Retail & Consumer industry
Business owners know it will take more than changes in official advice to get going again
Alice Hancock and Alistair Gray
A rotating conveyor belt that allows customers to help themselves to food and avoid contact with staff might seem the ideal set-up for a restaurant trying to operate under social distancing rules. But Richard Hodgson, chief executive of the Yo! Sushi chain, said he would not reopen a single outlet until he could be sure diners would return. “Irrespective of what restrictions are lifted, we need to see what the customer sentiment is,” he said. “When you see someone in a face mask and perspex screens, it reminds you that there is a risk.”
While authorities on both sides of the Atlantic are beginning to loosen lockdowns, companies at the sharp end of dealing with the public know it will take more than changes in government advice to get business going again. Consumers have been told for weeks it is safer not to leave the house — making them fearful about everyday activities, from shopping to drinking, that companies large and small depend upon.
“The government has spent the last seven weeks educating the customer in a way that it is completely alien to them,” said Simon Emeny, chief executive of the UK pub group Fuller’s. “Now they need to re-educate them.”
Even if people become less worried about catching Covid-19 and start to venture out, they will hardly be in the mood to splurge. Since the lockdown began, 36.6m Americans have filed for unemployment. In the UK, the Bank of England has forecast the crisis will lead to the worst recession for more than 300 years.
The pandemic plus the economic downturn is “an incredibly incendiary combination” and a double blow to consumer confidence, said Adam Galinsky, a business professor at Columbia University. Almost nine in 10 respondents to a survey run by hospitality industry research firm CGA in the UK this month said they were worried about their own health and that of family members because of coronavirus. A similar proportion was worried about the longer-term financial impact.
Optimistic executives insist psychological barriers to a recovery can be overcome. Some are hoping retail therapy will do the trick: shops in both the US and UK are preparing to run heavily discounted sales to shed stock.
A leading UK retail boss said “the perception of the threat is often greater than the threat itself” and that as time went on shoppers would rationalise the risks.
In the meantime, some consumer-facing industries are trying to mark themselves out as safer than others. “The biggest thing we are trying to do is differentiate ourselves from sporting events and music gigs,” said Tim Richards, chief executive of cinema chain Vue. “We have the ability to control how many people are in our foyer at any one time.”
Are customers going to want four or five waiters buzzing around their table all night? It’s a tricky thing.
Chef Jason Atherton, who runs restaurants in New York, London and Shanghai
There are some obvious steps companies can take to make customers feel safer. Simon Property Group, America’s biggest shopping mall owner with more than 200 properties, said it had hired epidemiological and environmental health experts to draw up safety standards. It plans to have about half its sites open within the next week. David Simon, chief executive, told investors this week that shoppers had responded well to its reopenings so far and sales for many tenants had been better than they expected.
But the pandemic poses a particular problem for bricks-and-mortar retailers that have sought to defuse the existential threat of ecommerce by reinventing their stores as “destinations”.
Recognising that customers will be unwilling to linger, Sam Fisher, co-owner of Burley Fisher Books, is nevertheless trying to make the experience of visiting his independent bookstore in east London as attractive as possible. He plans to set up a table in the doorway where staff will sit and talk to customers about their preferences and search the shelves on their behalf.
Other sectors, too, could be especially vulnerable unless they make creative changes. The Michelin- starred chef Jason Atherton, who runs eight restaurants in New York, London and Shanghai, said the table service that once set “fine dining” apart could now put customers off. “Are customers going to want four or five waiters buzzing around their table all night? It’s a tricky thing.”
He plans to digitise the business’s 150-page hardcover wine list, and have chip-and-pin card machines brought to tables on trays with disinfectant wipes.
A restaurant with tables separated by barriers and waiters wearing face masks does not sound like the most enticing setting for an evening meal, yet research for the Financial Times by Cognovi, a behavioural analytics group, found that instead of being put off, diners were likely to be reassured by such measures.
The company, which uses social media dialogue to assess attitudes, found that anxiety levels soared when people discussed the idea of eating in restaurants during the pandemic but almost disappeared when protective equipment was part of the picture.
Uncertainty about resuming activities is declining
Based on what you know about Covid-19, when would you feel comfortable going to ...
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Beni Gradwohl, Cognovi’s co-founder, said that restaurants should tackle concerns about coronavirus “head on”, such as by having signs up giving details of cleaning procedures.
Keith Barr, chief executive of InterContinental Hotels, agreed that guests needed a “visible sense” of what hygiene protocols were in place. “We’re just trying to make sure that people feel comfortable again.”
Ranjit Mathrani, owner of Indian restaurant Veeraswamy in London’s Mayfair and the Masala Zone chain, said the company planned to check the temperatures of its customers when they arrived and require them to use hand sanitiser when they sat down.
“My judgment is that it is a matter of demographics and age. The most cautious will be the most elderly. When it comes to the younger generation, they will have their own standards,” Mr Mathrani said.
Consumer attitudes also vary by country. A survey by EY run over the past three weeks found that UK consumers were close to the global average on their level of concern about going out to shops, restaurants and using public transport again. In France, people were much more apprehensive while Americans were keener to return to everyday life.
There had been plenty of evidence of that in South Carolina, according to Sam Mustafa, chief executive of Charleston Hospitality Group. He said his restaurants had enjoyed steady flows of customers since they began reopening last week.
The group, whose restaurant portfolio includes Eli’s Table, Queology and Tabbuli in Charleston, is using disposable silverware and its tables are positioned between six to eight feet apart. Staff are not required to wear face masks, although about one in 10 had chosen to do so.
Footfall had been particularly brisk during the weekend Mother’s Day celebrations, he said. “I was totally shocked with the result. A lot of people came out. I don’t think people are concerned about the virus — at least judging by what happened.”
Safety will be the number one concern, I think, for years to come
Maruti Seth of Group 2029, an Illinois-based Burger King franchisee
Still, polling suggests executives would be right to remain cautious. More than half of respondents to EY’s global survey said they were “extremely uncomfortable” about going to a bar or a cinema. Only about one in five Americans asked by Morning Consult last week said they would feel comfortable eating at a restaurant or visiting a shopping mall within the next month.
Business also needs to prepare for changes in consumer mindsets that could be much longer lasting. Maruti Seth, who runs Group 2029, an
Illinois-based Burger King franchisee, said: “Safety will be the number one concern, I think, for years to come.”
Additional reporting by Jonathan Eley and Antonia Cundy
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