Restaurateur Navneet Kalra has no doubt that the present Covid-19 induced phase is the toughest the industry has every faced. Kalra, who owns Town Hall and Khan Chacha in Khan Market, has seen just 15-20% sales at these outlets in the last two days. He also disclosed that Coffee Bean and Tea Leaves and Harry’s Bar, who were his tenants, Sidewok and three others have closed or are about to. Without the support of landlords and state government, many restaurants, he said, would down shutters in Khan Market.
Varun Tuli of Yum Yum Cha, however, expects things to normalise if the right message is given and the panic of customers addressed. His own landlord has been supportive and enabled him to reopen and offer both dine-in and delivery services. Resumption of his outlets in the malls, though, will depend on deals with mall operators and consumer confidence.
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“We have disposable cutlery and crockery, staff wearing face shield and contactless ordering through phone,” he said. The hygiene precautions taken by most restaurants, he argued, would make them safer than grocery stores, where hundreds touching the items on the shelves in an air-conditioned setting. “Just as confidence in food delivery has bounced back due to sustained messaging, restaurants will similarly reopen,” Tuli asserted optimistically.
In Khan Market, however, at present the restaurant owners aren’t so hopeful. A market representative revealed that a European eatery, a café-cum-bar and a burger and barbeque joint, besides three retail outlets, including a beauty salon, have already informed their landlords that they would be closing. Smoke House Deli, another marquee eatery, is also closing, with owner Riyaaz Amlani saying the current outlook did not encourage a reopening of the restaurant.
Kalra said waiving the rent for the lockdown period and reducing rents for the remaining months, relaxing the operating hours and permitting use of the terraces could inject some confidence. This week is a test case for many. With disappointing returns on the first two days of resumption of business, the coming weekend will be the indication of customer confidence and help shape decisions on whether to run an outlet or switch to takeaway and home delivery.
Rajneesh Malik, who started Sidewok in 2006, decided to shut down the outlet in Khan Market. While an emotional decision for him, he said he felt it made no business to run the establishment following unsatisfactory meetings with the landlords and observing the market sentiment. Malik explained that home delivery and takeaway accounted for only 10% of his sales. He couldn’t rely on these to return 90% of revenues with dining-in expected to contribute only 10% due to the fixed closing time of 9pm.
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Umang Tewari of Big Fish Ventures concurred with Malik and thought consolidation could be the way out. Tewari, who has 10 outlets across Delhi, said he would rather focus on reopening his food outlets and close four of his high-energy bars to trim losses. With clientele depleted, he reasoned, “Reopening means a sizeable investment per outlet. If any customer tested positive, it would close the outlet for 14 days again. With this uncertainty, it makes no sense to invest in reopening.”
A restaurant consultant foresaw a similar scenario in Connaught Place, Hauz Khas Village and Rajouri Garden, where 20% of the outlets have closed down and many others have not applied for renewal of their licences.
This unforeseen, though temporary situation, can only be overcome with cooperation between stakeholders, explained Shriram Monga of SRED Advisory, a food and beverage and retail advisory firm, who is part of many renegotiations between restaurateurs and landlords. He pointed out that the mindset right now was to save the company rather than a single outlet, and if the landlords did not sign new rent deals, the tenants could just vacate the premises and move on.
With the landlords and tenants deadlocked, and the city authorities not ready to support the industry, Monga feels dining out will no longer be a hallmark of the city. Restaurants that shut down will think multiple times before investing in the business again, resulting in a loss for everyone, including for the state government in terms of tax revenues.