The coronavirus pandemic has been a major blow to the restaurant industry. Numerous eateries have been shut down and many are expected to close in the near future. The National Restaurant Association of India (NRAI) represents over five lakh restaurants in the country. We spoke to Anurag Katriar, the President of NRAI, to gain an insight into the impact of the pandemic on the restaurant industry as well as the revival of the restaurant space in a post-COVID environment.
1. Reports indicate one in four restaurants may never reopen again. NRAI represents over 5 lakh restaurants in all of India. Please clarify what has been the sentiment for the food & beverage industry?
Well, things are actually as bad as you hear. I don’t know whether one quarter of the restaurants will ever open up or not but the impact on restaurants in larger cities will be more than in smaller cities. The cost Dynamics are very different in larger cities so chances of closures are higher. I have been in the trade for almost three decades and nothing was ever seen even remotely close to this.
We are genuinely fighting a battle for our existence. I think in larger cities, 30% of the restaurants will never get back on their feet. The smaller cities may suffer a little less.
2.NRAI decided to shut down the restaurants even before the lockdown was announced. What is the current status of restaurants in across cities?
Few states like Delhi, Bengaluru & Kolkata have allowed opening up of restaurants but with a lot of restrictions. The restriction is in the operating hours because there is a national curfew at 9 pm which means the last order has to be taken by 7:30 pm, which essentially means there is no dinner service in India as we’re not used to a 7’o clock dinner. Then, we have restrictions on the number of people sitting in a restaurant. You cannot have more than 50% of your available seats. There are also restrictions on serving alcohol and on top of that, the consumer sentiment is not the best. So it has been a very dismal start.
We are not looking at more than 15-20% of our erstwhile revenues in the cities where we have opened up.
It is getting gloomy but I am sure there is some light at the end of the tunnel.
3. How much time do you envisage for the restaurant industry to get back on its feet?
It depends on a lot of unknown variables such as vaccines, an antidote, number of deaths and the fear of coronavirus. I personally feel that this current financial year is definitely gone. But I’m an eternal optimist and eating out will never go out of fashion.
4. Any help from the Government to support & sustain the restaurant industry in comparison to what’s happening internationally?
“Italy & UK have done a lot to support the restaurant industry but similar things have not come to us in India.”
I think the sheer size is very different with our population being 20 times more than the UK. As far as business performance is concerned, all these countries are also suffering. It is a global problem. We did get some liquidity support in the announcement that was made by The Honorable Finance Minister because now we are covered under MSME act so there is some liquidity coming. However, we did not find any mention in the address of the Finance Minister in those five days of the stimulus package.
“We had a one-on-one meeting with the Finance Minister and expressed our immediate concerns. There is some movement happening but nothing concrete has emerged as yet.”
So we are still sitting at home hoping something will happen someday.
5. Are the new guidelines commercially viable for restaurants?
As far as people distancing norms are concerned, I think we all have to take cognizance of that but at the same time, they can be done more intelligently. I understand a distance between two tables has to be at 6 feet but if it’s a booth style sitting, where you are not facing each other, why do you need that 6 feet? These are the advisories given by the Union Home Ministry but health is a state subject. So we have created our own handbook and we are coordinating with various state governments to come up with what I call more practical guidelines. Something that creates a sense of security in the consumers without creating that sense of fear and panic. We are very hopeful that they will understand. We are not against public safety but we think that need to mix it with a bit of practicality.
6. So what happens to bars & nightclubs as its impossible to maintain social distance there?
“Bars & nightclubs are going to suffer the most because the nature of the place is such.”
Unless we find an antidote, I think that sector will continue to suffer. So will be the banquet sector. There will be restrictions on the number of people in a party, social distancing etc. It won’t be very good to see people dancing with masks on. Businesses will pick up first with deliveries, then dine in food-centric restaurants and then other things they will take some time. People are still sceptical about stepping out. Most people want to be cautious. Build up to the business will happen. Problem is how do you survive financially during this period is very challenging.
7. Clearly, it is one of the biggest worries. The costs are the same but the revenue is zero.
“So that’s the big catch and this is where I feel everybody who’s part of the ecosystem whether it is a restaurant owner, its employees, guests, landlord, aggregators – everybody will have to come together with a common purpose of saving the sector. “
It is not about profiteering at the cost of each other but unless we combine our efforts you’ll not be able to save the sector. Secondly, everybody should understand that business in the post-pandemic era can never ever be conducted on the terms as pre-COVID era. If everyone comes together, I think we will all be able to save the 30-40 % closure that we are talking about may go down a bit.
8. How about home deliveries? Has that picked up?
Home delivery, at any level, can never replace dining and this has never ever that’s not going to happen. The delivery business is at about 30% of the pre-COVID era. So it’s not looking very rosy so to say.
9. Restaurant industry also employs over 73 lakh people and clearly their job seems to be in danger.
I feel that by the end of this pandemic we will probably see upwards of 40% of the people in the sector losing jobs. If the business volumes are low it will have a direct impact on the employment numbers.
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