Restaurants combat Coronavirus cashflow problems with gift vouchers

By Joe Lutrario contact

- Last updated on GMT

Restaurant tackle Coronavirus cashflow problems with gift voucher schemes

Related tags: Coronavirus, Fine dining, Casual dining

Restaurant companies including Harts Group and Kricket are asking their customers to purchase gift vouchers to combat the Coronavirus’s potentially disastrous impact on their cashflow.

In schemes likely to be copied by many other restaurants, the two London-based groups are incentivising customers by adding an additional percentage to all vouchers purchased.

Restaurants across the board are already reporting a noticeable drop in business as the Coronavirus crisis intensifies.

As cashflow-dependant businesses with high fixed costs - including rents, business rates and salaries - restaurants that suffer a prolonged drop in trade or are forced to close altogether are at serious risk of going under, especially if they have low cash reserves.

“We find ourselves in stormy times and whilst we love nothing more than dancing in the rain, we feel it is prudent to prepare ourselves accordingly,” writes Harts Group SEO Sam Hart in a recent mailer. 

“Coronavirus has implications for so many of us, and whilst thankfully it is not a significant health risk for most people, it could be genuinely ruinous for the travel and hospitality sectors. In short, if people stop dining out, restaurants will have no cash flow whilst our costs (salaries, rents, rates, taxes) will remain largely unchanged.”

The newsletter offers £1,000 vouchers that would be worth £1,250 - a discount of 25% - in Harts Group sites, which include restaurant and private members club Quo Vadis; Mexican restaurants El Pastor and Casa Pastor; and four strong Spanish mini-group Barrafina.

Hart also asks regulars to continue visiting the group’s venues. The newsletter also states that minimum spends for the group’s numerous private dining rooms will be dropped by 50% and that organisers will be able to rebook cancelled events (if cancelled within 72hrs of the booking) up until 31 September 2020.

Similarly, in a mailer entitled The Hospitality Industry Needs You, new wave Indian group Kricket confirmed that for the moment it was “business as usual” and offered “loyalty vouchers”. The vouchers can be purchased for any amount over £250 and will have an additional 20% added on as a goodwill gesture and are valid at all three of Kricket’s restaurants until the end of the year

“The decline in people dining out has a massive impact on our business, and to be completely transparent, when we don’t have a busy restaurant our business suffers immensely,” the mailer states. “Our rent, taxes and staff salaries all remain the same, and we need to be able to honour these.”

"It’s an obvious one. The biggest issue right now is cashflow," co-founder Rik Campbell told BigHospitality. "All the money we’ve made has gone back into the business or has been used to open new sites. We don’t have piles of cash sitting around. I’m not sure if we’ll see a huge uptake, but the response has already been quite positive.”

Related topics: Business

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