European chains face a mixed bag of recovery

When it comes to COVID-19 recovery, countries across Europe have one thing in common: doing their own thing. As a result, pan-European brands face different rules and regulations by country and, in some cases, even among in-country regions.

What does this mean for the restaurant industry?

We spoke with Nicolas Bordeaux and Philipp Laqué, Managing Directors from RMS’ Paris and UK offices, respectively, to find out. They shared the unique challenges facing brands doing business in Europe, and some potential solutions.

Interested in other parts of the world? Read a dispatch from our Asia office.

From a standing start

In countries that were — or remain — entirely closed, fully reopening is a tough proposition.

That’s why some brands are choosing to reopen gradually. For example, Pret a Manger closed all its stores in March. When the brand began reopening in May, it started with 30 of its 450 UK stores. In the weeks since, they have reopened in waves, growing to the current 300 open shops.

Key to the reopening strategy, according to Laqué, is communication. Guests need to know what to expect in advance, which may include scaled-down menus, a new environment and new safety measures in place for staff and guests. 

Bordeaux shared that in France, restaurant supply chains also fully shut down, causing additional reopening delays. “Fresh supply is tough,” he said, “but it brings home the need for a simple menu.”

He noted that in the early days of shelter-in-place, brands managed the necessary menu changes in-house. Now, he and the RMS team are helping clients operationalize new menus that accommodate supply chain issues and limited staff.

Borders and bubbles

Many European countries are lifting border restrictions, but nearly every country has its own rules and timelines. Additionally, there are differences in how and when borders will open depending on a visitor’s origin — whether they are from neighboring EU countries or from farther away, like the US. (For non-EU citizens coming from non-EU countries, borders are closed until June 15 or longer.)

Referred to as the “travel bubble,” all 27 members of the EU except Ireland are shut to international tourists. Switzerland, Norway, Iceland and Liechtenstein remain closed, too.

No tourism = no traffic

To stanch their losses, countries that are heavily reliant on tourism are trying to reopen quickly. Germany, France, Switzerland, Austria, Belgium and Croatia will open borders on June 15 — but only to fellow Europeans. Other EU nations are making their own rules on sealing (and unsealing) borders, causing a perplexing situation for businesses and travelers alike.

Given the obstacles of supply chain disruptions, wildly varying regulations, and uncertainty around projected visits and traffic, Laqué and Bordeaux stress the need for a pragmatic approach and an uncomplicated menu.

“Brands are faced with the need to open with limited staff, limited supply and a clear shift in demand,” said Laqué, “while also facing new distribution channels and shifting traffic patterns.”

Now that employees are working from home, cities, like Laqué’s central London, are no longer hot spots for lunch and happy hours, and even take-away dinner habits have changed from “on the way home” to “close to home.”

  • To manage the changing demand, RMS’ team recommends highly targeted strategies, outlined by location. Some individual locations will find profitability by pivoting to family dinner occasions. Other chains will need to take a hard look at real estate and consider if current locations meet the new demand. All restaurants need to focus on meals that emphasize value and affordability.

Laqué and Bordeaux recognize that varying regulations and confusing travel guidelines are adding complexity to this already-challenging time for restaurant owners, operators and brands. They will continue to advise stakeholders on how they can use data to guide tough yet informed decisions that can result in sustained growth.

And RMS will continue its mission of helping the global restaurant industry respond to COVID-19. If you are interested in learning more about a recovery strategy based on your brand’s true financial health and data, request a callback today.

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