How restaurants are adapting to the COVID-19 pandemic
Mandy’s Gourmet Salads of Montreal and Toronto’s Magical Taste of China have multiple locations, each business has a website and they offer takeout and delivery. Both made adjustments to meet their respective provincial government’s guidelines during the shutdown and to welcome back diners as the economy reopens.
About their businesses
Mandy’s is owned by sisters Mandy and Rebecca Wolfe and has eight restaurants in the Greater Montreal area.
Magical Taste of China offers Uyghur cuisine, or Chinese halal, and is owned by Christi Fang and Jiang Zhu and their families. They have a downtown Toronto restaurant and another in suburban Markham with a third location planned this fall.
How they faced cash flow drops
Magical Taste of China had no takeout or delivery system before the pandemic.
“We had no revenue when COVID hit,” says Zhu, adding they had no choice but to lay off staff when the restaurants were closed during the shutdown.
They quickly organized free delivery within a 15-kilometre range for those spending more than $50.
Mandy’s had to close its restaurants to salad lovers during the COVID-19 shutdown and lay off some staff as they watched their revenues drop. They also closed two of their restaurants during the first six weeks of the pandemic.
But Mandy’s continued operating with takeout and delivery services and sales started to tick upward.
“When we started, we were originally a takeout business,” Mandy says of their origins in 2004.
“The silver lining of this is that we were already prepared for takeout and delivery.”
However, Foodora left Canada during the shutdown and Mandy’s replaced that delivery service with Door Dash. Having enough drivers on duty with the delivery services was also an issue, at times. Mandy’s is considering starting its own delivery service
What our BDC expert says
The speed with which these restaurants are adapting to the crisis is due to their creativity and their attention to consumer needs and habits, says Lucie Chouinard, Strategic Planning Solution Lead, Senior Business Advisor, BDC Advisory Services.
Restaurants have every incentive to adapt to changing consumer habits to avoid losing market share.
“Generally, more traditional restaurants now need to expand their offering and change the way they do business,” she says.
Specific strategies each business used
Early in the pandemic, the entrepreneur sisters needed to reposition staff. “We went really skeletal,” Mandy says.
“At head office, there wasn’t much admin work, so we put them in the restaurants as line cooks for takeout and delivery in the first few weeks. Managers were also in the kitchen making the food and dispatching to Uber Eats.”
Mandy’s also needed to ensure they had enough staff during the shutdown.
They increased wages by $2 an hour, paid for transportation and offered free meals. The sisters were also able to hire some restaurant workers who needed jobs.
“We were trying everything we could to make people feel safe,” Mandy says.
After Mandy’s got over that “scary hump” in the first three weeks, sales started to increase.
The sisters also started offering grocery boxes.
“We thought we have all of this food, so let’s do grocery boxes. Our husbands were delivering them,” Mandy says.
The sisters offer smoothie boxes, a do-it-yourself taco box, a fruit and vegetable box, and munchies box with items like cookie dough, tortilla chips, brownies and gummies.
“We’re still doing it. We’ll take it one week at a time,” Mandy says.
The sisters also donated their food and their time.
Rebecca notes that they wanted to help healthcare workers, the “heroes in all of this.”
“We started packing up lunches three times a week to bring to nurses and doctors working in pandemic wards in different hospitals.”
Then they focused their initiative on staff at long-term care homes, hard hit by the virus, to bring them lunches.
On top of their donations, they received other donations.
“Clients were channeling their altruism through us,” she says.
In addition, they delivered food from foodbanks and made food baskets for refugee claimants.
Magical Taste of China kept a focus on delivery with customers now enjoying its VIP discounts of 15% to 25%. Before COVID-19, VIP members needed to purchase a membership to join the VIP club and get discounts. They also offer daily specials at 50% of the regular price.
“At the beginning, we didn’t know how to deal with the pandemic. With the steps we have taken, we have gradually reached a break-even point,” says Zhu.
The Magical Taste of China restaurants now offer patio service for their diners to eat outside, something they didn’t have previously.
What our BDC expert says
Chouinard notes both of those businesses have adapted quickly and proactively, much to their credit. Through these various measures, they raised their profile and broadened their reach.
“Going forward, they must ensure these activities are profitable and closely monitor their performance indicators.”
The importance of technology
For its part, Magical Taste of China started using the messaging app WeChat, the Chinese version of WhatsApp, to promote its restaurants, take orders and payments. Now, they have more than 1,000 members in three of its WeChat groups.
Magical Taste of China also is updating its website to make it more professional and to be able to take orders and payments online. They also want to use social media sites like Instagram and Facebook to promote its dishes and to appeal to mainstream restaurant goers who want to try their cuisine.
The Mandy’s website and the Mandy’s app for delivery and pickup were critical during the shutdown, and still are as the economy reopens and dining space is limited for now.
“I think we’re still going to heavily rely on delivery and technology,” Mandy says. “People can order on the app and come to pick up.”
What our BDC expert says
Chouinard says the use of online technology and e-commerce has grown exponentially, and has now become essential.
“This is the new normal,” she adds.
While this shift to using technological tools opens up a wide range of opportunities, it also requires a great deal of adaptation. Chouinard says employees must be helped through this transition with proper training.
Operating in the reopened economy
Zhu is confident about the future of the Magical Taste of China and plans to open a third restaurant this fall in Chinatown in downtown Toronto.
“The new location is close to the University of Toronto and Ryerson University, office buildings and downtown tourism,” Zhu says.
He also believes that there will be more opportunities for takeout at the new location.
Zhu says their takeout service will now be an important part of the business. “Takeout turned out to be a survival model for us.”
As for Mandy’s, the sisters say it’s about finding ways to keep their customers satisfied and coming back for more.
“You always look at a way that you can fulfill a need,” says Rebecca. “How can you keep serving your clients going forward?”
What our BDC expert says
Restaurants will now have to make sure that customers can easily pick up their orders, as well as provide an in-dining experience that follows regulations, Chouinard says.
In addition, the menu for on-site service could be different from the take-out options. This would help maintain the overall offering and give customers two different experiences to prevent a cannibalization of services.