A month after the Corona lockdown ended in Austria, high quality restaurants are booked out, while low-and middle-ground restaurants remain empty.
From a user posting at Der Standard:
There are long queues in front of Josefs Brot shop, no reservations can be made at Steirereck, or at Fillipou. … Next to it are empty restaurants, which until now have relied on cheap prices and passing trade. You don’t need that, you can cook better at home.
(Josefs Brot, Steirereck and Fillipou are top-end gastronomic offerings in Vienna.)
The lockdowns and restrictions imposed by governments due to the Covid-19 pandemic resulted in many being furloughed or losing jobs. Consequently, it is expected that discretionary spending would decrease. In particular, businesses depending on day to day consumer traffic (restaurants, brick and mortar retail) or on gatherings of people (theatres, sports events) have been a marked disadvantage. However, spending at high quality restaurants is back to or above pre-Covid levels. Why is that?
There is a new perception, and it affects both discretionary and casual spending. Restaurant offerings which mainly relied on location to attract passing trade but did not offer distinctive value – such as premium ingredients, culinary creativity and skill – find out that they have, in current times with less passing trade, little to attract customers. For offerings with distinctive value, on the other hand, it is worth going to, even if prices are high.
A similar phenomenon appears in the luxury sector. Pre-Covid luxury often relied entirely on brand value. Many established luxury brands offered products without special materials or craftsmanship, yet have been able to justify high prices solely through brand recognition. These established luxury brands grew especially in the aspirational sector, sought out by middle-class consumers who seek to demonstrate status through commonly understood brand symbols such as Louis Vuitton or Prada.
After Corona, consumer perception and behaviour is changing. The commonly understood semantic brand value becomes less important than actual quality. When more people in society are economically struggling, the practice of flaunting a luxury item in public – the main reason why large-brand luxury items are bought in the first place – quickly becomes dubious. Just witness the social media backlash over Instagram influencers who continued to flaunt their branded luxury goods during Corona.
“You can’t just continue as usual. You can’t flaunt your wealth and your privilege at a time when things are really tough for lots of people. It’s alienating and it’s embarrassing.”
Camille Charriere, London-based influencer
In the post-Covid economic environment, main consumption motivators have changed. Flaunting a brand as a signal of privilege is socially less acceptable. The actual quality of an offering becomes more important in terms of material, craftsmanship and creativity. The last decade was about the rise of branded mass luxury driven by aspirational consumers eager on social signaling. After Corona, the focus has shifted. Actual quality is back, also with high prices, while the value of brands mainly driven by social signaling has decreased.