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Restaurants across the country are staring at a long winter ahead. New Covid-19-induced restrictions have thrown a spanner in the recovery that was underway after the second wave.
Most restaurants have also stalled expansion plans due to the uncertainty surrounding the pandemic, and are seeking relief to offset the shrunken business. If the current set of restrictions on the number of hours and capacity continues, many restaurant owners fear they will have to take tough calls like letting go of people.
Restaurants in metros were already operating at half the capacity in line with the government guidelines. The additional guidelines — like the ones announced by the Delhi government on Monday and the one that mandates restaurants to down their shutters by 10 pm – are adding to their woes, said restaurant owners. They feel like the government’s “whipping horse”, with the industry having to bear continuous losses for almost three years now.
Ashish Ahuja, director of Pebble Street Café at New Delhi’s New Friend’s Colony, said, “We follow all norms and protocol, but have to face the axe. Takeaway and delivery are still a small drop in the ocean and not sustainable for our business.”
The pandemic has not been easy on Ahuja, who had to shut down an outlet of the cafe in Connaught Place, or CP, during the first wave. “We had scaled down since we lost the outlet in CP. Hopefully, we will not lose staff now. We operate on a lean model. But there is a limit to the amount of losses we can bear.”
With the national capital reporting close to 20,000 Covid cases for the past few days, the Delhi Disaster Management Authority ordered dine-in at all restaurants and bars to shut down from Tuesday, allowing only takeaway and delivery.
Calling the order arbitrary, Riyaaz Amlani, CEO and MD of Impresario Handmade Restaurants, which owns brands like Social and Mocha, said, “We are just submitting to those who have the power to take these decisions, but we wish we had been given some explanation for how this will help. It doesn’t seem like an effective measure, but just an optic measure.”
Close to 25 per cent of food business operators shut down permanently and nearly 2.4 million jobs lost after the first two waves of the pandemic. India’s food market size shrank to Rs 2 trillion in FY21 from Rs 4.23 trillion in FY20, according to the National Restaurant Association of India report.
The association said the industry would be “permanently debilitated” if urgent relief measures were not forthcoming.
“There is fear psychosis created by the government and the media. Instead of asking people to exercise caution and not worry, there’s a long list of don’ts. As a result, people are not venturing out. All restaurants are deserted. The occupancy is down to 15 per cent from as high as 80 per cent,” said Gurbaxish Singh Kohli, vice president, Federation of Hotel and Restaurant Association of India (FHRAI).
According to Kohli, home delivery can’t be an alternative and it can only help one survive. It’s less than 10 per cent of the total business, he said.
Others, too, have seen their business shrink. Anjan Chatterjee, chairman and managing director of Kolkata-headquartered Speciality Restaurants, said business had bounced back after the second wave -- in fact, it did better than what it was in the pre-Covid phase due to the festive season.
It was all good till the first week of December after which news of Omicron started flitting in and out. “And business started coming down by the day, by the hour, ending up way below our projections,” Chatterjee said.
Since then, business has been down by about 60 per cent. Speciality operates brands like Oh! Calcutta, Mainland China, and Sigree. “From survival, we came to revival mode which has nosedived. So, all plans in the short- and mid-term, including capex, are deferred till things come back (to normal),” Chatterjee added.
Nitin Kothari, owner of iconic restaurants Peter Cat and Mocambo in Kolkata, said the footfall was down by almost a fourth. “It was alright till January 2, but after that it has been sliding,” he said.
Restaurant owners in Gujarat, Bengaluru, and Chennai are no better off. The mandated 50 per cent capacity, weekend curfew, and restricted hours are hurting them. Some have already started taking harsh measures to survive the crisis.
According to Narendra Somani, president of the Gujarat chapter of Hotels and Restaurants Association (HRA), business is already down to merely 40 per cent of the normal since the beginning of the month. “As cases began to rise, restaurants are now coping with the impact by reducing staff by 10-20 per cent on a temporary basis.”
“All of us are bleeding,” said K Syama Raju, president, Southern India Hotels and Restaurant Association, adding that the association, like last time, was seeking a waiver of property tax.
Even as business has shrunk, restaurant owners are faced with a daunting challenge of meeting the overheads, including people costs that account for a bulk of the total operating expenses. Last time, when restaurants were shut during the first wave, most of the staff had gone back home. “This time, restaurants are loaded with full staff strength, and advancing leave is encouraged. We will ensure that the leave is used and some of it can be with pay. It will be a combination because all we have is our brands and people. We need to protect both,” said Chatterjee. So, advancing and taking leave is being encouraged.
Highlighting the financial stress on owners, who also paid high licence fees in Delhi, Payal Verma, director, Blue Door Café in Delhi’s Khan Market, said, “The new excise policy was so liberated which was welcome, but now restaurants are shut and have to pay a higher fees.”
According to Verma, the government should consider the whole picture and issue a “360 degree order,” as there is property tax involved at various levels and landlords are unable to give concessions. Measures like a further reduced occupancy, say 33 per cent, are still welcome because they at least would keep a place running, she noted.
