The coronavirus outbreak has undoubtedly struck a massive blow to the food services industry. While restaurants are already undergoing huge losses due to the significant fall in business, a statement made by the NRAI indicates closure of 50% of the restaurants in the country if lockdown is extended further, i.e. beyond April 14.
NRAI Fears Closure Of 50% Restaurants In The Country If Lockdown Continues
According to the National Restaurant Association of India (NRAI) President Anurag Katriar, if the lockdown extends till May, 50% of restaurants would shut nationwide due to lack of cash reserves.
“We are looking at 50% restaurants to shut down if this lasts till May. There are only 5-6 chains that have cash reserves to sustain more than a month,” he says.
While the NRAI is expecting its 5 lakh member-restaurants to lose up to ₹ 80,000 crore in 2020, it is trying its best to minimize the losses. In an open letter to the landlords in the food and beverage industry, it has urged them to forgo rents and the common area maintenance charges for over 100 days till end-June.
This letter comes at an extremely crucial time as restaurants are struggling to cover expenses. Nearly 90% of the restaurants in the country are operated on lease. Restaurants pay anywhere between 15-30% of their income towards rentals. A waiver will massively help restaurants endure the storm and stand on their feet.
While some large mall owners like Lulu Group, Lodha Group, Forum and Vegas have voluntarily waived off the rentals for an interim period, restaurants are expecting others to follow suit.
Also Read: Peacocks Spotted Strutting Around In Posh South Mumbai Colony
Food Delivery Business Falls; Job Losses May Occur
Meanwhile, the food delivery business has also shrunk to a negligible size due to the lockdown. Since most restaurants are temporarily closed, Zomato and Swiggy are reportedly doing just about 10% business compared to previous times.
The NRAI has also estimated job losses of 1.5 million people across the food services sector, which employs about 7.3 million people currently.
Also Read: Husband Creates Quarantine Restaurant At Home, Cooks 3-Course Meal For Wife For Date Night