The future of restaurants in the post COVID-19 era

The novel coronavirus has dealt a decisive blow to the restaurant business, be it in the current times or in the future to come. Much as we welcome and look forward to the opening up of the restaurant business, we are aware of the many challenges that lie ahead at various levels and must admit that we are apprehensive for once and truly dread the way forward.

Over the last three months, the business was restricted to only parcel service or take away.

This module had its many limitations and at best was sustainable to a very limited spectrum of outlets that either had a typical fast food or on the go food menu.

As we move now into this next phase, where the restaurant business will now be allowed to open for dine-in as well, one must factor in the social distancing directives as stipulated by the Government and the impact of this pandemic on the sentiment and socio-economic fabric of our country and impact on the running of our business.

Social distancing norms of gaps between tables and between diners on the same tables will result in cutting down the seating capacity of a restaurant by approx 70%. This would mean that an outlet which was initially perhaps a 100 pax would come down to 40 pax or maybe even 30 pax.

Needless to say, the fixed costs of the business will now have to be recovered from a much smaller bandwidth of bills and that will reflect in higher pricing.

The fact that restaurants will also initially be operational till 9 pm takes a major evening meal out of consideration as a revenue contributor and will make the above-mentioned equation even worse.

Not to mention the constantly mounting expenses of rent, electricity charges, water charges, taxes etc have not reduced leading to denting deep holes in our already very dry pockets.

Our industry is specialised labour dependent and intensive. It takes years to fine-tune cooking skills and maintaining taste requires us to keep attrition of labour to low levels as possible. With the prevailing fear psychosis and in the present scenario with migrant labour and skilled workers having returned to their hometowns, it is going to be a challenge to find new people and train them up to match the standards established over years.

Another factor that will weigh heavily is the mindset of our customers. This is an unprecedented situation worldwide and we are moving out of a lockdown situation clearly out of consideration of the economic costs and not because we have the pandemic under control.

There is no sense of euphoria in moving out of the lockdown and that is reflective in all the businesses that have been opened up so far where the sales are between 10 to 25% of what used to be their regular sales. How can we expect things to be any different in our line of trade?

Risks involved are huge and the restaurant business seeing light is going to be far from reality for a minimum period of six months at least. We expect 50 to 60% restaurants to shut shop even before they restart.

The cost of operating the business with 30% seating capacity and without a reduced infrastructure cost is going to make this business completely unviable and not sustainable.

The fear built due to the pandemic will surely witness reduced footfalls and increase in losses, are going to continue to mount.

(The writer is CMD, Maiyas Restaurants Pvt.Ltd)