India’s food service industry, delivery platforms to take a hit as new restrictions hamper movement

INDIA – India’s foodservice industry is set to suffer a new set back after the state governments of Delhi and Maharashtra imposed new restrictions to curb the recent spike in Covid-19 infections.

Delhi has put in place night curfews starting from 10 pm and ending at 5 am. Maharashtra state which includes Mumbai has, on the other hand, imposed a stricter curfew, starting at 8 pm and ending at 7 am.

Additionally, Maharashtra has imposed a total lockdown during the weekend starting on Friday at 8pm and ending on Monday at 7am.

These new restrictions will have an adverse impact on India’s food service industry which had almost rebounded to pre-pandemic levels a couple of months ago.

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With the new regulations, the progress that had been made will be almost wiped out as lunchtime deliveries which had started to resume will plunge once again as most Indians rarely order lunch when they work from home.

Restaurants shut down operations

For Maharashtra, restaurants like other businesses would be shut down at 8pm before Indians even start thinking about their dinner.

According to Anurag Katriar, president of the National Restaurant Association of India, this will wipe out almost 75% of their business which is mainly reliant on dinner orders.

Furthermore, weekend lockdowns will deal another blow to the business which also heavily relies on weekend orders to survive.

As a result of the new restrictions, several large chains have announced closure of their restaurants in Maharashtra.

With only 10-15% of revenue for dine-in restaurants coming from online delivery, those that closed are simply not willing to fight for the sliver of revenue.

Riyaaz Amlani, chief executive of Impresario Entertainment and Hospitality, which runs restaurant brands including Social, Saltwater Cafe, and Smokehouse Deli, said most of his 27 outlets in Maharashtra would stay shut.

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Food Delivery Platforms feel the pinch

Food delivery platforms Zomato and Swiggy are also feeling the brunt of the latest round of restrictions imposed by governments in two of their biggest markets.

Both platforms have already stopped taking orders at 7:30 pm and missed out on peak time for dinner orders.

“Food delivery volumes were very lukewarm on Monday evening. Not many eat dinner before 8 pm in India,” said Anurag Katriar, president of the National Restaurant Association of India and the CEO of deGustibus Hospitality, which runs Indigo Deli and other brands.

He added that he wasn’t sure if his outlets would stay open from Wednesday. His cloud kitchens on the other hand would continue to operate, he said.

Mumbai Civic Body comes to the rescue

The new restrictions caused an uproar among foodservice industry stakeholders with members of various restaurant associations pushing to extend the delivery timings as more than 50% of business is from dinner and late-night deliveries.

In response, The Brihanmumbai Municipal Corporation (BMC) which is in charge of Mumbai has issued an order, allowing home delivery of food and essential supplies through online service providers 24 hours on all days of the week during the ongoing state-wide coronavirus-induced restrictions.

The BMC also allowed road-side food stalls, including fruit vendors, to provide parcel and take-away services during the weekend lockdowns.

“No person is allowed to stand there and consume food,” reads the order issued after a meeting conducted by the state chief secretary with municipal commissioners and district authorities.

It added that the movement of cooks and delivery personnel among other essential service providers will be allowed between 7 am and 10 pm on all days during the restrictions, including the weekend lockdowns.

Although the food service industry is expected to take a hit from the new restrictions, Mumbai’s revision to allow for deliveries will at least provide a lifeline to many food service establishments that were staring at potential closures if the new laws remained unchanged.

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