5 Reasons Why SWOT Analysis Is A Must For Restaurants Post Pandemic

SWOT analysis for restaurants

The pandemic has wreaked havoc worldwide and dramatically changed how the restaurant industry operates. The second quarter of the year 2020 was like a new lease of life for restaurants, some of which reopened their brick and mortar outlets while others shifted to delivery-only services. This is being done keeping in mind the changing customer preferences and future demand potential. In such times of uncertainty, SWOT analysis is a handy tool for restaurants to identify the areas that they need to focus on. 

Restaurateurs who have bitten the bullet to come up with a new restaurant right in the middle of the pandemic should definitely include SWOT analysis in their business plan. 

This article will put forward the reasons why a SWOT analysis is a must post-pandemic. But first, let us understand what SWOT analysis is. 

What Is SWOT Analysis?

A SWOT analysis is all about analyzing every aspect of your restaurant thoroughly and working on the strengths (S), weaknesses (W) while exploring the opportunities (O) and threats (T) to make the business sustainable. 

Strengths: The strengths of your restaurant are decided by internal factors such as employee satisfaction, good inventory management, good sales and marketing, the USP, etc. You need to realize those strengths and work to make them even better. This will not only keep you ahead of the competition but also make you stand out. 

Weaknesses: The weaknesses of your restaurant also depend on internal factors. Flawed procedures, incompetent staff, untapped potential of specific areas, financial mismanagement, unattractive marketing tricks, etc., are some of the major weaknesses of most restaurants. Restaurateurs should identify and accept their flaws instead of denying them. They should work towards improving the areas where they are lagging for the betterment of their restaurant business. 

Opportunities: Opportunities arise when the market is studied. Learning about the market to which your restaurant belongs is essential to spot new trends and if there’s an underlying opportunity to grab. Participating in charity events, food festivals, and vaccination drives are good opportunities to grab on to. 

Threats: The restaurateurs should realize the threats that can create problems for their business in the future. A SWOT analysis helps to identify the risks and provides solutions to prepare for them. Post COVID-19 outbreak, exposure to the virus is the biggest threat to all restaurants. Other threats might include COVID variants, legal threats, rising competition, etc. 

5 Reasons Why A SWOT Analysis Is Essential For Restaurants

A SWOT analysis provides insights into the present performance and future potential of the restaurant business. It helps identify what needs to be improved, thereby lifting the restaurant’s sales. Applying the lessons learned from SWOT analysis the right way can do wonders for restaurants.

Here’s how conducting a SWOT analysis can help run your business effectively.

1. Help Optimize Costs 

Optimizing costs is one of the primary aims of every restaurateur amidst the pandemic. Nothing can go right if the finances are not well managed. Hiring staff, buying inventory, renting the space, and every other restaurant operation is capital dependent. Thus, keeping a check on the finances is crucial, and you should figure out ways to do that. 

Conducting a SWOT analysis also highlights the weaknesses and loopholes in cost management. You will come to know the areas that need more spending and where you need to tighten your costs. Not just this, it prepares you for future threats and enables you to optimize the capital and operating costs of your restaurant, according to the situation.

SWOT analysis
Source: Pinterest

2. Get New Ideas 

Playing to your strengths enables you to introduce new ideas to fill the gaps in the management of your restaurant. Building strategies around sourcing, food production and front-of-house management and coming up with out-of-the-box ideas for your restaurant can help your business in numerous ways. 

A SWOT analysis also helps to recognize the opportunities and grab them at the right time. For instance, Taco Bell introduced a taco filter on Snapchat to celebrate the festival Cinco de Mayo. The filter had 224M views in a single day and generated good visibility for the company. Restaurateurs can come up with such creative ideas considering their strengths and the incoming opportunities to establish their brand and grow their business.

3. Gain An Edge Over Competitors

In the fiercely competitive UAE restaurant industry, gaining an edge over competitors can be tough. Analyzing the weaknesses and working on them will lift your position in the restaurant industry. Moreover, improving what you already excel in gets you the lead in the market. 

A restaurant well aware of its weaknesses is usually better prepared to face each hurdle that comes its way and has a better chance of surviving them. All of this is possible with a detailed SWOT analysis. 

4. Boost Sales

Boosting sales has been a challenging task for the restaurants since the pandemic as the customers have become highly apprehensive about eating out. A SWOT analysis helps you bring out smart solutions to problems like low sales. 

Participating in events or food festivals are good opportunities for restaurants to boost their sales. One should identify these opportunities in time and know how to reap the maximum benefits. 

5. Prepare For The Worst

A SWOT analysis can make you aware of your shortcomings and how they can be improved. It also highlights the areas where you already have good efficiency. Data-based insights from your POS system can enable the restaurant to counteract any threats. 

Restaurant owners who realize their strengths and weaknesses will better cope with a situation like the pandemic than the ones who do not. COVID-19 has given rise to many threats like reduced operating hours, budding competitors, financial threats, reduced sales, etc. A proper SWOT analysis lets you identify the drawbacks and optimize the operations wherever required.

All these points not just make restaurant survival in COVID-19 simpler but also elevate the overall standard of the restaurant. Conducting a SWOT analysis for restaurants can streamline operations and set your priorities straight. Having complete knowledge of the strengths, weaknesses, upcoming opportunities, and possible threats can help you make an informed decision as to where to pull up the socks.

The next article will guide you through eight simple steps to conduct an effective SWOT analysis for your restaurant. Read here.


Rating: 5.0/5. From 1 vote.
Please wait...
Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


Please enter your comment!
Please enter your name here