The coronavirus pandemic has hit the food and beverage sector hard. From mall closures, falling revenues and footfalls, restaurants are struggling to maintain overheads and expenses.
Maharashtra government on Friday announced more restrictions and measures, shutting down all the non-essential services in the state including private offices.
While food businesses will remain open - footfall is expected to be poor as most people now prefer to place order from home. The announcement comes a day after Delhi government decided to close dine-in at restaurants in the national capital till March 31.
While eating at restaurants will be prohibited, take away of foods or delivery of food will continue. Karnataka government also announced that restaurants in Bengaluru will be allowed to keep kitchens open only for online deliveries and will not serve customers on premises. Pubs and bars have been shut since March 14 and extended till March 31.
Diminishing clientele means diminishing profits, which obviously make it unsustainable for many restaurants to stay open and maintain fixed costs, let alone continue to pay wages.
There is a sense of chaos and vulnerability among restaurant owners.
“We have 345 outlets out of which 120 outlets are shut. You can imagine the pain that we are going through. It’s like an epidemic on the economy. You have salaries to pay to employees, you can’t let them off. We as entrepreneurs want to create jobs so this puts a lot of burden on us,” says Sagar Daryani of Wow! Momo Foods.
For business to stay afloat, it looks all restaurants will have to switch to a ‘contactless delivery’ model.
Nitin Saluja, founder & CEO, Chaayos, says while the dine-in business has been impacted, the retail chain hasn’t’ seen a dip in our delivery business.
“We run 85 stores across 3 major metros, Delhi, Mumbai and Bengaluru. From those 85 stores, about 20 stores are in malls which are completely shut and 20 more shut for dine-ins. While this has had a major impact on us, our delivery business is unaffected.”
But not everyone in the business has the luxury to tweak their model and rely on delivery. Natasha Jain of Bent Chair, a niche restaurant where one can dine-in or even pick up home decor items and furniture brands, said given the rise in coronavirus cases, the team has decided to take some tough calls and voluntarily shut down outlets on March 13.
“We started to implement measures last week itself before there were any directives to shut down restaurants. We had a major sanitisation and disinfection protocol for our staff and thermal screening for our guests. We are implementing similar measures not only in our restaurant but our retail business as well.”
So, clearly these are trying times for smaller players who have to put together a plan B proactively.
One of Delhi’s favourite coffee and wine bars, Perch that debuted in Mumbai just last month had to shut down operations after the COVID19 outbreak.
“We were in the process of soft-opening our Mumbai outlet when we got the news of shutting down the place. As of now we are trying to start a new format which we have never explored before of delivery and takeaway model. We are working towards it and hopefully will come up with something,” says Vaibhav Singh of Perch Wine & Coffee Bar.
Having shut one-third of its business, Wow! Momo Foods is seeing a major drop in numbers.
“Walk-in to stores has come down and we have seen a major decline in revenues. We are headquartered in Kolkata, which is one of our least affected metros, still we are down by 30%-35% in Kolkata alone. In cities like Delhi and Mumbai business is down by 80-85%. One does feel vulnerable,” says Daryani.
With uncertainty surrounding the F&B sectors, businesses across the board will have to take some tough calls to reduce losses and cash burns. Wow! Momo Foods that employs more than 2,500 employees, says lay-offs is not an option and has reached out to its 345 landlords requesting for rental waivers.
Employees will be paid full salaries for the month of March and the top management will be taking salary cuts.
For now, restaurateurs don’t know how long this situation will last. But one thing is certain, it is going to get worse before it gets better. The F&B sector wants the government to step in during this trying time to ‘live today and fight tomorrow’.
