Dine-in business stages a comeback but a third of eateries may have shut permanently | Economic Times

New Delhi: The dine-in business, which drives the bulk of revenue for the restaurant industry, is turning around dramatically, according to industry executives, overcoming Covid restrictions and air pollution. Some peg business at as much as 70% of pre-Covid levels. However, about a third of restaurants and bars across the country may have shut permanently because of the pandemic. “Consumption revival is now at 70%. We are seeing month-on-month recoveries since the unlock started beginning September, with curfew guidelines across the country being eased and air pollution, which had peaked after Diwali, continuing to reduce,” said Rahul Singh, founder of The Beer Cafe, which has a footprint of over 30 outlets across Delhi NCR (National Capital Region), Mumbai and Bengaluru. Singh said the only setback has been Punjab as farm protests have seen gains made in the past three months slipping away.The ₹4.25 lakh crore restaurant sector, among the worst hit in the pandemic, banked on delivery-only models, pre-bought meal plans and tie-ups with food and beverage companies to push sales since the nationwide lockdown was imposed at the end of March. Along with curbs being eased in phases, such as increased opening hours and serving of alcohol, improved consumer confidence has been fuelling the revival, executives said.“The September quarter has been very good for us, driven by dine-ins. While business post the unlock is still to reach fully pre-Covid levels because of operating guidelines, people have started eating out at restaurant brands they trust on hygiene and safety parameters,” said Speciality Restaurants chairman Anjan Chatterjee. “With news of vaccine activation gaining ground, we hope things would be better in the quarters to come.” 79713318Speciality Restaurants operates brands such as Mainland China, Oh! Calcutta and Sigree.While industry estimates say 30% of restaurants and bars have shut permanently, unable to withstand the five-month-long cash burn on account of the widespread shutdowns, brands that have implemented stringent hygiene standards and digital menus are leading the revival.“Markets like Delhi NCR have picked up with very healthy numbers in recent weeks,” said Saurabh Khanijo, managing director of Asian cuisine chain Kylin. “We expect the momentum to continue, with positive news of the vaccine.”Leading dining out markets such as Mumbai, which reopened in October after six months of closure, are averaging high dine-in sales despite restrictions.“Dine-in has come back quite well despite restrictions. We exited the month of September at 70% of pre-Covid sales and expect the trend to continue, driven by focus convenience and digitisation, which has helped a great deal in regaining consumer confidence,” Amit Jatia, vice chairman of Westlife Development, which operates McDonald’s in the south and west, said in an interview to ET last month. McDonald’s is the second-largest organised fast food chain in the country.While curbs on seating capacities remain, pent-up demand, especially on weekends and the upcoming holiday season, is expected to spur demand further, executives said. On the operations side, many restaurants and retailers that had reached a deadlock on waiver of rentals and switching to variable revenue-sharing models have been able to resolve their disputes.Even as it looks to a vaccine rollout that will lead to a bounce back, the industry is continuing to push for a stimulus package from the government to recover from pandemic-induced losses. It’s also seeking a rollback of the GST-linked input tax credit which has dented profits by 20-30%, according to executives.“Pent-up demand is starting to drive back numbers for hospitality overall, but we need stimulus and restructuring from the government urgently,” said Pradeep Shetty, senior vice president, Federation of Hotel and Restaurant Association of India (FHRAI), which has sought a hospitality sector-specific, loan-restructuring plan from the Maharashtra government.