How restaurants can survive without tourist dollars

Dan and Steph Mulheron

COVID-19 is forcing restaurateurs to become more innovative and consider new ways to woo diners and maximise revenue. By Cameron Cooper

The finale of reality TV hit My Kitchen Rules in March 2020 was supposed to be a new marketing launch pad for restaurateurs Dan and Steph Mulheron.

Instead, a day later after a narrow loss in the series decider they had to temporarily close their restaurant, EAT, in Queensland tourist spot Hervey Bay as COVID-19 shutdowns hit. Rather than bemoan such poor timing, they set about devising new business strategies, including delivering ready-to-go and takeaway meals, writing cooking ebooks and finalising supermarket sales of their trademark gourmet sausages.

“Stuck at home, we worked around the clock,” says Dan, who with Steph won the 2013 series of MKR. “It gave us a chance to concentrate on our business from the outside looking in and not being blinded by work, work, work.”

Dan and Steph are among a cohort of eatery owners around the nation who have been getting creative to combat the pandemic. Here are five strategies that could help.

Switch to corporate catering and events

Some restaurants and bars could contemplate targeting the catering sector. Others, in the absence of the normal influx of local diners and tourists, may think about locking in future bookings for Christmas or weddings in 2021 in the hope of thriving when pandemic restrictions ease.

However, Tony Eldred, principal of hospitality management consultancy Eldred Hospitality, warns that the corporate and events markets can be difficult to crack for newcomers. “The market is already over-subscribed, in Melbourne at least, and you’re up against some pretty big and well-organised players,” he says. 

Offer ready-to-go meal kits and takeaway

Meal kits with cooking instructions have sparked an at-home culinary boom. They can also keep revenue coming in for restaurateurs.

Dan Mulheron says EAT started selling budget meals such as pasta and bangers and mash to shift existing produce. “Next thing you know we were doing 200 to 300 pre-made meals a day,” he says. 

Clive Morley, a director at bar and restaurant marketing agency Foodshot, cites the case of Pause, a Brisbane restaurant that created a ‘chef in a bag’ promotion featuring high-end dinner party meals with all the ingredients provided and an accompanying online tutorial. “People can enjoy a homemade fine-dining experience—and get some of the credit for making it,” he says. 

Morley believes ‘loyalty marketing’ represents an opportunity to increase revenue. Try, for instance, to delight customers by adding a free dish to a takeaway order and leaving a personalised note to truly connect with them: ‘Thanks for ordering from us. We’ve added a complimentary dish to your order—we hope you enjoy it.’

Tony Eldred from Eldred Hospitality

Target micro markets

Some restaurants are using their supply chains to create new niche markets such as grocery sales. The idea makes sense at a time when COVID-19 has seen some shoppers steer clear of supermarkets. 

Eldred notes that an agglomeration of well-known restaurants in Melbourne has been selling a curated selection of produce and pantry items, as well as dinner boxes, under the Providoor brand. “The feedback is that the produce and food is good value.”

Value-add with new product sales

After their COVID-19 lockdown brainstorming sessions, Dan and Steph decided to write and self-publish two ebooks on living and eating well. They also created a line of gourmet sausages to sell in Coles. “We’ve now got five types of sausages in Coles and are looking at moving about 500 tonnes of product a month,” Dan says.

At Providoor, members are selling kitchen and homewares to bring an elite restaurant feel to homes.

Go digital

Digital platforms that let customers click on a menu link or scan a QR code at their table to browse food and beverage options and then pay online will be vital. They can also capture and analyse customer data in real time and inform restaurateurs about their real clientele. 

Now more than ever restaurants, cafes and pubs need to be doing whatever they can to understand their core customer and find ways to engage with them in a relevant and appealing way. Access to their own data will be key for making this happen and will help venues avoid the mistake of trying to target everyone. There’s no point in talking to an audience that’s looking to spend no more than $15 for lunch when you know the average cheque size at your site is going to be about $40.

Morley agrees that innovative use of data will be crucial. Tracking customers through platforms such as Google Analytics and Facebook Pixel makes it possible to see where a restaurant’s orders or bookings actually come from. “If you know which marketing channels and which ads bring in the most revenue, it becomes quite easy to figure out which channels to scale up, and which to invest less into.”

New beginnings

Far from being deterred by COVID-19, Dan and Steph Mulheron have opened a new restaurant in Hervey Bay, called Black Bear, to tap into what they see as a gap in the market for upmarket pub-style food plus cocktails and craft beers. In addition to the new eatery and EAT, they will oversee a fine-dining and weddings establishment, The Vinyard, when it reopens later this year to give them a foot in all areas of Hervey Bay’s dining market. “It’s our passion,” Dan says. “We love doing it.”

Eldred says restaurateurs must use the experiences of COVID-19 to reinvent their businesses—that means reviewing menus, pricing and products, and assessing where there are opportunities to expand and increase revenue when local, interstate and international tourists resume their normal dining routines.

“If they just open up again and keep doing what they always did and pretend that all this didn’t happen, they’re probably not going to do too well.”