The Financial Effects of COVID-19 Pandemic to Cafe Shops in Makati City

A Quantitative Research presented to

Maricar Dela Cruz
Mapua Institute of Technology

In Partial Fulfillment of the Requirements in Methods - Business Research

(BAC114-1-AM12)

by
Magsumbol, Marion Coner Abigail S.
Roto, Kristelle Anne C.
Rotubio, Kobe Ryan B.

August 2020

Prof. Mac Franceau Panuncialman

Thesis Adviser
 CHAPTER 1

INTRODUCTION

This chapter of the paper presents the problem and its setting. It includes the background of the

study, the statement of the problem, significance of the study, and scope and delimitation of the

study.

Background of the Study

While COVID-19 continues to spread globally, brick and mortar businesses are

struggling to keep up with the changes that come with it. The global pandemic has put a strain

and led numerous businesses to shut down with the demand currently declining. Brick and

mortar businesses are one of the most affected during the pandemic. Most stores were forced to

close during the lockdown and many workers have lost their jobs. Businesses are coping with the

impact of the pandemic through adapting and shifting their strategies in order to continue their

operations. In a time of social distancing, most businesses are adjusting through focusing on

ensuring the safety of their employees and customers. They follow health and safety protocols

while shopping inside the store.

Brick and mortar businesses are at risk of falling behind while e-commerce continues to

grow exponentially. Since the start of the pandemic and social distancing was adviced, many

consumers have been compelled to shift to digital shopping. This provides the most convenience

and it is the safest way to buy their basic necessities without the risk of contracting the virus.
There was also growth in the use of online education and online entertainment. The pandemic

has accelerated the world’s transition to digital commerce.

According to Bondoc (2020) “Brick and mortar retailers are expanding their online

presence and are expected to create their own e-commerce sites and use different social media

platforms. They are also utilizing their existing sites in malls”. Expanding their stores online is a

way for them to reach more people, especially their target audience. During the pandemic, most

households have started to rely on home delivery.

People’s consumption patterns have changed. There was an increase in the demand for

takeout and cleaning products as people spend more time at home during quarantine. Industries

such as related to healthcare and medication are thriving (Jaworski, Kohli, & Sahay, 2000). As a

result of the lockdown, there was a sudden increase in the demand for medication.

Statement of the Problem

The main problem of this research was to look for the effects of COVID-19 pandemic to

cafe businesses in Makati City. The result of this investigation will be the basis for the

assumptions that made the businesses of the physical stores a strategic type of business.

Specifically, this research aims to answer the following questions:

1. How did the COVID19 pandemic affect these cafe businesses financially?

2. How did these businesses adjust or cope with the current situation?
Conceptual Framework

The diagram shows the different variables which would be necessary to answer the

objectives of the study. Revenue and profit would answer how much the business gathered

income and how much they earned before and during the pandemic. Expenses and losses would

answer how much the business lost their capital before and during the pandemic. Both of these

variables would be gathered through questionnaires and the financial statement of the business.

Data gathered would then be processed and analyzed to answer how the COVID-19 pandemic

financially affected the businesses.

Significance of the Study

This research would be conducted to determine the effects the COVID-19 pandemic has

to cafe stores in Makati City. As we all know, the Philippines has been in lockdown for five

months now, in which a lot of businesses are closing up. This greatly affects the income of the

establishment because they could not get any customers, meaning they cannot generate any

income. And having no income means that they would have a hard time paying the rising

expenses.
Scope and Delimitations of the Study

The data collection will be conducted in and around the businesses in Makati City. The

downside of this study is that it would only focus on businesses in the Makati City area. The

study will be done through the utilization of questionnaires to the physical stores as a survey and

reference, and through the data gathered in the financial statements. By using this strategy, the

researchers will be able to know the effects of the COVID-19 pandemic to the cafe businesses in

Makati City and the actions that they took in order to counteract those problems.
 CHAPTER 2

REVIEW OF RELATED LITERATURE

This chapter of the paper presents the review of related literature, the conceptual

framework, the research hypotheses, and the definition of terms

Spanish Flu of 1918

In 1918, during the final phase of world war I, the world was struck with a pandemic, the

same as what is happening now, which was called the spanish flu. Approximately one-third of

the population was infected with the virus and at least 50 million died. According to Garrett

(2007). In his research, titled “Economic Effects of the 1918 Influenza Pandemic Implications

for a Modern-day Pandemic”, he explained exactly how the spanish flu affected the world, in the

hope that the people would avoid the same mistakes, if ever a pandemic were to happen again.

He gathered two articles which were called: The Arkansas Gazette (Little Rock), which was

located in the city of Arkansas, and The Commercial Appeal (Memphis). These two articles

discussed what happened to their economy during the pandemic.

Local Literature

According to Rivas, “Malls are likely to shrink, while hotels may turn into offices”. With

how the pandemic is now changing the new normal around the world, what seems to be the best

way of income generation pre pandemic is now the worst way. According to him, bigger is now

worse, as people are wary of going out of the safe zones in fear of contracting the virus. Before,

having bigger space means that the business can accommodate more customers. But with the

arrival of the COVID-19 pandemic, having a big space means more expenses now, since only a

few customers would be able to get inside a store or an establishment, a lot of space would be
wasted because of that. If before, a restaurant can accommodate 30-40 people at once, now it can

only accommodate around 10-20 people, half of what it used to be. This means more expense on

the business since the income would only be half, it would need to cut down the now

unnecessary expenses. But according to Rivas, businesses should not opt to go full ecommerce,

due to the fact that after the pandemic is contained and people are free to go out, they would

flock to business establishments. Brick-and-mortar only businesses should seek options on going

digital, without destroying their physical businesses, as that is what is the new normal during this

pandemic.

Research Hypothesis

H0: The Physical Stores do not affect the Difficulty of business in Makati City

H1: The Physical Stores affect the Difficulty of business in Makati City

Definition of Terms

Brick and Mortar store. Is a traditional type of business wherein it is a physical store which

consumers could go inside and browse the products.

Customers. Through this study, the customers will have a clear representation of their desired

physical stores that they want to check. Customers could appreciate the efforts done by sales

employees just to accommodate them. One of which is through ambiance which is the leading

factor of their duration inside the joint. Also, customers will become aware of the current
situation happening in the market stores that could even refine their wants for the products and

services.

Café Restaurant Owners. The study will benefit the café restaurant owners for they will be

informed of the current situation in the market which is the appropriate way to deal with

customers through the manipulation of ambiance. Owners will surely find ways on how to

improve their current business strategy on the firms’ ambiance by making some adjustments on

the restaurants’ operations

 CHAPTER 3
METHODOLOGY

This chapter presents the discussion on the research methodology of the study,

sampling technique, research instruments, process of data gathering, and that will be used for

the accurate delivery of data analysis and interpretation.

Research Methodology

The descriptive, non- experimental, survey, approach will be used by the researchers in the

study. The research is descriptive for it ought to find the views of customers towards the

ambiance that present in physical stores. The research is quantitative and qualitative. Also, the

research is considered non- experimental because there will be two sets of subjects (predictor and

criterion) that will be compared in terms of the response gathered from the customers. Moreover,

the researchers will be constructing an unstructured survey form. By definition, a survey

consists of a set of questions that are answered by the respondents based on their decision

making skills that allows them to think critically regarding the questions’ ideas. In this type of

survey, the researchers will use the individual interview approach to let interviewees based their

answers purely on their opinions regarding the questions given by the researchers.
Participants of the Study

In this study, the researchers will conduct questionnaires that will need 30 businesses in

Makati City. There will be a minimum of 30 respondents that will be answering the questions

thru online google forms. Only the respondents who are currently in the businesses during data

gathering will be considered as a participant of the researchers’ study. The age, gender, and

occupation will not be taken into consideration during the data gathering of the researchers.

Sampling Technique

Non-probability sampling will be used because it is based on the judgment and criteria of the

researchers. Specifically, the availability sampling shall be incorporated in this chapter. By

definition, availability sampling is the willingness of the person as the researchers’ subject to

interact with the research study. Those who are willing to respond to the researchers’ questions

will automatically become the respondents.

Population and Sample

The population would be businesses located around Makati City, and the sample size

would be 30 physical businesses. The method of choosing the sample would be stratified

sampling, wherein the businesses would be divided based on the location where they are at.
Procedure

For the purposes of this research, the writers will collect the data through an online

survey. The questionnaire will be distributed among 30 brick and mortar businesses in Makati

City. The participants from the different businesses that were chosen in the research will

complete the survey online thru google forms.

Procedure Timeline:

Preparation of the questionnaire

Distribution of the online survey to 30 brick and mortar businesses in Makati City

Collection of data

Analysis of data

Write-up and reporting of the findings

Research Instrument/ Interview Questions

The instrument that will be used is a researcher-made questionnaire to gather the

information needed from brick and mortar businesses that are in Makati City. Questionnaires were

chosen in this research becau se it is a quick and efficient method in the collection of data. The

questions were drawn out based on the different literature and readings of the researchers.

1. What are the effects of the Covid-19 pandemic to the business?

2. How did the business adjust and cope with the current situation?

3. Is the physical store still open and running?

4. Did the business shift to selling the products online?

Data Recording Analysis

The researchers will conduct an online survey thru google forms. In this manner, the non-

probability sampling will be used for it based on the judgment and criteria of the researchers.

Specifically, the availability sampling shall be incorporated in this chapter. By definition,

availability sampling is the willingness of the person as the researchers’ subject to interact with

the research study. Those who are willing to respond to the researchers’ questions will

automatically become your respondents.

Statistical and Mathematical Tools Used

The statistical tool this research would be using would be the chi square. The variables

present in this research would be the COVID-19 pandemic, which is the independent variable,

and the dependent variables would be the factors which the pandemic affects the business, which

are: profits & losses, and expenses & losses.

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