Coronavirus and Restaurants

April 10, 2020, about a month ago Californians were asked to “Stay home” to slow the virus. Just like that Californians went from a normal life to been confined at their homes. Been confined mean people won’t be able to leave their homes and spend money. This hurts small local businesses. Local restaurants and cafe rely of foot traffic and when the government restricts people to leave their homes. So although food service is considered “essential” during lockdown period, most of the local restaurants are closed because they know without foot traffic they won’t be able to make sales. This creates a chain reaction. No foot traffic means any sales, no sales mean the owners can’t keep the staff, and finally that leads to layoff.

The good news is current administration is considering SAFELY reopening the economy. No one knows the exact rules and guidelines yet. If I were to guess, I would think we would still be asked to keep social distance when eating out, going to work, and buying groceries. Standing in line to grab a bite might be discouraging to some people. Additionally, people still might be scared of stepping out and being around strangers for few weeks. For these two reasons, local restaurants will continue to suffer even after we open the economy.

At Kooberi our mission is to help local restaurants thrive during slow hours. It is a mobile platform that enables distributed local commerce. On Kooberi, local restaurants can send deal notification to people nearby in real-time creating a win-win situation. Here is a scenario, if you are a restaurant owner that experiences a downtime between the hour of 2 to 5, you can go to Kooberi Business app and send a deal, “Buy one pizza get one free”. Anyone who happens to be near your restaurant get notified of your deal instantly in real-time. Consumers on Kooberi do not need to look for coupon. We bring the deals to them. Restaurants would be able to fill their empty table and consumers would not have to waste time looking for coupons. A “win-win” situation.   

We have too many coupon companies in the market. Do we need yet another company in already crowded space? The fact is the traditional ways of attracting traffic such as coupons have hurt their margins and failed to generate more sales. This is because coupon companies have historically acted like marketing consultants, charged businesses a sizeable fee, dictated their marketing & pricing, and forced them to offer unsustainable steep terms thereby decreasing the margins to nearly zero and in some cases negative. As businesses shut down, the coupon companies’ struggle starts. The effect of this can be seen in over 85% loss of Groupon’s market cap since their IPO. Most other coupon companies are struggling as well. Most of the people use Groupon during lunch or dinner times. Restaurants are already busy during those times and do not need people to show up with a coupon. Another problem with this model is people get use to NOT paying full price for a meal. The restaurant owner hopes to instate consumers by giving a discount and hope that they would return. However, this is not what actually happens. In conclusion coupon is not a reliable way to drive sales.

When we go back to normal times, be sure to support your local restaurants. To get deals alerts from your local restaurants download Kooberi app for iOS or Android.