust. However, there’s a workaround solution where you can actually boost your sales without hiring additional staff. You can read about it in our article on Why DeliveryBizConnect Is a Better Option to Hiring Additional Staff.

A proposal to extend Canada Emergency Wage Subsidy (CEWS) to October 23, 2021 is already on the table. But it’s only a matter of time before the well eventually dries up. As for Canada Emergency Business Account (CEBA), the deadline has already passed for all applications and borrowers have less than 3 months to pay up before interest charges kick in.

Overworked and understaffed

Constant fatigue and stress is taking its toll on restaurant workers. It’s not uncommon to find workers doing multiple shifts in a day as labor market for hospitality become scarce. In some cases you’ll even find restaurant owners and managers pitching in, preparing food or doing dishes late into the night.

As a result quality suffers and customers feel they weren’t given the VIP treatment they expect to get from a high-end restaurant. Customers expect nothing less when it comes to high-end restaurant service. Any slight deviation from the “high-end” experience is often met with harsh criticism. What most customers don’t realize is that restaurants are already stretched thin.

However, there are certain areas in the restaurant industry which could have been easily automated. Taking orders, payments, handing out the bill, and making sure the right order gets to the right customer can all be done in a single app. For instance, DeliveryBizConnect allows restaurants to take orders via QR Menu.

Aside from being Covid-friendly, it greatly reduces human error from an overworked staff doing too many tasks at once. No more waiting, missed, swapped or wrong orders – just quality service and happy customers.

They’re mostly about the experience

High-end restaurants put so much time and effort on the whole restaurant experience. It’s not just the food that matters. Everything from customer service, amenities, interior design, furniture, and silverware are all top-notch. Michelin Star restaurants are known for this as well as many world-class full-service restaurants in the country.

It’s not surprising they’re among the worst-hit by the pandemic. All of a sudden this whole restaurant experience didn’t matter. It’s not anymore about the expensive feel of high-end restaurants; it’s about getting their food to the customer kitchen perfect as quickly as possible. No wonder many of the fast-casual restaurants offering takeout and delivery has become a dominant force in this new reality.

The current market for fine dining isn’t enough to support high-end restaurants. Some were able to get by selling liquor while others dialed down to just doing takeouts. But these are just temporary fixes. They need a quick solution to not only boost their sales but also be more resilient to future lockdowns.

Eating habits and priorities have changed

The idea of needing to go to the restaurant just to get our food is already far behind us. In pre-pandemic times, the thought of having a restaurant website or the ability to take orders online is often dismissed as unimportant and unnecessary. And then it happened. Suddenly restaurants are hanging on to major third-party apps for survival.

They learned their lesson the hard way.

But there’s another byproduct of this pandemic – customer no longer sees restaurants as just physical storefronts. If there’s a high-end restaurant somewhere within the city, they’d assume it can be found on the app or have their own restaurant app.

Customers find ordering through the app to be more convenient than having to drive to the restaurant and jostle with all other customers in-store. Also, the thought of having another pandemic has put everyone on their toes. People are more cautious and steer clear from crowded places. Going to a physical restaurant is no longer regarded as a necessity.

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