Re-open eateries and bars in Maharashtra, say bodies, as Delhi blinks

60 per cent of the total restaurant market in India remains unorganised, while 40 per cent is organised
Restaurant bodies have urged the Maharashtra government to allow eateries and bars to re-open in the state, as Delhi prepares to usher in guests at its bars and pubs on Wednesday. Last week, the Maharashtra government had permitted hotels to reopen with full capacity, allowing restaurants within these properties to operate only for in-house guests.

The Hotel and Restaurant Association of Western India (HRAWI) said it was important to permit all eateries and bars to reopen in the state, since their survival rate had fallen sharply on account of the Covid-19 pandemic and lockdown.

"Restaurants are the backbone of the food services industry and kick-starting operations with dine-in services is the need of the hour in Maharashtra. Permitting sale of alcohol at restaurants like it has been allowed in Delhi, Haryana and Goa should also be considered," Gurbaxish Singh Kolhi, president, HRAWI, said.

A recent report by the National Restaurant Association of India (NRAI) had said that a third of eateries and bars had shut permanently between April and August in the country, due to the pandemic and lockdown.

Mumbai is a key consumption centre along with Delhi, constituting nearly 25 per cent of the food services market, according to industry experts. Metros such as Bengaluru, Hyderabad, Kolkata and Ahmedabad make up another 20 per cent, they said.

While most other states had allowed bars and restaurants to re-open in a graded manner, Maharashtra had bucked the trend, Anurag Katriar, president, NRAI said. "Understandably, the state government has been doing this in response to the Covid situation that prevails in Maharashtra. But when most other businesses have been permitted with strict guidelines and protocols in the state, it is high time the restaurant sector is also considered for re-opening," he said.

60 per cent of the total restaurant market in India remains unorganised, while 40 per cent is organised. Though store closures have been rampant in the unorganised market, since the pandemic and lockdown began in March, organised players are now shutting unprofitable outlets.

Last week, Jubilant FoodWorks, which runs Domino's stores in the country, said it was shutting over 100 dine-in restaurants, since they were not generating enough business. More organised players are expected to follow suit as restaurant owners strive to keep profitable stores going.

Some experts argue that delivery sales are compensating for the loss of dine-in business to some extent at large outlets, but Katriar says small and medium food service operators are not geared for this. Even large outlets, he says, are feeling the pressure, since dine-in remains a significant part of the traditional restaurant business. Industry estimates peg the share of dine-in sales at about 65-70 per cent and delivery sales at about 30-35 per cent of total sales for a restaurant.

"The point about delivery works well for the quick-service restaurants, but even they are keeping a close watch on their overheads. All players are reorienting themselves to make dine-in safe because getting back these consumers will be critical to the business," Katriar says.
Restaurant market size (India): Rs 4.25 trillion
Organised: 40 per cent
Unorganised: 60 per cent
Store closures between April-Aug 2020: 33%
Triggers: Covid-19/lockdown

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