Restaurants have already suffered mammoth losses during the lockdown and restarting requires a sizeable investment. So could this mean the restaurateurs would have to think multiple times before investing in the business again? Ayushi Sharma speaks to experts to find out
Only if we could turn back the clock, we’d make sure the light defeated the dark. Isn’t it? But reality is often disappointing and at times, stranger than fiction. The global health crisis brought on by the COVID-19 pandemic is still raging and even though the government has allowed restaurants to reopen, hospitality is one sector, which seems to be on hold. Largely, because it loses out to major growth drivers and is dependent on a benchmark called people’s confidence. The Government, which is trying hard to walk the fine line between saving people and protecting the economy, did allow restaurants and malls to reopen. However, the closure of many cafes — Smokeys BBQ and Grill, Side Wok, Cafe Turtle and Smoke House Deli — in Khan Market and other hotspots of Delhi turn out to be a way different story than what was interpreted.
Who is to be blamed? Increasing anxiety and fear among people due to the virus outbreak? Certainly, yes! But restaurateurs are buried under the cost of reopening, what with new hygiene protocols in place and no fund buffer or expected demand to rely on. They are, therefore, unable to pay expensive rentals, salaries of so many employees and of course, other maintenance costs.
The owners say that the decision was taken after a careful review and a few rounds of negotiations with the Khan Market Traders’ Association and the National Restaurants Association of India (NRAI). It surely would not have been a simple decision to take but the point is fair to make — where will the money come from for investment? Paying rents, ensuring safety of the employees and customers, that too in an upscale market, is certainly not an easy task.
Riyaaz Amlani, CEO and MD, Impresario Handmade Restaurants, tells us, “In light of the COVID-19 pandemic and its subsequent fallout, we’ve made the difficult decision to close Smoke House Deli’s outpost in Khan Market, New Delhi. While we have been in constant negotiations with our landlords there and have also spent time assessing the outpost’s overall financial viability, ultimately a difficult but necessary decision was made keeping in mind Khan Market’s expensive real estate and other issues. That said, we hope to have your continued patronage at our other Smoke House Deli outposts in the city as soon as we’re allowed to open.”
With the new guidelines specific to reopening of restaurants such as a reduced seating capacity up to 50 per cent, curtailed hours of operation and a ban on serving alcohol, operating a restaurant is no longer a viable option. “Restaurants have already suffered mammoth losses during the lockdown that can never be recovered. The glimmer of hope at reopening also seems shrouded under dark clouds. For eateries to survive, the government would have to ease restrictions with a sense of pragmatism and practicality for ensuring that the desired objectives of economic revival are met,” feels Ashish Ahuja, director of the Pebble Street.
By its very nature, cafe business thrives on people dining in and a drop in the numbers means that the proposition becomes untenable. Experts believe that the situation is very uncertain at the moment. Without the support of landlords and government, of course, many more restaurants would end up being extinct in the near future, like the ones mentioned above.
Zorawar Kalra, founder and managing director of Massive Restaurants, shares, “For locations like Khan Market, which have traditionally had very high rental prices, support from landlords is very important. The rentals of Khan compete with that of some places in Manhattan and London. I have a restaurant in London and the per sqft rates in Khan Market and London are the same, however, the sales potential is nowhere near. Restarting will need a sizeable investment as the waiters and chefs need to be paid, maintenance has to be looked at since a lot of damage must have been caused in these three months of lockdown. Unless the landlords help immediately by bringing their rents down considerably, because the sales are going to be a fraction of what they used to be, a lot of the restaurants will not be able to open up in the area.”
Even before the ‘Unlock 1.0’ was in place, there was a spike in online delivery, which earlier was almost a negligible part of the services these cafes offered. Even if they ramp up that counter, it is not enough to meet establishment costs. Only footfalls can give them the required momentum. Restarting means a sizeable investment per outlet as everything that had been out of use over the last three months has to be repaired and reformatted.
So could this mean the restaurateurs would have to think multiple times before investing in the business again? The big chains can survive, the boutique ones won’t.
