*Article* **Crisis Management in Restaurants: The Case of Polish Restaurants during the COVID-19 Pandemic**

**Marek Nowacki 1,\* and Marianna Nurkowska <sup>2</sup>**


**Abstract:** The article aims to identify effective actions taken by the catering industry as part of crisis management during the COVID-19 pandemic. The time scope of the research concerns the first wave of the COVID-19 pandemic in the period from 13 March to 18 May 2020. The research method used in the study was a questionnaire survey (CAWI). The survey results showed that the most frequent action taken by restaurants was applying for government assistance. On the other hand, most marketing activities were related to the assessment of the situation and the prospects for restaurants. Relationships were also found between restaurant management activities and restaurant characteristics (number of employees, number of years of operation and location). The developed research tool can help in assessing effective actions taken by restaurant managers during a crisis.

**Keywords:** crisis management; COVID-19 epidemic; catering industry; restaurants

**Citation:** Nowacki, M.; Nurkowska, M. Crisis Management in Restaurants: The Case of Polish Restaurants during the COVID-19 Pandemic. *Sustainability* **2022**, *14*, 14631. https://doi.org/10.3390/ su142114631

Academic Editors: Zygmunt Kruczek and Bartłomiej Walas

Received: 20 September 2022 Accepted: 1 November 2022 Published: 7 November 2022

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**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

#### **1. Introduction**

Crises have become an everyday reality in the modern world. The most important in the 21st century have been the attack of 11 September 2001 on the World Trade Center, the Bali attacks, the SARS epidemic in 2002–2004, the Arab Spring 2010–2012, the global financial crisis in 2007–2009, and even the influenza A/H1N1 pandemic in the years 2009– 2010, which caused the death of 284,000 people around the world [1]. One can claim that at any given moment, somewhere in the world, we are dealing with some crisis.

Such crises have a very strong impact on the world economy, especially on the hospitality and tourism sector. The COVID-19 pandemic and related restrictions had a very strong impact on the hospitality and restaurant industry, threatening to close many of them and cause millions of employees around the world to lose their jobs [2–5]. The global tourism economy lost \$1.3 trillion in revenue in 2020 as a result of the pandemic, and 100–120 million jobs in tourism [6] were at risk.

According to a GFK report, during the pandemic in Poland, the restaurant industry saw a huge decrease in sales and in the number of catering establishments [7]. Compared to 2019, in 2021 the market value dropped to PLN 28.5 billion, i.e., by over 22 per cent. Over these two years, the number of establishments shrunk, in turn, by almost 10,000, down to 63,000. In terms of the number of establishments, the pandemic returned the market to 2009 levels.

Many authors emphasize the importance of developing a survival strategy for the restaurant sector [8,9], which has been severely affected by the COVID-19 pandemic [10]. It is also very important to identify the factors governing the resilience of hospitality firms and restaurants in the face of the crisis [11–13], as well as a financial recovery strategy [14] and innovation in terms of food ordering and delivery platforms [15].

Previous studies on the impact of the pandemic on the functioning of restaurants have focused on the qualitative identification of crisis management procedures [16,17], the prospects for the use of artificial intelligence in future crises [18], quantitative identification

<sup>1</sup> Department of Finance and Banking, WSB University in Pozna ´n, 61-895 Pozna ´n, Poland

of actions in a crisis [19] or qualitative identification of factors influencing the survival of restaurants during a crisis [20,21]. Neise et al. [13] identified the factors governing the resilience of restaurants, which included economic and financial performance, tangible and intangible assets, short-term response, and experience of the manager. The short-term response activities included only delivery and takeaway services, the coronavirus relief program and short-term assistance.

The authors of this article did not find any articles in which other authors identified effective actions in the field of restaurant management in the face of a crisis, especially a pandemic. Therefore, it is extremely important to identify the factors and practices that will help entrepreneurs to survive periods of crisis. There are no quantitative tools for diagnosing effective management strategies for tourism enterprises (especially restaurants) in times of crisis. There are also no tools for the quantitative identification of effective actions undertaken during a crisis in the gastronomy industry.

Hence, the purpose of this article is to identify effective actions taken by the gastronomy industry as part of crisis management during the COVID-19 pandemic. The following research question was therefore posed: What restaurant activities are effective during a crisis caused by an epidemic?

#### **2. Literature Review**

#### *2.1. Restaurant Management in a Crisis*

As mentioned in the introduction, crises affecting restaurants can be of various types, as discussed by Tse et al. [16], who divided them into external factors (physical environment—e.g., natural disaster or technological failure, and human or social environment—e.g., confrontation or malevolence) and internal factors (e.g., management failure). Each of these types of crisis requires different restaurant crisis management. For restaurant management in the crisis during the SARS outbreak in Hong Kong, Tse et al. [16] proposed the following actions: cost reduction, revenue enhancement (change of marketing mix and decrease in perceived physical risk).

Various authors have compiled lists of actions that are desirable during a crisis. For example, Israeli and Reichel [22] created a list of practices for hotels in Israel, and Okumus and Karamustafa [23] in Turkey. Aviad A. Israeli [19] identified a list of crisis management practices for the restaurant industry, categorizing them into human resources, marketing, maintenance and government assistance. He stated that government support is important, and that improved competitiveness and cost-cutting activities are crucial. Israeli [19] writes that when identifying practices used in the crisis management of restaurants, two dimensions should be taken into account: the importance of the measures, and the usage of these measures. Therefore, when constructing a questionnaire to measure crisis management practices in the restaurant industry, he examined the importance of the usage of each practice separately. However, Israeli [18] contented himself with constructing a questionnaire, but did not investigate the effect of any of these practices on resilience or the state of restoration.

Several articles on restaurant management during the COVID-19 pandemic were recently published. The authors identify activities in the field of restaurant management during the pandemic. A. Motoc [24] analysed the role of a leader in crisis management and resilience for restaurants in Romania. The author stated that strong qualities of an attentive, communicative, flexible and motivating leader, a decentralized culture, commitment among employees, and a creative culture in a restaurant all go together to determine the degree of integration of crisis management and strategic planning. A. Gkoumas [25] identified seven factors for restaurant viability during the COVID-19 pandemic in Taiwan. Three of them, that is the cultural context, social cohesion and the cooperation of restaurant professionals, are essential to the effectiveness of any strategy for containing the coronavirus.

N. Messabia et al. [21] found that Canadian small- and medium-sized enterprises (SMEs) suffered during the pandemic from stress, shortage of employees, financial losses, liquidity problems, closures, reopening and difficulties with adapting to change. To overcome this crisis, entrepreneurs had to demonstrate resilience, innovation and strategic management. The support of Canadian federal programs helped them a great deal. Messabia et al. [21] proposed a six-element model of restaurant management in a crisis, which consists of entrepreneurial experience, federal government funding, sound financial management, innovation in diverse service offerings, the strategic management of human resources, and the support of family members.

A.M. Elshaer [26] examined the response of Egyptian restaurants to COVID-19. The author successfully documents the decisions and activities related to four aspects: leadership practices, managing stakeholders' cooperation, operational procedures and marketing reputation. Neise et al. [13] identified the factors important for resilience in German restaurants. They concluded that ex ante business problems and financing by loans or credit reduce the likelihood of owners perceiving their businesses as resilient, whereas delivery and takeaway services, ownership of property and the higher age of the owners increase the likelihood of enterprise resilience.

Restaurant adaptation strategies in Malaysia were studied by Lai et al. [27]. Three prominent areas of adaptations made by decision-makers were identified based on continuous news reports and media content. Commonly made adaptations involve actions to (i) nurture creativity, (ii) sustain reputation, and (iii) maintain profitability. In addition, F. Alkasbeh [18] reviewed the literature in the field of food advertising on social media in the context of the impact of COVID-19 on restaurant marketing and management practices. He identified two areas of such activities: artificial intelligence and digital media ads and the importance of social media ads during COVID-19.

Other studies analyzed the impact of the COVID-19 pandemic on the condition of restaurants [4], the early effects of the pandemic and accompanying stay-at-home orders on restaurant demand [28], and consumers' perceptions of risk about restaurant food and its packaging [29].

#### *2.2. The COVID-19 Pandemic in Restaurants in Poland*

The first cases of COVID-19 in Poland were observed in mid-March 2020. As the disease spread very quickly, on 12 March 2020, an epidemic was announced in Poland resulting in limitations on movement and the closure of most service industries. Numerous restrictions were imposed on citizens, including the obligation to wear masks when leaving the house, and hours for seniors in stores from 10.00 to 12.00 from Monday to Friday. This resulted in a limitation of movement and the closing of most service industries. Mass events, weddings and concerts were completely cancelled, and parks, green areas and even forests were closed.

In connection with the announcement of the epidemiological threat on 12 March 2020, from 13 March 2020 the activities of gastronomic establishments were banned. This decision remained in force until 18 May 2020. At that time, the gastronomy industry could only sell take-out dishes or delivery, without hosting customers [30].

From 18 May 2020, gastronomy establishments were re-opened for customers, but under some restrictions. A limit was in place for the number of people on the premises (1 person per 4 m<sup>2</sup> ) and the disinfection of tables after each client was introduced. It was compulsory to maintain a distance between the tables, a minimum of 2 m, and a distance of 1.5 m between guests sitting at separate tables. Waiters were ordered to serve customers in masks and gloves. Only families or people from one household could sit at one table. Otherwise, only individuals were allowed to sit at the tables [30].

In the second half of March 2020, 68% of companies and gastronomic establishments completely suspended their activity, while 32% were open and operated in a limited way [31]. For the establishments to survive the first shutdown of the economy, actions were introduced to limit financial losses. During the first lockdown period, restaurants had to limit their activities to take-out sales and providing dishes by delivery. In the spring of 2020, the largest intermediary companies in the supply of food offered by restaurants were Glovo, Uber Eats, Pyszne.pl, Głodny.pl and Wolt. During Easter, restaurants offered the possibility of ordering dishes and traditional sweets with home delivery or personal pickup in the form of catering [32].

Due to the prevailing COVID-19 pandemic and the deteriorating situation of Polish gastronomy at that time, many initiatives were created to support restaurants during their closure. The portal wspieramgastro.pl became popular, in which the following initiatives came to the help of restaurateurs: #safedoys—a campaign that aimed to promote a Code of Good Practice when transporting meals; #SmacznewSparta—an event organized by the HoReCA Employers Association, aimed at supporting gastronomic businesses; #wspieramzamzam—this is a nationwide campaign addressed to Polish restaurateurs and people who want to support their favourite places. To increase sales during the pandemic, restaurants began to promote dishes in jars. Chefs' sauces, soups, dishes and preserves were very popular, especially for people under quarantine [32].

#### **3. Method**

The research among restaurant managers was carried out using a survey questionnaire. The research was conducted from October 2020 to March 2021. Online questionnaires were sent to 123 randomly selected restaurants present on TripAdvisor. As a result, 51 completed questionnaires were obtained.

The questionnaire consisted of 20 statements regarding activities used by restaurants in crisis management during the first wave of the COVID-19 pandemic wave. The content of the questionnaire was developed based on the work of Aviad Israeli [19], with the statements divided into categories: human resources, marketing, maintenance and government assistance, which was modified and supplemented with additional items (Table 2). The statements were assessed on a five-level scale, from 1—"generally no" to 5—"very intensively". The respondents assessed the condition of the restaurant with three statements: "How do you assess the current situation of the restaurant compared to its functioning before the pandemic?" (1—"very bad" to 5—"very good"), "How do you assess the impact of the pandemic on the functioning of your restaurant?" (1—"very negative", 5—"very positive"), "How do you assess the prospects of the functioning of your restaurant in the next year?" (1—"very bad prospects", 5—"very good prospects") (Table 2).

The restaurants studied employed a varying number of staff: 11–15 employees (25.5%), 2 to 5 employees (11%), and one employee (19.6%) (Table 1). Most restaurants have been in operation for 11 to 35 years (31.4%), or from 3 to 5 years (29.4%). Most of the restaurants studied were located in the city centre (31.4%) and outside the city centre (23.5%). Only 5% of the restaurants were located out of the city.


**Table 1.** Research sample characteristics (N = 51).


**Table 1.** *Cont*.

Analysis of the relationship between the variables was performed using multiple regression analysis. The analysis of intergroup differences was performed using the nonparametric Kruskal-Wallis H test and the Mann-Whitney U test. All calculations were made with Statistica 13.0 software.

#### **4. Results**

In the first stage of the analysis, the ranking of actions taken by restaurants in the initial period of the COVID-19 pandemic was calculated. The restaurants most often applied for exemption from ZUS (Zakład Ubezpiecze ´n Społecznych—The Social Insurance Institution) contributions, for government funding for salaried employees, for advertising in the media, applied for micro-loans and applied for deferrals in the payment of municipal taxes (Table 2). The list shows that four of the five most frequently undertaken actions belonged to the "Government assistance" group. In turn, at the end of the ranking were activities such as replacing high-tenure employees, increased reliance on outsourced human resources, reducing menu prices, cost cutting by using less expensive substitutes, and price drops with special offers. These actions mainly belong to the human resources and marketing groups.

In addition, Table 2 presents the opinions of restaurant managers regarding the assessment of the condition and prospects for the operation of their restaurants during the pandemic and one year in the future. The managers assessed the current situation of the restaurant as slightly below average (M = 2.37), and the operating prospects for the following year as slightly above average (M = 2.76), with a standard deviation close to 1. This proves an average assessment of the restaurant's condition as neither positive nor negative in the first period of the pandemic. Only the impact of the pandemic on the condition of the restaurant was assessed as "quite negative" (M = 1.74; SD = 1.05).



#### **Table 2.** *Cont*.


Notes: \*—additional items proposed by the authors of this article.

In the next step, a regression analysis was performed where the dependent variable was the assessment of the state and prospects of the restaurants during the COVID-19 pandemic, and the independent variables were the actions taken by restaurants during the pandemic. Most relationships—as many as six—were found for the group of "Marketing" activities: "Joint marketing campaigns with other traders" has a positive relationship with both "Assessing the impact on restaurants" and "Evaluating the prospects of restaurants". "Reducing menu price" has a positive relationship with "Comparing the restaurant with before the pandemic" and "Adding a business menu" or "Changing the business menu offerings" has a positive relationship with "Evaluating the prospects of the restaurant" (Table 3). Interestingly, "Introducing new services" has a negative relationship with "Assessing the impact on restaurants" and "Evaluating the prospects of restaurants". This may result from the fact that such activities were taken by restaurants that were very strongly affected by the pandemic, who negatively perceived the prospects of functioning during the pandemic. This perception of the economic reality influenced the intensification of activities in the development of new services, especially catering and delivery of dishes to customers.

In the next group-Human resources-three relationships were found. "Replacing hightenure employees with new employees" is related to "Comparing the restaurant before the pandemic" and "Evaluating the prospects of restaurants". This is a negative relationship, which means that restaurants perceiving the pandemic impact strongly and evaluating the prospects very negatively reduced high-tenure staff by replacing them with new employees.

In the next group of activities, Maintenance, two inverse relationships were found between "Cost cutting by using less expensive substitutes", "Comparing before the pandemic" and "Evaluating the prospects of restaurants". In the last group of measures—Government assistance—one relationship was found between "Applying for a micro-loan" and "Assessing the impact on restaurants". This means that restaurants which saw the strong impact of the pandemic sought government support in the form of a micro-loan.



Note: significant relationships between the variables are highlighted in bold.

An analysis of the differences between the actions and perception of the impact of the pandemic and the features of the restaurant revealed only three significant differences (Table 4). First of all, statistically significant differences were found in "Reducing the number of working days per week", depending on the number of restaurant employees. A detailed analysis showed that restaurants with 6 to 10 and 11 to 15 employees reduced the number of employees significantly less than others. The largest restaurants (from 16 to 34 employees) reduced the number of employees the most.

**Table 4.** The diversity of actions and perception of the impact of the pandemic depending on the features of the restaurant (Kruskal-Wallis H test).


Notes: significant differences between groups are highlighted in bold.

Another difference was in "Adding a business menu" or "Changing the business menu offerings" depending on the location of the restaurant. Here, the most active in this action were restaurants located outside the centre, and the least active restaurants were located outside the city. The last difference was in "How do you assess the impact of the pandemic on the functioning of your restaurant?" depending on the number of restaurant employees. Here, the impact of the pandemic was most perceived by one-person restaurants and least by the biggest restaurants.

#### **5. Discussion**

In this study, an attempt has been made to answer the question: What restaurant activities are effective during a crisis caused by an epidemic? For this purpose, the activities undertaken by Polish restaurants during the COVID-19 pandemic were examined. Of all the activities taken, the most common was requesting government assistance. These are completely different activities than, for example, in Israel during periods of peace or periods of terrorist crisis (dominated by layoffs and cost-cutting) [19], or the SARS epidemic in Hong Kong, where mainly cost reduction and revenue management were used. This indicates the widespread availability of government support during the COVID-19 pandemic in Poland, while such support was not as strong during the other crises described by the abovementioned authors. However, a study from Taiwan [25] showed that cultural context, social cohesion and the cooperation of restaurant professionals are essential to the effectiveness of any strategy for containing the coronavirus. Taiwanese culture, combined with the social cohesion between various groups, was a key factor in ensuring public security and business sustainability. Unfortunately, in Poland, society is much less disciplined and the way the crisis was managed by the PiS (Prawo i Sprawiedliwo´s´c—Law and Justice Party) government led to one of the highest numbers of deaths per capita in the world [33].

To identify effective activities in the field of restaurant management during the pandemic, a regression analysis was performed. Despite the greatest activity of restaurants being in the field of government assistance, the regression analysis showed that it is the marketing activities that are most closely related to the outlook for survival in the pandemic period. The wide range of these activities includes lowering prices, joint marketing campaigns with other restaurants, and introducing new services. Interestingly, unlike the activities described by F. Alkasasbeh [18] including food advertising on social media and artificial intelligence and digital media ads during COVID-19, the above research did not confirm the relationship of advertising activity on social media with the restaurants' future prospects, although these were in third place in terms of popularity. Perhaps this is due to the limited time frame of the research, and because the effects of such marketing activities may not yet have been noticed by restaurant managers.

In the available literature on the subject, there is no data on the relationship between the size of the restaurant, the length of its operation and its resilience during the pandemic. The results of our study indicate that there are, however, a few relationships. Restaurants with 6 to 15 employees were the most resistant to employment reduction. The limited number of available tables in the restaurant was irrelevant. Large restaurants also proved to be the most resilient to the impact of the pandemic, as they had greater opportunities for marketing, maintenance and human resources management.

There were no differences in activities or in the assessment of the impact on the condition of the restaurant depending on the number of years of operation of the restaurant, as was also found by Headd [34], Parsa et al. [35] and Neise et al. [13]. This proves that it is not the number of years of operation that is important, but rather the state of the restaurant in the years preceding the pandemic, and, as stated by Neise et al. [13], the age of the manager also has a significant relationship to the resilience of the restaurant during the crisis.

Finally, restaurants located outside the city are in a much worse position than those in cities, as they have severely limited options for marketing activities. Other factors contributing to the resilience of restaurants, in addition to those identified by Neise et al. [13], are ownership of property and the higher age of the owners.

#### **6. Conclusions**

#### *Summary*

The COVID-19 pandemic has had a very strong impact on the tourism industry, especially on the gastronomy sector both in Poland and around the world. In the above article, we tried to identify the actions taken by Polish restaurants during the pandemic to assess their effectiveness. The most frequently undertaken activities by managers of Polish restaurants were those from the group applying for government support, as well as from the maintenance and marketing group. However, it is not the activities in the field of government assistance but rather those in marketing that are significantly related to the condition and prospects for the survival of restaurants during the pandemic. In addition, differentiation in activities depending on the size and location of restaurants was found: restaurants with an average number of employees (i.e., 6 to 15) lay off workers to a lesser extent, while the smallest restaurants felt the impact of the pandemic on business the most.

The developed questionnaire for assessing restaurant activities during the pandemic and the method of assessing the effectiveness of these activities may be used in other fields of the tourist industry and other fields of the national economy. As a result of the research, clear procedures of activities for restaurants to undertake should be created and recommended for during a crisis (not only a pandemic), as well as activities for local governments and the national government. The chaos that prevailed in this area during the pandemic in Poland caused the collapse of many restaurants and other tourist enterprises, and caused a huge increase in the number of infections and deaths.

#### **7. Limitations and Future Research**

This article provides insights into how selected Polish restaurants dealt with the first wave of the COVID-19 pandemic. However, this article has some limitations. This survey was carried out on a very small group of restaurants, which was caused by the reluctance of managers to participate in the survey. Further research should consider a significantly larger research sample.

Our research was carried out on a relatively small research sample, and the actual state of restaurants and their ability to survive during the pandemic were not verified. The study was limited to examining the subjective opinions of restaurant managers about this condition. Therefore, in further research, it would be necessary to include a larger group sample and correlate the collected data (i.e., actions taken by restaurants) with the actual state of the restaurant from a different time perspective.

Moreover, the dependent variable used was the subjective assessment of the current economic situation of the restaurant and its prospects made by managers. To increase the accuracy and reliability of the measurement, indicators of the restaurant's actual financial situation and business performance should be taken into account.

The above research focused on assessing a snapshot perception of the condition of restaurants. In subsequent studies, longitudinal studies should be carried out, i.e., it should be verified how the restaurants studied survived the crisis, and whether and in what economic condition they are functioning after the crisis. In addition, further research should take into account other variables that were not used in this study. These include manager characteristics (experience and age), restaurant characteristics (economic and financial performance before the crisis, ownership, financing, etc.) [13], as well as features of the business environment (restaurant operating conditions).

**Author Contributions:** Conceptualization, M.N. (Marek Nowacki) and M.N. (Marianna Nurkowska); methodology, M.N. (Marek Nowacki) and M.N. (Marianna Nurkowska); software, M.N. (Marek Nowacki); validation, M.N. (Marek Nowacki); formal analysis, M.N. (Marek Nowacki); investigation, M.N. (Marek Nowacki); writing—original draft preparation, M.N. (Marek Nowacki) and M.N. (Marianna Nurkowska); writing—review and editing, M.N. (Marek Nowacki). All authors have read and agreed to the published version of the manuscript.

**Funding:** This research received no external funding.

**Institutional Review Board Statement:** Not applicable.

**Informed Consent Statement:** Not applicable.

**Conflicts of Interest:** The authors declare no conflict of interest.

#### **References**

