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Restaurant Chain Challenges due to Covid-19 Pandemic

Carmella D. Salazar

Kimberly Joy O. Suarez

Noraisa S. Haron

Ricci Allyson A. Hugo

Sheila Mae A. Pacia

Department of Hospitality Management, The University of Manila

HRM 18: Graduate Seminar

Professor Benjamin S. Jaramilla

August, 2021
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Restaurant Chains Problem due to Covid-19 Pandemic

This pandemic is having a huge impact on real economic activity, but the extent of its

actual impact remains unknown because the spread of the disease, its severity and mortality rate,

suitable policy responses, and individual behavior are all uncertain (Ramelli and Wagner, 2020).

Since more than 100 countries have announced partial or full lockdowns, air and intercity travel

is down by 70–90% compared to the previous year in major cities around the world (Dunford et

al., 2020). Also, under uncertainty as to when COVID-19 damage will be abated, increased

operational risks and shortage of liquidity would likely make shareholders consider a possibility

of selling stocks they hold, thereby leading to a sharp decline in stock returns of restaurant firms

(Ding et al., 2020).

According to a study by the Portuguese Restaurants and Hotel Owners Association, 75%

of restaurants stopped working for about two months, and only 25% were partially active, using

takeaway and/or delivery. It also states that 70% will not be able to pay salaries if there is not

timely government support, 30% of the companies were considering insolvency, and 60% clearly

stated that the governmental support is not adequate to their needs and indicated non-refundable

funding as a priority. This study also affirms that the impact on employment and invoicing is

tremendous and that it is necessary to determine more complete measures for direct support to

companies’ cash-flow so that they can survive and maintain jobs.

Due to the COVID-19 pandemic, restaurants worldwide, including China, have been

forced to protect public health by following food safety standards and adapting to the necessary

social distancing practices. Accordingly, restaurant diners who are concerned about food safety
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and unsure of whether it is truly safe to dine out, put more importance on the entire stages of

service consumption. Restaurants must make their best efforts to minimize service failures in

their service provision process and outcomes. According to Batat (2020), the government was

asked to declare a state of emergency and other entities were asked to be benevolent in the face

of the bankruptcy risk that smallest businesses would face due to COVID-19 and the subsequent

predictable economic crisis.

By understanding the characteristics of this pandemic, the financial impacts on the

restaurant business can be minimized if counterstrategies are applied. Thus, analysis of the

impacts on this sector is essential in order to strengthen financial resilience and sustainability

during and after this crisis (Kim, 2021; Kim, 2021; Lee,2021; Tang, 2021).

Crises in restaurants can be internal (poor management, poor service, and

low-quality products) or external (economic, political, and health issues). The solution

to internal crises involves corrective measures, but in external crises, entrepreneurs do

not have control over the business environment and are, therefore, dependent on government

support and measures to overcome the crisis.

LITERATURE REVIEW

According to Holmes (2008), People typically lack first-hand experience when an

epidemic breaks out and rely on media for the provision of information to update them on any

associated risks. As COVID-19 continues to wreak havoc in the restaurant and foodservice sector

globally, it is important to understand the role of media communications in promoting adaptive

responses, shifting perceptions of risk, and adhering to restaurant preventive measures.

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Understanding how the risks of COVID-19 are perceived can potentially enhance the

effectiveness of communications (Lohiniva et al., 2020).

A recent study concluded that media can alert the public to the potential spread of

COVID-19 as well as to prevention and control measures (Zhao et al., 2020). Preventive actions

merit serious consideration, particularly because individual jurisdictions have been unable to

handle the COVID-19 burden single-handedly (Ataguba and Ataguba, 2020). We believe that it

is time to examine the impact of both exposure and attention on preventive behaviors.

An analysis was conducted on 200 industry articles and categorized into three major

themes: expansion of take-out/delivery, innovative practices, and community outreach/corporate

support, each are further subdivided into additional themes. The systematic review is further

supported by personal interviews with industry professionals. This research finds that there were

many different approaches used in adjusting business models in response to the dining

restrictions put in place due to COVID-19. From these approaches, themes were developed

which resulted in uncovering some suggestions such as developing contingency plans, being

flexible and creative, eliminating menu items, investing in a communication platform and getting

involved with local government. In addition, some practices operators should be mindful of such

as selling gift cards and starting a crowdfund.

This research documents an unprecedented time for the hospitality industry by examining

how restaurant, bar and beverage producers around the country responded to COVID-19

restrictions. Distilling the multitude of information into succinct themes that highlight the

business model changes that occurred will aid future research as well as operators.
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The purpose of this systematic review is to highlight some of the business model changes

restaurants, bars and beverage producers undertook to modify their operations in order to not

only stay in business but also to better serve their employees and communities during the

COVID-19 crisis.

AIMS

Among the many industries impacted by the pandemic, the food and beverage industry is

unique, fulfilling some of the most basic needs of humankind. We aim to identify the challenges

in the food industry particularly in the Restaurants due to Covid-19 pandemic.

We created questions that are relevant to the study and everyone can have knowledge on

it. Given the circumstances, it was felt appropriate to take a mix stance of research, in that the

method of data collection was considered to be the email interviews. Email interviews are

becoming a commonplace in qualitative and quantitative research, and in current circumstances

where social distancing has been widely practiced, it was felt to be most appropriate for the

current investigation.

As per now, we currently encountering some difficulties to do this study. One of those is

hardly taking answers to the respondents. We are finding people who are fit in our questionnaires

so that they can help us make a solution to our problem. Also, the unstable internet connection

for both us the conductors and for the respondents.

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METHODS

We plan to conduct our study by giving questionnaires to the respondents through google

forms. We all know that the pandemic is not yet over so that we want to secure the safety for

both companies by giving them the link of the questionnaires.

It is important for us to know the data of the respondents in order to make a precise

finding to our study. The questionnaire included checklist, ranking/rating, open ended questions

and did not include any free-form re4sponse items, to assure the manageability of the collected

data.

RESULTS

DEMOGRAPHIC PROFILE

Age Frequency Percentage

26-30 years old 6 12%

21-25 years old 25 50%

20 years old and below 19 38%

TOTAL 50 100%

Table 1. Shows the frequency distribution of respondents according to age. It shows here that

12% of the respondents are between 26-30 years old, 50% are between ages 21-25 years old, and
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38% of the respondents are from ages between 20 years old and below. It means that the majority

of the respondents are from ages between 21-25 years old.

Gender Frequency Percentage

Male 19 38%

Female 31 62%

TOTAL 50 100%

Table 2. Shows the frequency distribution of respondents according to gender. The table showed

that 38% of respondents were male, 62% were female. It implies that the majority of the

respondent were female.

Closed-Ended Questions

Yes No

1.Have you noticed a big

difference in operating a
100% 0%
restaurant now that it is

pandemic?

2. Are you aware on the safety 100% 0%

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measures implemented at the

restaurant where you work?

3. Did many of your work mates

lose their jobs during the 86% 14%

pandemic?

4. Are you aware that you are

risking your safety every time 100% 0%

you go to work?

5. Do you think some

applications such as (StaySafe

82% 18%
PH) can help prevent the Covid-

19?

6. Are there more take-out

98% 2%
orders than dine in orders?

7. Would you dine at a

restaurant during the 36% 64%

coronavirus pandemic?

Table 3. Showed that in question 1, 100 % of respondents answered yes and 0% in no. Question

2 100% of respondents answered yes and 0% in no. And question 3, 86% of respondents

answered yes, 14% answered no. In question 4, 100% of respondents answered yes, 0% answered no.

Question 5, 82% of respondents answered yes, and 18% answered no. In question 6, 98% of
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respondents answered yes, and 2% answered no. And last, in question 7, 36% of respondents answered

yes, and 64% answered no.

Likert Scale

Strongly Strongly
Disagree Neutral Agree
Disagree Agree

1. My job is currently affected

14% 2% 20% 22% 42%
due to Covid-19

2. Provision of personal

protective equipment for all

10% 2% 26% 34% 28%
staff who have direct contact

with the customers?

3. I eventually see my current

job as a long-term provider 8% 10% 42% 30% 10%

despite of Covid-19 challenges.

4. I consider my job highly

affected because of Covid-19 14% 4% 14% 28% 40%

challenges.

5. Free monthly swab testing

18% 4% 38% 8% 32%
for all the restaurant crew

6. I am a bit worried for the 10% 4% 28% 24% 34%

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stability of my job due to urges

of this pandemic.

7. I consider my job as one of

the affected aspects

10% 4% 16% 26% 44%
particularly on economic

development.

8. Limited customers inside

the restaurant to avoid

12% 6% 16% 20% 46%
spreading the virus

9. health monitoring (e.g.

social distancing, measuring

14% 0% 12% 14% 60%
body temperature)

Table 4.

Question no.1, 14% of the respondents answered Strongly Disagree, 2% of the respondents

answered Disagree, 20% of the respondents answered Neutral, 22% of the respondents answered

Agree, and 42% of the respondents answered Strongly agree. In this case, most of the

respondents are strongly agree that their job is currently affected by the pandemic.

Question no.2, 10% of the respondents answered Strongly Disagree, 2% of the respondents

answered Disagree, 26% of the respondents answered Neutral, 34% of the respondents answered

Agree, and 28% of the respondents answered Strongly Agree. In this case, most of the

respondents are agree that the company should provide the personal protective equipment for all

the staff who had direct contact to the customers.

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Question no.3, 8% of the respondents answered Strongly Disagree, 10% of the respondents

answered Disagree, 42% of the respondents answered Neutral, 30% of the respondents answered

Agree, and 10% of the respondents answered Strongly Agree. In here, most of the answerer are

neutral that his/her job is long term provider despite of the pandemic.

Question no.4, 14% of the respondents answered Strongly Disagree, 4% of the respondents

answered Disagree, 14% of the respondents answered Neutral, 28% of the respondents answered

Agree, and 40% of the respondents answered Strongly Agree. On this question, most of the

participants are very much agree that their job is highly affected by the pandemic.

Question no.5, 18% of the respondents answered Strongly Disagree, 4% of the respondents

answered Disagree, 38% of the respondents answered Neutral, 8% of the respondents answered

Agree, and 32% of the respondents answered Strongly Disagree. On this subject, most of the

surveyors are neutral that they need a free monthly swab testing for all restaurant crew.

Question no.6, 10% of the respondents answered Strongly Disagree, 4% of the respondents

answered Disagree, 28% of the respondents answered Neutral, 24% of the respondents answered

Agree, and 34% of the respondents answered Strongly Agree. In this issue, most of the

respondents are neutral that he/she a bit worried for the stability of his/her job due to urges of

this pandemic.

Question no.7, 10% of the respondents answered Strongly Disagree, 4% of the respondents

answered Disagree, 16% of the respondents answered Neutral, 26% of the respondents answered

Agree, and 44% of the respondents answered Strongly Disagree. Most of the respondents in this

area are strongly agree that their job is one of the affected aspects on economic development.
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Question no.8, 12% of the respondents answered Strongly Disagree, 6% of the respondents

answered Disagree, 16% of the respondents answered Neutral, 20% of the respondents answered

Agree, and 46% of the respondents answered Strongly Agree. On this subject, most of the

participants are strongly agree that they should limit their customers inside to avoid the spreading

the virus.

Question no.9, 14% of the respondents answered Strongly Disagree, 0% of the respondents

answered Disagree, 12% of the respondents answered Neutral, 14% of the respondents answered

Agree, and 60% of the respondents answered Strongly Disagree. Most of the surveyors are

strongly agree that health monitoring is a must.

Question #1. What new things are restaurants doing to overcome COVID-
19 challenges and continue serving their customers?

4%
16%
Safety Protocols
Increasing of Take-out/
Delivery orders 80%
Others

This graph shows the result of a survey question in "what new things are restaurants doing to

overcome covid-19 challenges and continue serving customers". From this graph it is clear that

the majority of them answered following safety protocols with 80%, in which all workers must

follow safety procedures like wearing face mask and face shield, following social distancing,

sanitizing equipment in their workplace, and proper hand washes. However, 16% answered

increasing of take-out and delivery orders. It allows customers to control their pace of ordering
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hence limiting the number of personal interactions they encounter during the pandemic. The 4%

answered not related to the question.

Question #2. How has your restaurant changed since the pandemic and how
have you adapted?
Restaurants sale
dropped
10% 12% Reduction of Crew
26% 28% Schedule
Prioritizing Safety
24% Protocols
Adopting New
Normalsince
This graph shows the result of a survey question in "how was the restaurant change System
pandemic and how they adapted". This graph shows that 28% of respondentsOthers answered reduction
of crew schedule is a crucial change in their workplace. 26% of respondents answered that they
adopt the new-normal system in their workplace. The 24% of respondents answered they adapt
and prioritize the safety protocols in which they wear a double face mask and face shield,
sanitizing their area, and practicing social distance and proper hand wash. The 12% answered
that their restaurant Sales dropped because of a decreasing volume of customers. However, 10%
of others answered they find it difficult to adjust and accept the new-normal system in the food
industry.

Question #3. What challenges have you faced with the new shifts in opera-
tion?

Following the
safety protocol 22% 22%
Conflict on
Schedule 12%
Conflict on 44%
Transportation
There's no clear
answer

This graph shows the result of a survey question in "what challenges have they faced with the
new shifts in operation" The majority of respondents, 44%, had conflict in schedule. The limited
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crew is allowed in every shift, so they should be flexible in every station assigned. The 22%
answered following safety protocols. They practice sanitizing every piece of equipment and area
that the customer used or stopover. The 12% of respondents answered that they had a conflict on
transportation because there's limited public transport. However, 22% of respondents answered
n/a or not related to the question.

CONCLUSION
This study finds that there were many challenges that restaurant chains experience due to the
Covid-19 pandemic. It showed that there is a big difference in operating a restaurant when a
pandemic comes. They're aware that they are risking their lives because of a virus and several of
them lost their job during the pandemic. Most of the respondents are having a difficult situation
due to the pandemic. Most of them answered strongly agree that health is the most important.
Implementing a safety health protocol is a must not only for their health but also for the safety of
their customers. Many restaurants decided to limit their crews to avoid spreading the virus.
While the pandemic started, many establishments like restaurants implemented the skeletal
workforce for their crew's resulting in low wages.

RECOMMENDATIONS

Based on the conclusion of the study, the following thus recommended:

1. To the crews affected by the pandemic, you should sanitize yourself before and after your
work to prevent the spread of the virus
2. To the customers who avail of the restaurant’s products, you should follow the health
minimum protocol for your safety.
3. To the restaurant owners, you should require the vaccine for your team company and always
sanitize and disinfect your tools and equipment before, during, and after working hours.

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