United Arab Emirates. Dubai. The world is going through a phase of unprecedented uncertainty with the new set of challenges emerged due to pandemic. In these tough times, customer-facing businesses are generally bearing the brunt. Food and Beverage industry is one of the worst hit sectors during the pandemic.
According to one of the industry reports, 2019 demand in the F&B sector remained strong, with 78% of consumers surveyed continuing to eat out as much or more compared to 2018. Similarly, 83% spent the same or more on eating out versus 2018, a consistent trend over the last few years. 2020 witnessed Coronavirus pandemic which greatly impacted the consumer behavior. The dramatic shift in consumer behavior pushed businesses to focus more on hygiene and adapt services like food delivery to survive the challenges raised due to the pandemic. The majority of customers opted home delivery rather than dine-in services. With growing concerns over health and hygiene, the stabilizing performance of the F&B industry majorly depends on factors like how soon the virus is contained or ease in lockdown restrictions. Most operators are relying on these factors and expect support of government and key stakeholders.
Tourism offering new business opportunities
Population growth, high GDP per capita and tourism are the major driving factors of the Food and Beverage (F&B) industry in UAE. With the presence of global F&B brands, food chains and renowned chefs, UAE continue to be at the forefront of food industry in the region for last decade. Notably, Dubai saves its position as a global destination for F&B. Dubai attracts tourists from across the globe and remains a popular destination for tourists.
The upsurge in tourism indicates a positive outlook for the global chains and local F&B players motivating them to establish new ventures and expand the existing businesses across Dubai.
Survival strategy adapted during pandemic
Café Mondoux, a European-inspired lifestyle restaurant and café in Dubai Creek Harbour started operating in January 2020 and soon became one of the most popular destination for food lovers. Transcontinental Times spoke to Klaudia Ziemnicka, Operations Manager at Mondoux to know about the lessons learnt during pandemic.
According to Klaudia, “The sales exceeded our expectations within the first 2 months of the launch. Luckily, we were opening food delivery in the local community and when pandemic hit everyone and lockdown restrictions were imposed, food deliveries kept us sustained. Also, we didn’t over hire in the beginning and managed to keep the expenses of the restaurant in control.”
“The market picked up in Nov-Dec 2020 and we expanded our staff, hired new chef and maintained our reliable customer base.”
Talking about the support received from government and stakeholders, Kaludia said, “Even when around 80% restaurants shutdown their business during pandemic but we survived well. Emaar gave us around 50% rent relief which helped us stay operational.”
F&B industry faced restrictions during pandemic but UAE government extended full support to help the businesses sustain.
Klaudia also mentioned that government has taken some favorable initiatives like the requirement to obtain a permit for serving food to customers during Ramadan fasting hours was waived off by the government which helped them serve their customers and stay afloat.
Path to recovery
The pandemic has taught some unforgettable tough lessons to the restaurant owners of Dubai. Transcontinental times spoke to some of the restaurant owners and managers to discover how they are carving the future strategy for their businesses.
- Revised business models
Discounts have become the necessity to engage with your customer base and margins are bearing the brunt. The customers are choosing ordering in over dining in. With this kind of behavior shift, the operational costs of businesses need to be kept in check. Covid-19 taught people to be more cost efficient.
Restaurants like Mondoux managed to survive the harsh realities imposed by Covid-19 by choosing to be more vigilant in managing the cash flow, avoid over hiring and relying in services like food delivery to survive.
- Gaining and retaining customer interest
Now customer is being more conscious while making choices to place order for food or pick a place to dine-in. With the changing mindset of the customer, restaurants will have to be more engaging. They must offer a wide array of food options, great locations, aesthetics of the place and entertainment to gain customer interest and loyalty.
Commenting on evolving with the current market trends and demands, Ms. Eti Bhasin, owner Dhaba Lane Al Garhoud and Dhaba Lane Al Karama said, “In recent times, the Millennial & Gen Z occupy at least 80% of the F&B setups. Therefore, catering to the ‘Insta friendly’ crowd, presentation plays a key role. At Dhaba Lane, we are able to serve traditional recipes in a more appealing presentation. For instance, our Tandoori Chicken is served on a Highway truck, that is the most clicked picture at our Restaurant. Similarly, the ambience should have at least one photographic spot, like our Counter cum Truck.”
“Sanitization’s requirements have increased by multifold. From Wearing masks & gloves to sanitizing all areas, it’s necessary to eliminate any possible form of microbodies lingering. We regularly sanitize our menus and bill boxes to avoid any form of contamination.”
With more tourists and visitors expected later in the year during Expo 2020, restaurants are hoping to reap the benefits and expect fast recovery. But to achieve this, restaurants would require to adapt new practices to cater to customer expectations keeping in mind their concerns around health and safety. Smart ways to engage with the customer, control cashflow of business and provide high quality standards for hygiene will remain key parameters to look out for businesses in F&B sector.