For Restaurants, Second Lockdown Will Be the Straw That Breaks the Camel's Back

Restaurateurs are staring at another tough year as state governments are announcing a new set of lockdown restrictions to control the spread of the second wave of COVID-19 outbreak

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The second wave of the COVID-19 pandemic is dealing a lethal blow to the already financially fragile restaurant industry. Restaurateurs are staring at another tough year as state governments are announcing a new set of lockdown restrictions to control the spread of the second wave of COVID-19 outbreak, which has surpassed the first wave in recording the highest single-day spikes.


"Restaurants in Maharashtra and Delhi were already operating at 50 per cent occupancy within the curfew timings, shutting down restaurants completely for a month is going to be the straw that breaks the camel's back," said Ankit Mehrotra, CEO and co-founder, Dineout, a restaurant reservation platform.

Restaurants and pubs in Maharashtra are shut down for dine-in till April 30. Delhi has allowed them to operate at 50 per cent capacity outside of the curfew timing of 10 PM to 5 AM. Bengaluru and Ahmedabad have a night curfew till April 20 and April 30, respectively.

The restaurant industry was crippled by the first lockdown last year. "The restaurant industry has been on ventilator since the lockdown was imposed last year," said Anubhav Dubey, co-founder, Chai Sutta Bar India. "Not much improved after the lockdown was lifted as despite some momentum in sales and overcoming the expenses that were borne during the lockdown, not much profits have been made by the industry overall," he said.

At a rough estimate, 30 per cent restaurants have down their shutters permanently, as per data separately released by Dineout and Hotel and Restaurants Association of Western India (HRAWI).

The financial blow did not spare even some of the large restaurant chains in the country.

"We shut down two restaurants owing to the stress arising out of the lockdown," says A.D. Singh, founder and MD, Olive group of restaurants, which operates SodaBottleOpenerWala and Monkey Bar.

The second wave and ensuing lockdown will only exacerbate the situation.

"While some restaurants were closed during the first lockdown, most others are trying to get back on their feet and stave off closure. This new spread of the virus and the ensuing set of restrictions will be a death blow to many of these. The longer it lasts the more restaurants will never reopen again," said Singh.

Pradeep Shetty, senior vice-president, HRAWI, concurred and said with new curbs another 30 per cent restaurants could go out of business and force several out of work. "Consequences of this (lockdown restrictions) will be to start cutting down employees," he added.

Night Curfew No Better Than Full Lockdown

State governments impose night curfew, a popular subject of memes and jokes on the Internet, to curb non-essential movement while ensuring businesses do not suffer. However, for an industry whose maximum business comes after sundown, night curfews are no better than full lockdowns, Mehrortra said.

"Our data suggests that 70 per cent of the total reservations are done for dinners and the remaining for lunch outings. The average dinner time for Indians is 9 PM, which in summers typically gets stretched till late. With these ongoing night curfews, we see a significant drop in dinner reservations that account for the majority of our revenue," he said.

Delhi recorded approximately 40 per cent decline in daily business in just three days since the night curfew was announced.

Shetty said the lunch business is struggling as it is because most big corporates have adopted work from home and with the night curfew, dinner business will also take a hit.

"In any case, the lunch business was about 20 per cent of the entire business and dinner is about 80 per cent. Dinner business starts after 8 PM, and hotels are being shut at that time. So, it completely becomes unviable to keep your business open (sic)."

Singh suggested curfew time should be pushed to late night hours. "The worry is that as the night wears on, people may get drunk and end up close to each other without masks. For this, why cripple the whole restaurant industry? Instead consider a curfew timing of 11-11:30 PM so that customers can still frequent establishments until a certain time, which would be a life saver for the industry, while also clamping down on crowded late night scenes."