Dine-in restaurants in Delhi worried by fresh covid curbs
PremiumWhile dine-in restaurants are panicking, firms focused on home deliveries are likely to see a good run
NEW DELHI : Delhi has shut down dine-in services in restaurants, with the Omicron variant of coronavirus spreading rapidly in the region. The Delhi Disaster Management Authority (DDMA) has, however, decided not to impose a lockdown.
“In view of the increase in positive cases, it was decided to close the restaurants and bars and to allow ‘takeaway’ facility only. It was also decided to allow operation of only one weekly market per day per zone," Delhi’s lieutenant governor Anil Baijal announced in a tweet on Monday evening.
Last Friday, restaurants in Delhi were allowed to provide dine-in services till 9 pm, only on weekdays. DDMA imposed a weekend curfew in the city and shut malls and restaurants on Saturdays and Sundays.
Restaurant operators fear that after Delhi, other states may also consider further curbs on dining in. The suspension of dine-in services after one quarter of good business will lead to major loss of business in the fourth quarter, they said.
“The Omicron variant is not dangerous, but the reality is that the number of cases is soaring. The government has to take steps, but they should find a fine balance so that the most vulnerable industries, such as food and beverages, are allowed to survive. Deliveries, regardless of the type of format restaurants operate in, do not make up for more than 30-40% of the total turnover," said Anjan Chatterjee, hotelier and founder of publicly-traded Speciality Restaurants, which runs chains such as Oh! Calcutta and Mainland China.
Restaurateurs said they have already been complying with various rules imposed and are seeing a reduction of up to 50% in dine-in revenues because of seating restrictions. Restaurants have also had to comply with business hour restrictions with daily night and weekend curfews that started at the end of December around the time of New Year festivities.
Such announcements are leading to a working capital crisis as rents have to be paid regardless of the disruption, said Ajit Shah, co-founder at White Panda Hospitality. “The policies are not conducive to continuing business. Political rallies are still going on and the local governments have to realize that we also generate a lot of revenue. They need to support us, too," he said.
Zorawar Kalra, founder at Massive Restaurants, which runs chains such as Farzi Café and Masala Library and delivery-chain Louis Burger, said he is hopeful that if hospitalizations and morbidities do not increase, these restrictions can be quickly removed as they are extremely debilitating for the already beleaguered industry. “If they continue, they will result in a major increase in permanent closures and unemployment in the sector," he said.
Dine-in restaurants are panicking, but for companies whose primary focus has been home deliveries, it is likely to be a good run. A spurt in the delivery business is expected, said Mansher Duggal, co-founder of Delhi-based Enoki Hospitality, which runs 10 cloud kitchens for Asian and North Indian cuisines. His business, he said, saw about 40% growth in the last lockdown in April-May 2021. However, restaurants should be allowed to continue operations with 50% capacity with strict regulations allowing only fully vaccinated guests, similar to the norms followed in the US and the UK, Duggal said. More restrictions on restaurants will send an industry that is still recovering into complete disarray, he said.
The size of the restaurant industry shrank by more than 50% from ₹4,23,624 crore in FY20 to about ₹2,00,762 crore in FY21, the National Restaurant Association of India (NRAI) said.
The association said Delhi NCR is the ‘restaurant capital’ of India with the highest number of restaurants in the country. There are about 95,187 eateries in Delhi including both organized and unorganized players. Out of this, 32,777 are organized (with FSSAI number and GST).
"While unorganized will also take the brunt of these new guidelines, the real brunt will come from the organized segment as they have a complete chain/employees, government taxes, suppliers etc. to deal with," said the association's president Kabir Suri. Organized players in the city generate a revenue of ₹31,132 crores since the dine-out frequency in Delhi is the highest as compared to the national average. Delhi eats out about six times a month as compared to the national average of 4.5 times a month. Suri said takeaway and delivery is just a meagre of this entire pie.
"We are also very worried about the fate of the over 3 lakh people employed in Delhi restaurants. We don’t want them to suffer but unfortunately, we don’t have adequate resources to support them for long," he added.
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