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Restaurants in crisis

  • Published at 01:12 pm June 23rd, 2020
D2_June 23, 2020_Restaurants in crisis
Photo: Artem Beliakin

With the ongoing crisis bracing for an economic fallout, restaurants brace for the worst. This is the first in a multipart series about the food and beverages industry

For the past 20 years or so, long before the start-up boom brought in young money and a youth dining scene, outlets like Time Out were a godsend for cash-strapped students looking for inexpensive casual dining options to hang out with their friends. Time Out managed to hold on to this appeal even when younger, trendier options hit the market, by the strength of a simple, classic menu of feel good eats. And then 2020 happened.

“At the start of 2020, we had been looking forward to moving to our new premises, and rolling out an updated menu” says Sangita Ahmed, Managing Partner at Time Out, adding that the strain of continuing to pay partial rent and full salaries to their entire staff despite the drastic loss in sales has been hitting the business hard. “Our pre-Covid 19 sales were five times what they are now” she laments.

Fear of contagion, and the need to maintain social distancing has led to a sharp decline in the culture of dining out for the present, and the dining establishments are feeling the heat. With rising cases, and no concrete word on a viable vaccine for the novel coronavirus, even the switch to e-commerce, which was the first logical step undertaken by almost every restaurant with the capacity to do so, is no longer cutting it. 

Pulling on the purse strings

As the global pandemic drags past its third month, the strain of the enforced closures and economic inactivity is beginning to show in all sectors, and the restaurants are not exempt from the situation. The lack of a concrete answer as to how long this situation will last casts a dark shadow.

Ashfaq Rahman Asif, restauranteur of Tarka, 138E and Tehari Ave fame, worries about the scenario in the long run. “15% of our salaries come from sales, and they’ve already dropped by as much as 80%” he informs us. “There are about half a million people employed in the restaurant sector across the country, and some 2.5 million dependants. Currently, we’re working with 5% of our staff to minimize contamination risks, but we have to pay everyone in our employ. If we continue to incur losses, at some point, cutbacks and layoffs will have to happen. I imagine it’s true for every industry right now, and for every loss of income, that’s a potential decrease in our customer base. You can see how that is a terrifying scenario for us. If something doesn’t change, we’re looking at the end of at least 60% of the current restaurant businesses in the country.”

Adaptation and roadblocks

As the lockdown debates continue and consumers are settling into the indoor life, these restaurants are scrambling to adapt. Sangita Ahmed assures us that Time Out is taking all the recommended precautions including providing appropriate protective gear for the staff, complete and thorough sanitization of their premises and tools. “We have our staff on rotation, and at any given time there is a maximum of 7 staff members living in the premises undergoing regular temperature checks. Dine-in services are suspended, and the delivery men are not allowed inside the premises.” At present, the restaurant is relying solely on e-commerce to survive.

Tehari Avenue was already a delivery-based business, so other than a drop in sales, the adaptation process was probably the fastest for the three of Ashfaq Rahman Asif’s businesses. “We have always practiced HACCP (Hazard Analysis Critical Control Point, an FDA mandated systematic approach to the identification, evaluation, and control of food safety hazards, so that was easy for us to adapt. We introduced masks and temperature checks and have started providing safety instructions for customers with our delivery packages. We did a training course with a leading hospital and trained our staff on Covid-19 protocol.” He added that the operational costs alone assure that dine-in services are not a viable option anyway, although 138E recently introduced drive-thru takeaway services. “We’re observing the market right now; it’s too early to tell what the future of dining will look like” he says.

As the situation continues to develop, the restaurants are hoping for support not just from the banks, but also in the form of clemency from landlords, and the continued patronage of their loyal customers.