Updated: April 18, 2021 9:28:15 am
Written by Thomas Fenn
Here we go on the scary-go-round.
The year 2020 was a blur for most of us in the restaurant industry. So much so that there is a running inside joke that like the fabled table number 13 (a lot of restaurants skip 13 when numbering their tables, for good luck), 2020 does not exist. As much as we would like to believe this, 2020 happened and it was heartbreaking and backbreaking for pretty much all of us: a mix of adrenaline and sheer white-faced terror.
The sudden announcement of the nationwide lockdown in March 2020 had us scrambling to make sense of all the madness. We launched our quest to procure the golden tickets for the right to conduct our businesses (e-passes in common parlance) and massive measures to protect our employees. Cash flows came to a halt while supplies became hard to come by. Uncomfortable conversations were initiated to mitigate the issue of rent. A lot of restaurants were unable to weather this and went belly up in silence while a privileged few somehow managed to keep their ships steady and pulled through. Even in these grim circumstances, the industry that had already been dealt a body blow, came together in a heartening show of strength and purposeful intent to bolster relief efforts. Restaurants leveraged their kitchens and thin supplies to produce food for the thousands of labourers stranded in cities, caught in the crossfire of Covid-19, struggling to go home.
Recently, when the Maharashtra government announced its stringent controls on restaurant operations, the familiar taste of metal in the mouth was back. With the sharp resurgence of Covid-19 cases, other state governments, including Delhi, followed suit, progressively pulling the plug on an industry that was already on life support. The hospitality business, despite being one of the largest employers of labour (second only to agriculture) and a significant contributor to the country’s GDP, has traditionally been viewed as one of the vices. It is criminally over regulated as a result, with some states requiring as many as 20 clearances to sell a sandwich. Yet, the restaurant industry still remains mindbogglingly the only one not allowed to claim tax credits under the new GST regime, undermining the tax regime’s stated objective of bringing more into the organised fold.
The pattern has continued in view of the pandemic — the Covid-19-specific policies do not reflect the incredible level of safety protocol compliance that restaurants and delivery kitchens were already ensuring. Rather than enforcing compliance of these protocols and consulting relevant stakeholders, the latest policies have been painted with a wide brush of selective prohibition suggesting that history is probably not the best tutor after all. This gross misunderstanding of the ground realities and lack of representation is exactly why the NRAI (National Restaurant Association of India) has been pushing for a separate ministry to govern the food and beverage industry for many years now; the economic stakes and consequences to our country’s stability are that high. This isn’t an entirely fresh or unique idea either. During peak pandemic, almost all developed nations introduced aggressive stimulus packages for their respective restaurant industries, recognising the implicit need to support an ecosystem that feeds millions of families. In India sadly, we are completely on our own and have received none so far.
Small businesses have been particularly battered. There is only so much that a strong force of will coupled with a ‘positive attitude’ can achieve when saddled with the reality of rising debt, high rents, staff and compliance costs without deep pockets. We simply do not have the means or leverage to negotiate better terms (albeit temporary) with our landlords. Perceived as bad bets, lines of credit have shrivelled up for sustainable, independent enterprise while the funding pours into giant cash haemorrhaging companies like Zomato and Swiggy. Almost all of our time is spent studying the intricacies of the ever-changing policies and its impact on our livelihoods with zero control over our own destinies. We are already converging, thus, to the point of massive closures with no end in sight.
With a classic let-them-eat-cake attitude, home delivery has been declared the messiah of the food business. Except, dine-in and delivery business models are wildly different; one simply cannot be a rational substitute for another and the time has come for us to acknowledge this. Not to mention that the relationship between restaurants and aggregators such as Zomato and Swiggy (which cumulatively control 90% of the organised delivery market) are fraught with distrust due to their anti-competitive policies, predatory discounts and high commissions. In no universe can this be perceived as a fair fight, which a study commissioned by the Competition Commission of India in August 2019 all but confirmed.
There were green shoots of recovery around the third quarter of FY 20-21. However, with the return of curfews and limited lockdowns controlling the fate of restaurants, fear is gripping even the strongest among us. As a small restaurant owner, adversity comes with the job description. But for the first time, in the face of prolonged uncertainty, I’m worried for my employees, colleagues, and peers, for their emotional well-being as a direct consequence of enduring this constant state of fight or flight.
We need help. SOS.
Thomas Fenn is a partner in Delhi-based restaurant Mahabelly, and Member, Managing Committee, NRAI
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