The #restaurant, #Take ways, #Pubs and #hospitality sectors have
suffered the most during the #coronavirus lockdown. Although restaurants and
pubs have opened their door on the 4th of July 2020, not many people are yet
comfortable to dine out. Still, social distancing rules are in place in the
hospitality sectors. The following hidden costs have crippled the restaurants
and pubs even more.
1. Credit card charges: The government is
encouraging and most people are paying by card instead of cash. Card
payment is more #Covid-19 secure than hard cash payment. Unfortunately, the
card company charges a commission to the restaurants for taking card payments.
That erodes the profit of the company. Stefano Rossi, the owner of
Stefano's Fish and Chips in Edinburgh's Morningside, said his earnings were
being "whittled away to nothing". He added: "Before the
lockdown, I used to pay about £40 a month on card machine charges but now I've
been paying £400 a month. I need customers to return to paying with money now
as all the charges are crippling my business".
2. Delivery charges: Most customers order online
using Just Eat, UberEATS, or Deliveroo app. Stefano Rossi said that he was
paying £550 a month extra on Just Eat charges since the lockdown began. He
added "People just don't realize that when they pay £10 for a takeaway order,
we only receive £8.10 and that is if we use our driver," he said.
"Just Eat charges 14% on every order plus a 50p service charge and it's
35% if you use their driver. The delivery order costs are just too much now and
I would urge customers to please start coming back to the shop and to use
money."
Nadeem Amgid, owner of Yayas Grillhouse in
Edinburgh's Colinton Mains, said "I've seen a huge difference in my card
charge bill since the lockdown and am now paying £500 more on charges a month.
Then there are the third-party delivery charges which you were almost forced to
join when the lockdown started as that was the way people were ordering food.
"Before the lockdown, I was spending about £600 a month on Just Eat and
Uber Eat charges. But since the lockdown, I'm spending £3,480 a month."
3. No Show Costs: Most restaurants take bookings but
do not take any payment in advance for the bookings. On average, 20% of diners
fail to turn up for their reservations in big cities, according to an in-depth
study on restaurant no-shows. A 2015 survey by a restaurant booking system
put at £16bn the amount British restaurants are losing out annually due to
no-shows. Some restaurants take extra bookings than their capacity to adjust
the NO-SHOWS.
Some restaurants are taking advance payment for
bookings up to 5% of estimated bills. Now they are thinking of increasing the
amount to 15%. Some restaurants sell their booking like a theatre ticket that
you pay in advance for the booking. If you do not show up, you lose your
money. The National Restaurant Association advises to avoid now shows:
Put the booking confirmation in writing;
Make a phone call to the customer reminding their
booking;
Make it easy for customers to cancel
Take the credit card number and advise them there
could be a change in case they don't turn up; Offer customers something free
who booked and turned up.
We all should play our part to overcome this crisis
in the hospitality sector.
Firoz Noman
Tel: 020 3488 1616
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