Restaurants running at a loss because of restrictions in Delhi

New Delhi: Empty chairs in several eateries in Delhi are indicative of the fact that most of the city restaurants are operating at a loss. The weekend restrictions have put a huge strain on these restaurants and pubs and have had a cascading effect on their revenue. In order to stay in business, the majority of the restaurant owners had to lay off their employees and/or cut the wages of their staff. That has left many employees sitting idle at home, only hoping for things to get better.
According to a statement released by the National Restaurant Association of India (NRAI), “There are about 95,187 eateries, both organised and unorganised, in Delhi. Out of this, 32,777 are organised restaurants (with FSSAI number and GST). While the unorganised ones will also take the brunt of these new guidelines, the real brunt will be borne by the organised segment as they have a complete chain/employees, suppliers, taxes, etc and the revenue generated per year from this segment in Delhi is Rs 31,132 crore.”
“Also, dine-out frequency in Delhi is maximum, 6 times per month compared to the national average of 4.5 whereas takeaway/delivery is meagre. All of this is going to be in standstill once again!” the statement explained, further adding, “Over 25% of the restaurants were shut last year and more than 24 lakh people lost their jobs nationally. These new guidelines are going to be even further detrimental for the industry.”
NRAI president Kabir Suri, the cofounder and director of Azure Hospitality, told this correspondent, “In India, almost 30% of restaurants have closed down and 2 million people have lost their jobs. This third wave will only exacerbate the agony. If the lockdown and curfew are extended, another 10% of restaurants will close down, resulting in loss of another half-million jobs. There is a significant loss in terms of revenue, cash flow and so on. We are seeking government assistance since it has provided us with very little.”
With the support of their partners, the NRAI was able to provide rations and basic supplies to some of the employees. Furthermore, mental helpline numbers, as well as efforts to find jobs for those who had been laid off, were also initiated.
On the positive side, the number of online deliveries has increased by four to five times. Some restaurant owners have stated that while they have not experienced a significant loss in customers, their profit margins have remained poor throughout the year. Some others have hired staff on a temporary basis to keep the business going. They contact the employees directly as and when required whereas some others have stopped hiring staff on contractual terms.
“Although the quantity of online deliveries has increased, we have been operating at a loss due to lack of customers. Our sales have decreased by 30% to 40%. Many employees are laid off. Our service teams wanted to go home because there were no customers. There are no direct sales due to a 50% reduction in seating capacity. As you can see, we only do takeaways and home deliveries. Thus, we’ve suffered huge losses,” said the owner of Homefood Company in Lajpat Nagar.
Similarly, the owner of the Bikanervala Family Restaurant in Lajpat Nagar said, “Most of the staff have been sitting at home, there hasn’t been any profit. The number of orders has increased slightly through online marketing. But the profit margins on online delivery aren’t great. Due to the lack of customers, the business has dipped to 20%-25%.”
To avoid layoffs, the owner has figured out a means to keep a certain number of employees in the workplace each week. Explaining his strategy, he further added, “We have staff from several States. Now we have 30-35 staff but call only 10 of them on a day. Each staff member has a particular schedule in a week. We have to deduct their salaries but we didn’t lay off any staff.”
Most of the employees at different restaurants said that their salaries have been deducted to half. “Our manager has stated that only if the orders continue to come in, then only we can pay you; otherwise, we can just provide you with basic facilities to survive. You can either work or leave,” said an employee, who works at 7 States restaurant in Connaught Place.
“Earlier, we had a lot of staff. Now, we two are only working here. We do have online deliveries but it would not have helped us much either,” he further added.