“Increasing the efficiency of the business in the HORECA channel is going to be a fundamental issue”

Lluis Codó Pla is the manager of Horeca Solutions, a consulting company specialized in restaurant and food service. With Codó we talked about the future of the companies of the HORECA channel. What scenario will they face once the coronavirus crisis is over? What challenges will they face after the Covid-19 pandemic? As a starter: “Increasing the efficiency of the business will be one of the keys”, predicts Codó. The complete interview, in the following lines.

What has been the economic and structural impact of the covid-19 crisis on your company?

As a company that offers services to other companies of the HORECA channel, the Covid-19 crisis has led to an almost total halt in activity, since the human teams have either been affected by a temporary labour force adjustment plan (ERTE) or are waiting to see how the contagion evolves.

So, we are just closing some proposals with our customers and rethinking the schedules we had closed. We are also taking time to improve our product and service structure, in order to be able to offer solutions to our clients once all this is over. In a way, we have taken the opportunity to put things in order.

When consumption capacity falls, the first sector to suffer this is the restaurant industry

How do you prepare for the “aftermath”?

For us, the “aftermath” means responding as quickly as possible to the requests we will have from our clients: setting up new concepts, completing projects already underway, preparing pending proposals, etc.

On the other hand, this halt in activity will allow us to launch some new products we are preparing. For example: a critical aspect of the companies of the HORECA channel is to know in what level of management efficiency they move and to optimize it to “stop losing money”. We have created a model that allows us to audit a restaurant or hotel’s business efficiency level from 0 to 100. I think that increasing business efficiency is going to be a fundamental issue when all this is over.

What new scenarios can be opened in the market after the end of the quarantine?

I really don’t know what’s going to happen and I don’t think anyone does. I do think that we “will feel like going out” and enjoying our leisure time, making up for lost time. The Mediterranean culture is an open and very socializing one, so I think we will not lose this.

Another thing is the purchasing power we will be left with. This can be a problem because when consumption capacity falls, the first sector to suffer this is the restaurant industry.

Nevertheless, the delivery business will also continue to grow. This is a very important growth lever for the restaurant industry; I think every restaurant should consider this line of business. However, a critical element to consider is “packaging”: if we manage to get it to convey our brand image and maintain the organoleptic characteristics of the product; we will have a lot to gain.

I think every restaurant should consider the delivery business

What would you recommend to those companies in the HORECA channel for the current and the future scenario?

– Rethink and reformulate the value proposal. Review our positioning and market value. For example, pricing and commercialisation is a basic strategy. We cannot start lowering prices and offering discounts to retain customers. If we do so, our margins will plummet. We should boost our sales mix: more profitable and popular dishes from the customer’s perspective. And design menus that are appropriate for the average price we can get. It can happen that our sales do not increase, but will be able to maintain or improve the margin.

– Talk to our suppliers and tenants. We can’t close the restaurant and carry over a debt. That is why it is important to take action on rent prices and other fixed costs.

– Forensic cost analysis. We must carry out a thorough analysis of the entire cost structure of the business, adjusting for what really does not add value. But we have to be very careful, as the decisions we make will affect our future market positioning and value.

– One strategy that some American companies are making is to sell “gift cards” for when the crisis ends. In this way they are trying to build customer loyalty for the future.