For restaurants to survive, the government would have to ease restrictions with a sense of pragmatism and practicality to ensure that the desired objectives of economic revival are met, says Ashish Ahuja
As the lockdown is now being lifted layer by layer, it appears to be a staggered re-opening of the country. The government is making an attempt to walk the fine line between ‘saving lives’ and ‘saving livelihoods’. The recent MHA order, allowing restaurants to reopen, is a step in that direction — one that brings hope as well as monumental challenges for the restaurant industry.
MHA guidelines specific to re-opening of restaurants are as follows:
Seating capacity to be reduced to 50 per cent
Purpose: To facilitate social distancing within the premises.
Even at 100 per cent capacity, most restaurants struggled to eke out a meager profit. Add to this, the substantial losses during the period of complete lockdown. With capacity reduced to 50 per cent, losses would mount. No restaurant would be able to afford rents, staff costs and other fixed expenses required to operate at a 50 per cent capacity.
Impact: It would be difficult for most operators to survive with the restriction in place. The longer this restriction lasts, the faster would restaurants disappear.
Alternate solution: Allow restaurants to operate for longer hours, thereby staggering guests over time and hence, achieving the purpose of social distancing as a factor of time rather than as a factor of only space.
Hours of operation to be curtailed
Purpose: Not yet clear.
The concept of curfew from 9 pm to 5 am requires a re-look. Majority of restaurant sales happen between 8 pm to 12 midnight. Hence, re-opening with these time restrictions would serve no purpose as the revenue-generating hours would be eclipsed by the curfew.
Impact: While restaurants would open during the day, the dinner seating would be inconsequential since last orders would have to be taken by 7 pm to ensure diners as well as staff reach back home without violating the 9 pm curfew deadline.
Alternate solution: Consider the option of doing away with the curfew entirely, as the logic behind imposing the same is anyway unclear.
Bar operations not allowed
Purpose: Not yet clear.
There are enough restaurants that do not serve liquor. For these operators, this restriction is immaterial. However, for liquor licensed-restaurants, alcohol sales account for as high as 50 per cent of total sales, sometimes even higher. Furthermore, the purpose of this restriction contradicts the re-opening of liquor vends across the country. If liquor can be sold at vends (where long queues were witnessed), then it would be fair to assume that the same liquor can be sold and enjoyed safely in the confines of a licensed premises that follows all norms.
Impact: With the bucket of liquor sales empty, sustainability for bars would now have to rely entirely on food sales, which is going to be a tough shot. For a customer who enjoys his/her tipple, the experience would be compromised. As a result, it’ll impact the very basis of re-opening, which is to kick-start the economic activity.
Alternate solution: Allow sale of liquor in licensed premises that have social distancing norms in place.
Use of digital / one-time use menus and online modes of payment
Purpose: To minimize touch-based infection spread.
Restaurants would have to re-engineer their ordering and payments softwares to incorporate the same. There would be certain added costs to building the digital infrastructure, but it’s something well worth the money spent.
Impact: Use of technology in this fashion would foster a sense of security for consumers, thereby building trust and convenience. The entire experiential flow while dining out would change for the better with judicious use of technology.
Alternate solution: None, since the guideline is bang-on and logical.
Safety and hygiene
Purpose: To minimize contagion.
Temperature checks, hand sanitisation, periodic disinfection of high touch surfaces, wearing of masks, kitchen supply disinfection, social distancing, protection for people over 60 and under 10 years of age are some of the guidelines that would have to be adhered by all. These are welcome steps and essential in providing a safe and secure environment for things to return to any semblance of normalcy.
Impact: These measures would help reduce the fear psychosis among people in general, and help bring confidence back for businesses to rebuild. Therefore, it’s very essential to kick-start the economy. Costs of operating a business would increase and operators would have to factor the same while pricing their services and products. The age of discounts would cede ground to a philosophy where customers would be willing to pay a premium for safety.
Alternate solution: - None, since protection and safety are non-negotiable.
For restaurants to weather this storm and revive, the government would have to ease restrictions with a sense of pragmatism and practicality to ensure that the desired objectives of economic revival are met.
In a nutshell, the move to kick-start the economy, opening restaurants is a much-awaited and welcome step. However, some of the above restrictions placed on operability and sustainability of the restaurant sector is something that needs a quick, logical and decisive re-look before it becomes too late. While restaurants have suffered mammoth losses during the lockdown that can never be recovered, the glimmer of hope at re-opening also seems shrouded under dark clouds, as explained above.
A lot has changed since that historic address to the nation on March 24. The sunk cost of the lockdown, the anticipated operational losses during the re- opening phase coupled with poor consumer confidence would debilitate restaurant balance sheets and possibly push many to extinction.
It is only logical to assume that there would never be a perfect time and strategy to re-open. A start needs to be made somewhere, and therein lays the silver lining. Hopefully, the dark clouds would clear sooner than later, and the sun would shine in all its glory on the sector.
Till then, most restaurants would probably serve your favourite cappuccino with a smile, the one that hides more than it reveals.
(The author is the director of Pebble Street.)