All shops and restaurants were closed overnight on March 14 in the Czech Republic. It was a surprise move from the government designed to stop COVID-19 contagion in its tracks. The number of confirmed cases has risen to nearly 3,000 since that time, while the death statistics have now reached double digits. But for healthy restaurant owners and retailers, the challenge is how to keep their companies on life support until the ban on trading is lifted.
For restaurants, the ban is catastrophic. There’s no ban on employees of restaurants actually going to work, but it’s impossible to let any customers in the door. To produce at least a bit of cash flow, owners are taking advantage of a loophole which allows the selling take-out orders. But it’s obvious that this is not sustainable in the long-run, so numerous restaurants have made agreements on the fly with companies specializing in food deliveries and set up their own online stores.
In fact, the number of online shops has exploded, with the online shop platform provider Shoptet counting 270 openings since the middle of March. And the leading sector? Restaurants and foodstuffs.
“We’re seeing a dramatically higher pace of free trials for our test version, it’s up to three-times the usual,” says Shoptet’s director Miroslav Udan. He told Lidove noviny that his company is working with the ride sharing app Liftago to connect with new e-shops to offer quick delivery services around Prague. The biggest number of new online shops are being opened by restaurants, cafes, sweets shops and grocery stores.
One example of this trend is the food wholesaler Elite Foods. It was set up by Lee Broster six years ago for the purpose of selling British brands and products to restaurants in Prague. Over time, Broster expanded the range of goods he sold as well as his customers which eventually came to include chains such as Globus, Albert and Tesco as well as online outfits like Rohlik and Kosik. The business had grown to such an extent that the Englishman was expecting to have to move out of their current premises in Prague 6 near Suchdol for lack of storage space. “We’ve been doubling turnover every year and last year we had turnover of CZK 40m,” says Broster.
The restaurant lockdown was a massive blow, one Broster saw immediately could be fatal for his company and its 12 employees. He was forced quickly into difficult decisions. “Last week we let six members of staff go,” he says. “I’d never let people go before. Today we’re living on a day by day basis, trying to assess everything.”
But in the meantime, he took quick action by deciding to use the company’s three delivery vans to begin selling and delivering to homes instead of restaurants. Fortunately, he said, Elite Foods took orders from its clients through an online web page, so he had an existing platform to work from.
But the site had to become more consumer friendly and the products had to be offered in consumer portions instead of selling only in bulk. “You can’t sell people boxes of a single herb,” he says. There were countless other practical matters to solve. Portable credit card machines didn’t show up and become operational until a week ago, for example.
With their usual clients not buying, Broster has his sales team calling each customer that signs up and orders food to ask if there’s anything else they need or any way the company can help. When he’s not running the business or filling vans, Broster himself is making deliveries, which are far more time consuming than before. But despite all the work, Elite Foods has only clawed back 20 percent of their original sales volume, so Broster is left having to hope that business continues to grow.
To increase his volume of sales, he’s making agreements with other wholesalers such as Rustic Jerky, a local importer of wines and Vinohradska Pivovar to offer their products as well through his shop. Survival remains a week-to-week affair and ultimately, it will depend on how long the lockdown continues for. “Every day counts,” says Broster. “All of our clients were on 14-day or 28-day invoices, but this crisis means we probably won’t get our money until later. The thing is we still have pay our suppliers or else we don’t get any more product. We’ve got to try to manage cash flow.” he says he continues to add new items to his offering daily and that many small businesses are joining together to help each other as possible.
Will they continue to sell to consumers once the lockdown is lifted? “As long as the consumers want and need this type of service I don’t see why not,” says Broster. “What I wouldn’t want to happen is for us to do all this hard work and the end-consumer gets used to us and we then say good-bye.”
