The Brihanmumbai Municipal Corporation (BMC) may have eased rules for dining-in services at restaurants, but restrictions on hours of operation and the number of people allowed at a time have incensed restaurateurs. Indeed, speaking to Moneycontrol, several stakeholders felt the strict conditions would sound the death knell of the industry.
“The new rules are disappointing, devoid of any logic and are too little, too late,” said Anurag Katiyar, President, National Restaurant Association of India (NRAI).
Mumbai’s civic body notified its new rules late on Monday evening, after the Maharashtra Government had announced a set of overall in its lockdown guidelines for the State. The government rolled out new guidelines for several districts with a low rate of Covid-19 infections. However, disaster management authorities in Mumbai, Mumbai Suburban region and Thane were asked to formulate their own norms.
While the rules by the Maharashtra Government allow restaurants to be open only on weekdays till 4 PM, the BMC guidelines allow a further relaxation for weekends, till 4 PM, with 50 percent capacity. This is a relief from the earlier norms, which allowed only deliveries and takeaways in the metro city.
Heartburn for restaurant owners
Questioning the move by the government and civic body, Katiyar pointed out that shops had been allowed to remain open till 10 PM and wondered why restaurants couldn't be given the same leeway.
According to the new rules, retail shops can remain open on all days of the week, till 10 PM, while shopping malls have to remain closed.
“In the 497 days since the onset of the pandemic, restaurants in Maharashtra have been closed for about 52 percent of the time and the rest of the days we have operated at 30-50 percent capacity only,” said Katiyar.
“We consider ourselves partners with the government in this fight against the Covid-19 pandemic but there has to be a spirit of partnership. Right now, these decisions are made without any consultation with the industry,” said Katiyar.
According to the NRAI, the market size of the organised food service sector in Greater Mumbai (which includes Mumbai, Kalyan-Dombivli, Mira-Bhayandar, Thane, Vasai-Virar and Navi Mumbai) was estimated to be Rs 32,785 crore in 2018-19. The association pegs the number of organised and unorganised restaurants in the region at 87,650.
'Hardly any relaxation'
Restaurant owners, too, expressed shock and dismay on the announcement by the government.
“Restaurants are on the brink of annihilation and the insensitivity shown by the government will destroy the backbone of the industry,” said Riyaaz Amlani, CEO and MD, Impresario Handmade Restaurants, which runs cafe chains such as Smoke House Deli and Social.
According to Amlani, the restricted operating capacity of up to 50 percent and limited hours of operation will not help the industry at all. “This is hardly a relaxation,” he said.
Anjan Chatterjee, Chairman and Managing Director, Speciality Restaurants, concurred. “We operate across the country and have been allowed to open across India; however, the logic of this government is confounding,” he said. Chatterjee’s Speciality Restaurants houses brands such as Mainland China and Oh! Calcutta. The company derives about 40 percent of its revenue from Maharashtra.
The new rules, said Chatterjee, will leave the industry reeling, given the fact that the government has not offered any relaxation on the licence fee.
According to a recent report by Care Ratings, the overall market size of the food services industry is expected to have declined by 40-50 percent due to the global outbreak of Covid-19 and subsequent imposition of restrictions in the country.
Quick service restaurants (QSRs) such as Domino’s Pizza and Burger King, however, have witnessed a quick recovery with the easing of restrictions as the second wave of the pandemic ebbed. The recovery was mostly on the back of their greater reliance on the delivery and takeaway model.
A survey by the Restaurant Association of India showed a recovery of almost 90 percent for QSRs from the pre-Covid period, with sales having declined only 10 percent in June. Sales in this segment had declined 70 percent in May, according to the survey.
While reporting its first-quarter results, Jubilant FoodWorks, which operates QSR chains such as Domino’s Pizza and Dunkin Donuts, said it had recorded a 94 percent recovery in the first quarter of financial year 2022 compared to the pre-pandemic period in Q1 of FY20.
According to Care Ratings, the food services industry comprises restaurants in hotels, independent as well as fine dining and casual dining restaurants, quick-service restaurants, pubs, bars, lounges, roadside eateries, dhabas and cafes. The industry registered a CAGR of 7 percent and grew from Rs 3 lakh crore in FY15 to Rs 4.2 lakh crore in FY20, say market sources. According to Care Ratings, even with the ease in restrictions from May-June, consumer demand for dine-in services may not recover till the second half of FY22.