How soon can the food services sector get back on its feet after lockdown?

The restaurant industry is one of the hardest hit by coronavirus and the lockdown in the country. That's because social distancing as a concept is completely opposite to what eating out stands for. Visiting a restaurant means enjoying a sense of culture and community, the very aspects of life that have been snatched from us since the lockdown began in India. Even though home-deliveries are allowed, restaurants remain shut for the dine-in experience. As a result, the industry is gasping for breath

Pictures by: Rajwant Rawat

The restaurant industry employs around 7.3 million people in the country, easily making the largest part of the services sector. When lockdown began on March 24, all economic activity wound up. But many restaurants had already started seeing lessening footfalls. The sector had been reeling under problems of its own even before the pandemic struck. The current GST regime added to the cost of running a restaurant. Currently, the industry is looking at losses of around Rs 1 lakh crore during the lockdown.

Restaurants have never had it easy even before the pandemic. Real estate costs are high and now the current crisis has only worsened the situation for them. It is estimated that post lockdown 4 out of 10 restaurants might close down for good. Consumers will be unwilling to pay considering that spending power will shrink.

Bengaluru-based Swiggy is laying off 1100 employees. Zomato has decided to cut strength by 13 per cent. The National Restaurant Association of India has warned that even 10-20% job losses among its 7.3 million employees in restaurants across the country would mean up to 15 lakh unemployed.

Most of the food business has now shrunk to home delivery services but is that enough to keep the industry afloat? There has been a 70 per cent fall in food delivery business itself. Cloud Kitchens like Eat Fit are already looking for buyers. Experts believe food delivery business will take at least a year to get back to pre-lockdown levels, if not longer.

Restaurateurs have understood that the need of the hour is to innovate and be flexible about their offerings. Many restaurant brands have transformed into food delivery models. Bigger brands like Impresario's Smoke House Deli have introduced DIY meal kits. Ready-to-cook options are becoming popular during these times. Some fast food chains have also resorted to delivering groceries in a bid to survive during the lockdown.

The future of dining

Even as businesses in India are opening up, restaurants remain shut to the despair of owners who will take a long time in regaining confidence of customers. Human interaction remains at the centre of the restaurant business and taking it out of the equation spells a death knell for the industry. Hygiene and contactless deliveries are already in place. Restaurants will need to incorporate innovative ways of social distancing in the dine-in culture.