7 Ways Restaurants Can Increase Their Profit Margins: Even Amidst A Pandemic

With the pandemic causing an undoubted rise in the effort it will take to for restaurants to merely survive, let alone increase their profit margins, there’s no denying that food businesses must adapt to this new climate in order to remain profitable. The question is: How?


Running a business isn’t the easiest of tasks. In fact, arguably, it is one of the most difficult markets to operate in, considering the competitive nature of the industry. In this modern day and age, there are just so many options for people to choose from that if you’re slacking even in the slightest, you could potentially lose a considerable amount of sales to your competitors. For this reason, restaurant owners always have to be at the top of their game, growing and changing with the tide in order to keep their restaurant hustling and bustling.

As we’re all aware, the coronavirus pandemic has made the task of maintaining a good profit margin increasingly difficult for restaurants, especially considering the amount of time restaurants had to shut their eat-in facilities during quarantine. Even though eat-in is now open, recovering the cost of it being shut for quarantine whilst operating with respect to social distancing laws is going to make increasing (or even re-obtaining) profit margins far from a cakewalk, irrespective of any government schemes.

So, what can restaurants do to improve their profit margins?

Here are 7 suggestions:

1) Promote Direct Ordering

It’s no wonder why most food businesses have such a love/hate relationship with third-party delivery aggregator platforms. On one hand, by enabling ease of ordering for customers they allow restaurants to gain access to a new consumer base by giving restaurants more orders through their vast consumer bases. It is a great way to reach new customers and can work as promotion by introducing your restaurant to new people which the restaurant may not even have been able to reach by regular advertisements. Moreover, they offer their own delivery drivers, taking a huge burden and expense off the shoulders of the restaurant. However, all good things do come at a cost. In exchange for offering all these wonderful benefits, they eat up a significant share of the restaurant’s revenues in the form of commissions. By paying a hefty sum of their revenues to these third-party aggregator platforms, restaurants end up taking a huge hit to their profit margins. Moreover, throughout this process of ordering and delivering, these aggregator platforms continue to promote and forefront their own brand. By promoting direct orders to the restaurant, paying these commissions can be avoided and hence profit margins can be improved by a drastic amount. In order to do this, the restaurant should have multiple easily accessible means of ordering, for example, online ordering from the restaurant’s own website is a great up and coming ordering method which can drive a considerable amount of traffic towards your restaurant. Looking into implementing an online ordering system is definitely worth it! Having offers and promotions that beat the discount offered by the aggregator platform can incentivise people to stray away from their mobile applications and instead order from the restaurant directly. Whether they order online, via call or simple pick it up themselves, the need for the aggregator and hence the need to pay commissions is eliminated, the restaurant’s brand is promoted instead of just the aggregator, and the credit for the good promotional offer is attributed to the restaurant instead of the aggregator, leading to good reputation and hence increased sales in the long run.

2) Change Your Menu

Consumer needs are volatile. All business owners are aware of this fact. And while restaurants take care to change up most factors according to the way the wind blows, one extremely integral, and arguably the central, factor is surprisingly often left unattended or ignored. Restaurant menu’s will of course tend to retain the core specialties and basic items that they hold from day one throughout the course of their existence as they are technically what gives the restaurant its individuality. However, having the same menu for extended periods of time can lead the existing loyal customers to get bored of the items offered, there will eventually be a day when they’ve tried most things on the menu and will hence tend to eat somewhere else for a change of taste! Additionally, changing the menu according to the trends or seasons is always a great marketing tactic. Many brands have mastered this by introducing new menu items specialised for each occasion, season, or festival. Whether it’s Christmas, Halloween, or just a summer special, it definitely piques the interest of regular customers and may even beckon new customers to try out the new themed items. Another great benefit is that when a new item is added to the menu, regular customers are going to be interested to find out more about this new addition and hence perhaps try it out by ordering from the restaurant, a keenness and interest arises in placing an order for the restaurant that didn’t exist before but was brought to life with the curiosity of trying the new menu items offered. It almost acts as promotion and brings attention to the restaurant, showing that the restaurant is alive and doing something new, compared to the same old regular promotions or just another discount offered by a restaurant lost between every other one in their mailbox. Adding a special item unique to the restaurant is a great way to really grab attention. Sure, you can change up your menu with the seasonal themes, but don’t forget that so will most your competitors! Having a menu item that no one else can offer them like you do is something they cannot substitute. It is likely to become the restaurant’s USP (Unique Selling Point) which adds originality and individuality to the restaurant, bringing something new to the table which competitors cannot exactly duplicate. All you have to do is find the niche of your restaurant and create something worthy of making your restaurant stand out!

3) Added Value

A restaurant offers much more than just food, it offers the customer an experience. As much as it is about what is put on the plate, it is about where they’re placing the plate too. From music to lighting to the service offered, it’s about creating an ambience for the customer to truly enjoy the hospitality of the restaurant. This works for delivery as well, from the professionalism of the delivery driver to the quality of the packaging used. All of these factors create nothing but value for the food and the experience. Added value is the difference between the price the product/service is sold for and the actual cost of the inputs involved in manufacturing/offering the product/service. So, added value is simply the increase in value that the business creates by undertaking the “production process” or carrying out the service in its entirety from scratch. A good example is, imagine a celebrity chef preparing and serving a dish at his 5-star restaurant, it’s likely to have a relatively high selling price, even if the same exact dish with the same exact ingredients is replicated at a lower rated restaurant by a lesser known chef. The value added to the dish by the chef and the good reputation they and their business enjoy gives them the ability to charge the customer a higher selling price because they’ve managed to add value to what they’re offering using their status. Most customers, recognising said value, will also likely be willing to spend more money because they recognise that it is value for money. In short – upsell, upsell, upsell. This can be done by building a brand and establishing yourself (like the celebrity chef), offering conveniences like online ordering or delivery services, focusing on the quality of service by hiring well-trained staff, or focusing on appearances from the way the food is plated to remodelling the interiors to give a better ambience. By implementing such changes, the restaurant will be able to charge a higher selling price and hence increase their profit margins. However, you may be thinking – wouldn’t charging a higher price lead to reduced demand from customers on a budget? Well, there is a way to add value to your service without raising the selling price. Since added value is the difference between the selling price and the cost of making the product/service, you can also add value by reducing the cost of production. There are many ways to do this, like implementing economies of scale by buying raw ingredients in bulk from your supplier, but remember not to compromise on quality! You want to ensure value is added after all.

4) Feedback

Restaurant owners try their level best to try and offer what according to them is the optimum level of service. There are things learnt from other people, through various mediums of sharing information and knowledge, and of course just the things gathered with experience. However, at the end of the day, this is all looked at and hence implemented from the personal perspective of the restaurant owner and what they interpret or reckon is the right step to take or change to make. Often, the primary audience that is itself to be at the receiving end of these changes is overlooked as the biggest and most apt source of information for most restaurant. Getting a first-hand download of the thoughts and outlook of the people a restaurant is catering to is a great way to ensure that right changes are being implemented at the right time, it is also the greatest tool to find out exactly what needs to be altered in the first place. Basically, conducting market research throughout the operation of your business is an incredible way to remain on track for a food business so that they keep meeting their main target of keeping their customers satisfied. This leads to a good reputation, which means new customers join and the happy customers also keep coming back. Increased sales, increased revenue, increased profits, and in the long run the priceless benefits that come with having a good reputation. Second-hand research is a cheap, quick, and easy way to get the latest information that you require. The easiest means for this is the internet. The sheer vastness of the internet enables restaurants owners to be able to access limitless amounts of data within minutes at practically no significant cost whatsoever, however it does have its downsides. The validity and accuracy of the data cannot exactly be vouched for as the information may be outdated or even false entirely because the internet is after all an unsupervised plane where anyone can upload anything at their own whim. Moreover, since its second-hand the information that is being searched for in particular may not even be available or apt to the needs of the restaurant owner or their demographic. First-hand data research, on the other hand, gives the promise of validity and complete accuracy to the restaurant owner’s particular needs. Although it may take more time and effort, and maybe even have a slight cost attached to it, it will surely guarantee results. Feedback forms with menus, verbal feedback at the time of service, online feedback forms with incentives, etc. are all means of collecting data from the restaurant’s consumer base. This data can hence be analysed and useful findings can be used to implement beneficial changes which will boost the restaurant’s profit margins and consumer satisfaction in the long run.

5) Build Consumer Loyalty

Restaurants are often so focused on gaining new customers that retaining the existing customers is a task they often tend to overlook. In the efforts to try new things and achieve gaining new customers, restaurants unknowingly let go of a consumer base that was already showing interest and building. The worst part is that it would’ve been so much easier to retain them than implementing all these new tactics in order to gain new consumers altogether. Moreover, the funds, time, and effort that would be required in order to implement these new tactics like promotional offers or advertisements would’ve been so much more than what would go into pleasing existing customers. There are of course the little things which over a course of time lead to increased consumer loyalty, like exceptional customer service, not only in terms of quality but in terms of personalisation, by making each customer feel valued and important by remembering them and their preferences, favourite orders, and perhaps the names of their friends and family. Consumer loyalty is the lifeblood of a business. While restaurant owners go out seeking ways to grow their business, regular consumers give surety that the business will keep running by giving a steady stream of revenue that the restaurant owner can rely on as they make efforts to amplify the business. One great way to retain customers is to make either a club or loyalty card. Recurring customers get to pile up their tokens and after a specific number of visits to the restaurants they get to enjoy certain benefits from the restaurant in the form of either free dishes or discounts or basically anything that could be of some value to a customer. By incentivizing visits to the restaurant by regular customers, the restaurant ensures a steady stream of sales and hence doesn’t have to suddenly raise costs for promotions or offers in order to survive due to lack of customers. This enables restaurant owners to slowly but surely, increase their profit margins.

6) Diversify Your Services

Although there are many things a restaurant can do in order to differentiate itself from its competitors, whether it is the conceptualisation of food or the experience of the service offered by adding themes or special elements, the fact is that there will be another restaurant with its own special qualities giving competition irrespective. Because, no matter how much a restaurant tries to differentiate itself based on what it offers, at the end of the day the service offered in actuality remains just serving people food to eat in a hospitable environment. By diversifying into different fields of the actual services offered by the restaurant, new avenues can open in the form of new consumer groups or traction with new target audiences. A common service of this sort that restaurants diversify into is offering to host events for various consumers. Whether it is a birthday party or simply an office meeting, allowing customers to block out a time slot and offering the restaurant to them as a sitting space while catering is a great way to earn some good revenue. It can also act as great promotion, as if a social event is hosted, it is likely that people will post about it on their social media and converse about it with their family and friends, hence helping spread the name of the restaurant through the internet or word of mouth. This will lead people to not only try out eating at the restaurant, but perhaps think of hosting their own event there as well. Hence making the cycle go on. An underappreciated service is offering a buffet. Food can be made in bulk and is more generalised rather than specific orders, hence saving the hassle of a busy kitchen with high wait times. Moreover, since buffets are self-serving, it is much easier to coordinate and organise. Simply charging an entry fee and allowing people to explore the menu themselves through the buffet is a great way to let people familiarise themselves with the restaurant. Moreover, since it is a buffet, it is highly likely that large groups of people will be interested in paying a visit, leading to a spike in sales and reach to new potential customers.

7) Start Delivering

Delivery is the future of the food business industry. With a large chunk of customers quickly and continually deviating towards food deliveries for their own comfort and safety, the demand for an efficient and cost-effective delivery mechanism for food businesses is at an all-time high.

Given that Covid-19 has changed the way everyone eats, works, and lives now; food business’ “new normal” must include a food delivery option to reach new potential customers and keep serving existing customers.

How can you find a reasonable and reliable solution to the food delivery changes in demand?

Just SAYLALALA!

Arising from – an absent in-house delivery driver, the lack of efficient delivery riders, and the loss of revenues owing to heavy third-party aggregator commissions, Saylalala was born. Inspired by a 10-year-old’s sheer curiosity around the how’s and why’s of food delivery in the UK, Saylalala was designed to address the food delivery challenges faced by restaurants, takeaways and cloud kitchens in the UK!

Saylalala aims to transform the food business industry by providing an economical delivery solution that enables ease of business, operationally and commercially, and hence create an efficient, ground-breaking, and sustainable food delivery ecosystem. We strive to provide the most rewarding and transformative delivery solution that enables restaurants to strengthen their own business, rather than becoming a slave to all the aggregators in the market.

Saylalala connects drivers directly to restaurants on demand via the Saylalala app. Restaurants pay a minimal fee to access our army of delivery drivers, fondly named De’Bees, paying only for the deliveries made and that too at a nominal competitive price. Food businesses now have a delivery solution and delivery drivers an opportunity to earn extra money on their own terms and time, all just a tap away with Saylalala.

The beauty of Saylalala is that we cater to not just the needs of the food businesses in the UK, but also to each and every single individual in the UK that is currently struggling to provide for themselves or for their family under the weight of this pandemic. By creating an easy and innovative way to enable people to earn money, be it anybody, we create a job for you to do even when you think all avenues have shut their doors on you – the perks of it all are just additional incentive! Anybody and everybody is welcome into our De’Bee family, simply by downloading the app, you get access to a world of opportunities through Saylalala Driver.

We wish to provide a solution for everyone. A breakthrough for the entirety of the food business industry that has been affected by this pandemic – whether it’s a restaurant or a driver (simply someone struggling to find employment).

We have a vision to help food businesses in the UK keep up with the challenges brought upon them, and in fact, end up not only eliminating the problems at hand but keeping it profitable while doing so!

Our model is simple, no commissions or fixed term contracts, just SAYLALALA, where drivers meet deliveries.

You can learn more by visiting www.saylalala.com, where you can also find all necessary links to download the Saylalala Restaurant or Saylalala Driver application (or both if you please!) and any other helpful information on the brand of Saylalala and what it stands for.