As expected, the decision to close the restaurant due to the Covid-19 scare comes as a major setback for the restaurant. This misfortune is compounded because looking in the past, many restaurants have had to close their shop and cannot afford to close their shutters now.
The recent order by the Delhi government to shut down dine-in restaurants has started hurting the owners.
A Moneycontrol report quoted Kabir Chugh, who runs a chain of five restaurants under the Nizam’s brand name and one called The Turkey Project. “We cannot lay off employees and we have to continue to pay them their salaries without any business. There will be a sharp drop in profits,” he said.
It is reported that organized restaurants in Delhi cater to 3,00,000 people and generate annual revenue of over Rs 31,100 crore.
National Restaurant Association of India (NRAI) trustee Anurag Katiyar said that the period from November to February is the peak season for the hospitality sector, which has been affected again. “It will have a big impact on businesses. December alone accounts for 15-20 per cent of the annual revenue,” he told the publication, adding that last year unlock saw the industry reach 75-80 per cent of pre-pandemic levels.
Garish Oberoi, former president of Federation of Hotel and Restaurant Associations of India, said: “Other compliances like rent and license fee, salary are all over the place. But because of this shutdown, no one is sure how long it is going to last. Restaurants are staring at a bleak future, he said, adding that restaurants were grappling with staff shortages after workers went back home following past waves of the pandemic and the resulting lockdown when they were ordered to turn off dine-in customers. If given, they were able to overcome the crisis.”
Katiyar said a shocking 25 percent of restaurants have already closed permanently. “It was unexpected. Employees were brought back, people had invested in new things. You invested money and now the restaurant has to be closed.”
Dine-in vs. Delivery
To be sure, the government is allowing home delivery and take away food from restaurants, but this is only a small part of the total business.
“Many restaurants started looking at delivery during the pandemic. For most restaurants and bars, the delivery business is 15-20 per cent,” Oberoi said.
Even Katiyar said that takeaway and delivery cannot replace business from dine-in customers.
“We have 25-30 per cent business coming from delivery, but that is not enough for me to sustain. For most restaurants, delivery will help make up for losses, but it won’t help it be profitable. Experience-based restaurants such as cocktail bars are in a challenging position. The bar which is dine-in oriented (run by Chug) we saw a 70-80 per cent drop in sales in one day (when Delhi announced the closure of the restaurant). These bars are in upmarket areas and the rents are exorbitant. How many home bar kits can you sell,” said Chugh.
NRAI President Kabir Suri said in a statement that Delhi had the maximum frequency of meals six times per month, while the national average was 4.5 times per month.
He said the restaurant industry is concerned about the fate of over 300,000 people employed in Delhi’s restaurants.
Delhi NCR is the restaurant capital of India with the largest number of restaurants in the country. The revenue per year from organized restaurants in Delhi is Rs 31,132 crore,” Suri said.
NRAI has requested the Delhi government to either allow restaurants to operate in normal hours with safety measures and protocols or compensate the industry, its employees, suppliers and landlords for business losses due to the closure .
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