How Restaurants can Use Tech to Remain Competitive in this Challenging Climate

By Anx Patel, Founder and CEO, GoKart

Over two years on since the EU referendum, the UK’s restaurant and food sectors have been adjusting to the political and economic implications of the Brexit decision. Like many other sectors, businesses large and small have been faced with challenges associated with a weaker pound. Indeed, a report from the Government’s insolvency service found that 984 restaurants fell into administration in 2017 – a 20% rise on the previous year’s figures. Big names in the casual dining sector – Byron, Jamie’s Italian, and Carluccio’s to name a few – have all been forced to close their doors in the past few months. And most prominently, Gaucho Group fell into administration in July.

Anx Patel - Founder and CEO, GoKartWith Brexit just around the corner – the official date for our departure set for 29 March 2019 – there is much speculation as to what this profound political and economic transition could mean for UK restaurants. However, while the closures of these popular chains dominate the news, it is actually smaller independent eateries shutting down that UK consumers are most concerned about.

New research among more than 2,000 UK adults commissioned by GoKart revealed that 50% of Brits are concerned their local high street is being taken over by restaurant and fast food chains, driving out independent businesses. As a result, over a third (37%) of consumers have seen one or more of their favourite local establishments close in the past 12 months alone. Importantly, the research also showed that 53% of the country prefer eating at independent restaurants in order to support local businesses.

Despite the challenges facing restaurants, the sector find itself at an important and critical juncture. New technologies and innovations are transforming the way local, independent eateries can manage their operations and improve their overall efficiency. Moreover, the restaurant sector still remains one of the UK’s fastest-growing sectors. In 2017, the number of restaurants operating in London rose by 3.1%, and this increase was fuelled predominantly by small to medium-sized establishments.

So with an obvious appetite for independent restaurants, what can small businesses do to ensure that they remain competitive? Part of the answer lies in tech – with so many businesses feeling the financial pressure, restaurants need to embrace digital innovations and utilise the benefits it can provide.

The growing takeaway sector

Takeaway applications such as UberEats and Deliveroo have been soaring in popularity over recent years, with the shifting eating habits of British consumers driving this growth. More and more people appear to be opting for the convenience of ordering take-away instead of venturing out for a sit-down meal at a traditional restaurant.

Spending on takeaway grew to a massive £9.9 billion in 2016 – up more than a third (34%) since 2009. This means that the takeaway sector has actually become one of the strongest performing areas of the UK economy over the past 10 years.

For restaurants seeking to increase brand awareness and also acquire more customers, offering a delivery service through websites and apps is a cost-efficient way of ensuring people in the local area are aware of their business.

Managing the Supply Chain

Sourcing cheaper ingredients can also be accomplished with the help of apps currently available on the market. With higher import costs and rising food prices in the UK, it can be more cost-effective for restaurants to switch to local produce. Apps such as GoKart make it much easier for smaller, independently run establishments to compete with larger chains and minimise extra costs.

While large chains have the advantage of ordering ingredients in bulk, and thus enjoying a discount on the wholesale price, independent restaurants face higher rates due to the smaller quantities of produce they require. By bringing together hundreds of independent outlets to order from a number of suppliers through its online and mobile platform, GoKart allows small restaurants to enjoy the same financial savings. Furthermore, there are additional benefits that come through digitising and simplifying the ordering process, saving them valuable time. Adopting tech can thus improve a restaurant’s profits in such a competitive environment.

Building an online presence

Other technologies that restaurants can cleverly utilise include social media channels and digital marketing tools. A recent study showed that 83% of the adult population in the UK now uses social media, with Facebook dominating the market.

Today, customers are more likely to look up potential venues beforehand to read recent reviews, and also consider the variety and quality of food offered. As such, investing time in creating a well-designed and intuitive website, as well as focusing on online customer engagement through paid search and social, is an effective way of fostering brand loyalty. Moreover, it has been shown that people are much more likely to visit restaurants based on recommendations from their friends, and thus even simply creating a Facebook or Instagram page where customers are able to share their experiences can be a great way of attracting new visitors.

In this challenging climate, being aware of the opportunities on offer through tech can help restaurants minimise their costs and promote their brand. Smaller businesses can often struggle to keep up with changing economic circumstances –unable to get the same advantages that big restaurants rely on. However, there are plenty of resources at your disposal that can help you widen your audience reach, entice new customers, and ensure that your supply chains are strong enough to endure the competition.

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