The bar and restaurant industry has been one of the worst affected amidst the coronavirus pandemic. Several operators have had to resort to layoffs in a bid to stay afloat. Some even had to shut down their businesses altogether. In the backdrop of rising COVID-19 cases, as people continue to stay away from bars and restaurants, the struggles of the industry are far from over.
From paying salaries, rent, and licence fees to other essential costs, restaurateurs and pub owners are in what many of them are calling ‘the fight of their lives’.
“Restaurants and pubs are dependent on their workforce largely. About 40-50 lakh people work in the restaurant industry in India, and not even 10 percent of them are working today,” Gowtham Paplikar, Managing Director of Bengaluru-based resto-pub chain Casa Piccosa told YourStory Founder and CEO Shradha Sharma during a recent conversation.
As restaurants and bars continue to remain empty, several migrant workers employed in the industry have made their way back to their homes.
Extending a helping hand
Gowtham, who runs two bars under the Casa Piccosa brand in Bengaluru, with a total of 125 employees, provided staff accommodation to nearly 80 percent of the workers during the lockdown. However, currently, only eight to 10 workers remain in Bengaluru; the others have moved back to their hometowns.
“We were able to give them shelter and food till about July, and were ready to continue providing till the time they wanted. During the lockdown, restaurant associations also helped and donated food supplies. However, as the situation started becoming uncertain, they all started leaving for their hometowns,” the restaurateur says.
The sales nosedive
Gowthaman says even before the nationwide lockdown was announced by Prime Minister Narendra Modi in March, most states had started to ask dine-in restaurants and bars to shut down, in the wake of the pandemic.
“A lot of international customers, including students, stopped coming. The scare also slowly started hitting corporates; this was a major contributor to our customer base. By March, we only had our regular set of customers,” he adds.
Now, even though lockdown restrictions have eased, bars and pubs have not seen any uptick, as their revenues are heavily reliant on the sale of alcoholic beverages, which is still not allowed in most states.
“Even after the lockdown was eased, liquor was not allowed to be served. This meant that pubs could not operate. Though some of pubs resumed operations by serving just food, it only worked for well-known brands,” Gowtham explains.
The overall size of the foodservice industry in India is pegged at around Rs 4.25 lakh crore, with the formal or organised sector accounting for Rs 1.75 lakh crore. It provides direct employment to 7.3 million people, and it is estimated that an equivalent number is engaged in ancillary activities.
“People outside the industry perceive that we have large margins, but in reality, we have very few margins. We work on a 15-20 percent margin as it is dependent on a large workforce. As it is a retail space, the rent rates are also high. During the pre-COVID-19 times, we couldn’t afford to close for even one day in a month, as it affected the topline directly. And today, we are forced to shut down,” Gowtham says.
The post-pandemic world
Speaking about the revival of India’s economy, Gowtham says, it will kickstart only when people start spending again. With job and salary cuts happening across industries, people have been naturally wary of spending. Every industry from now on will be living with COVID-19 safety protocols in place, he adds.
Gowtham, echoes what most experts have been saying - coronavirus is going to linger for some time, and the only way to deal with it is "to live with it". But, it’s not going to be easy to get most people back into restaurants and bars despite putting safety protocols in place.
“While safety measures, including temperature check and sanitising, will be in place, everything is up to people. It is ultimately their choice to decide and dine out,” he says.
The recovery for the sector is going to be a long road especially with restricted timings, Gowtham believes.
Watch the full interview here,
“We have already lost the time when maximum business happens. Dinner time is most important for us as we see more turnout of people at night. Earlier, pubs in Bengaluru used to be open till 1 am. During the partial lockdown, the government allowed only till 8 pm. It is, however, very unlikely to make it 1 am again, even after the pubs are opened fully,” he says.
Targets for businesses that operate in the sector will have to be drastically revised in the post-pandemic world, believes Gowtham.
“About 30 percent of what we were doing before would be a good target for us now. To achieve any kind of margin like that, we will have to negotiate with our landlords, renegotiate with the licensing, and operate with minimum staff,” Gowtham signs off.
(Inputs from Suman Singh)
(Edited by Ramarko Sengupta)
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