Covid-19 scare hits restaurants in India
With people trying to stay away from crowded places, Indian restaurants have to work around a challenging time
There has been a significant dip of up to 15-25% in footfall based on location across our restaurants. Malls have been the worst hit," says Zorawar Kalra, founder of Massive Restaurants Pvt. Ltd, on the impact of Covid-19 on the restaurant business. His company owns multiple premium outlets like Farzi Café, Pa Pa Ya and Masala Library in Delhi, Mumbai and Bengaluru, as well as in global dining hubs like Dubai and London.
With the World Health Organization declaring the Covid-19 outbreak a pandemic, there is panic in the air. In India, more than 70 cases of Covid-19 have been reported and the numbers are growing steadily.
Anurag Katriar, president of the National Restaurant Association of India (Nrai), says: “Malls and corporate hubs are tailor-made business hubs for premium dining because they guarantee steady walk-ins. But most people are avoiding crowds as a preventive measure and offices have implemented work-from-home practices." Katriar is also the CEO of F&B company deGustibus Hospitality Pvt. Ltd, which owns Indigo Deli, Tote and Dakshin Rasoi.
In Bengaluru, where corporate dining forms a substantial chunk of business for restaurants and pubs located in office complexes and commercial hubs like Whitefield, the impact of the Covid-19 spread can be seen clearly. According to a spokesperson for brewpub Windmills Craftworks, which has two outlets in the city, in Whitefield and at the international airport, their revenue is down by 50-60%.
“Corporate spends amount to 50% of our revenue and now it is completely nil," says the spokesperson, who did not want to be named. The brewery has an outlet at The Quad, a snazzy food court at the Bengaluru airport, which has witnessed a 40% dip in revenue and customers. He says their labour and fixed costs are high and the slump is “getting very serious now".
Event cancellations have added to income woes. Katriar, who also runs a banqueting business, says wedding parties and corporate events have been cancelled at his venues—the cancelled events would have raked in ₹1 crore in the months of March and April. Even reservation numbers are dwindling. “In the first week of March, there were 200 (table reservation) cancellations by foreign delegates in a single night," says Kalra.
While bigger restaurant brands may tide over the slump, the real concern is for smaller outlets located in the food courts of malls and theatres. On Thursday, the Delhi government ordered all cinema halls to shut down till 31 March. Eateries like Royanna Military Canteen and Chicken Man, located in Bengaluru’s tech parks, have lost 50-60% revenue, according to their founder Amit Roy. The restaurateur and F&B consultant also runs the Watson’s chain of pubs in Bengaluru, Chennai and Goa. The restaurant industry is already experiencing a downswing due to the economic slowdown, says Roy, and this adds a new challenge. “Goods and services tax (GST) is also killing us right now," he adds. “Any sort of GST-related relief by the government will help."
Most businesses are trying to implement cost-cutting measures. There are discussions within the restaurant fraternity on the need to rationalize rents. “In such a scenario, landlords and restaurants owners need to work together. But, we have no immediate plans to reduce our workforce as a cost-cutting measure," says Kalra. However, some restaurant owners, who requested anonymity, say they might trim their teams.
It’s not just about people staying away from crowded places. Some customers are also keeping away from meat, or even Chinese cuisine. There’s a trending hashtag on Twitter called #NoMeat_NoCoronaVirus. A Mint article, published in the first week of March, reported a 15-20% drop in demand for non-vegetarian dishes at a Noida-based fast food outlet, even though there is no evidence of the virus spreading through cooked food.
“When news about the global epidemic kicked in about a month ago, there was a significant impact on restaurant orders as people shifted to vegetarian options, but now things are more balanced," says Kalra. He highlights a myth-busting statement released by the Food Safety and Standards Authority of India (FSSAI) in February which states, “Poultry has not been found to be involved in transmission of 2019-nCoV to humans so far in any report globally."
Online meat delivery brand Licious, which retails eggs, chicken, seafood, mutton and cold cuts, offers a different perspective. “We have earned our stripes with strict standards of hygiene and as consumers pay more attention to the source and handling of their food, organized players will continue to report favourable revenue numbers," says a Licious spokesperson.
In the first week of March, Nrai sent out precautionary guidelines issued by WHO to its 800-member outlets, which include mass chains like Domino’s and Chaayos and premium dining restaurants managed by Olive Hospitality Group and Massive Restaurants Pvt. Ltd. Some of these groups, such as Massive Restaurants, have introduced additional precautionary measures like infrared (IR) thermometers at their restaurants. They check the temperature of their guests as well as the staff. They rolled out an internal advisory in the first week of February and introduced hand sanitizers, surgical gloves and masks for all staff.
“Patrons have indicated that they are suspicious of Chinese food," adds Kalra. There have been reports of diners staying away from the Chinese food hub of Tangra in Chinatown in Kolkata as well. Last month, some restaurants from the city reported a 50-60% dip in customers. “There are about 40 Chinese restaurants in the area and they are largely running empty," says a Chinese-origin businessman from Kolkata who produces ready-made sauces for Chinese as well as Indian restaurants. His business had already taken a hit owing to the slowdown in the economy and Covid-19 has just added to the problem, says the business owner, who did not want to be named.
The good news is, stricter hygiene practices are already coming into play for the benefit of the overall food industry . “But the present scenario is not to be taken lightly and one has to find ways to work around it," says Roy.
FIRST PUBLISHED13.03.2020 | 11:24 AM IST