BUSINESS: WHAT’S EATING THE RESTAURANT BUSINESS?

05 Jul 2020

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A shopkeeper sells halwa puri in Namak Mandi, Peshawar | Shahbaz Butt/White Star
A shopkeeper sells halwa puri in Namak Mandi, Peshawar | Shahbaz Butt/White Star

Sadaf Khaavar is a recent entrant into the hospitality industry of Lahore. She has been running a home-based catering business for eight years but her first restaurant, Screaming Beans, was scheduled to open this year on March 23. With the pandemic crisis blowing up, however, the opening was postponed.

Eventually, Khaavar held a soft launch, offering only deliveries and take-away options, on the first of Ramazan. “Even during the initial complete lockdown, I still had business for my home-based catering, particularly from acquaintances, since they were confident about the hygiene standards I maintain,” she tells Eos. With the Screaming Beans restaurant now up and running, she is offering discounts and is seeing a slow trickle of first-timers. However, in the current scenario, she says, “While first-timers are few, my major success is seeing those initial customers turning into repeat customers even during this time.”

As restaurants resume business after shutdowns amidst the coronavirus pandemic, it is as though they have awoken from a slumber to a very different world of dining. It is out of the question to receive customers for dine-in; only delivery and take-away options remain. But although there has been no evidence of Covid-19 being transmitted through cooked food, many people still remain wary of consuming food not prepared at home.

An RMC official makes markings to keep customers at safe distances from each other when buying food from street vendors on Iqbal Road, Rawalpindi | Mohammad Asim/White Star
An RMC official makes markings to keep customers at safe distances from each other when buying food from street vendors on Iqbal Road, Rawalpindi | Mohammad Asim/White Star

So how are eateries adapting to keep their businesses running or even keeping them afloat?

While following all the required standard operating procedures (SOPs), in order to ensure the health of customers and staff, restaurant owners need also to carve out their place in an ever-shrinking economy, where almost every individual’s disposable income has taken a massive hit.

With restrictions on dining out still in place because of the pandemic, restaurant owners struggle to draw in customers. What does the future hold for them?

Most restaurants are following some version of a basic hygiene regime, which includes regular temperature checks of all staff, use of gloves and masks and sanitisation of the premises.

For instance, in the cafes of the Coffee Planet chain, a non-negotiable line is drawn at the counters where the orders are placed. The staff members who take orders stand on one side of the counter and cannot cross over to the other side where there is a possibility of contact with food. But Moeez Mir, the Chief Operating Officer at Coffee Planet, Pakistan, says, “This is not enough. We have to ensure that all our staff actually understands the gravity of the situation and the reason for each measure so that they comply seriously. We had to sit all the staff down and explain the rationale behind it.”

Carrying out the required hygiene measures has a significant impact on the running cost of restaurants. Given the dwindling sales, these higher costs mean many eateries have had to let go of their staff because of extended closures and then, later, low sales. Many of the restaurants are currently operating only to minimise losses, or just to break even.

Ashfaq Raza, Director Operations of Mr Burger, a popular fast-food joint with branches across Karachi, says, “Currently we are conducting operations only to ensure that our staff is retained. Given the bleak business at the moment, we are barely breaking even, and have divided the shifts of all wage workers to alternate days to ensure that no one is unemployed.” These sentiments are echoed by most restaurant owners Eos interviewed. They realise that the onus of their staff’s livelihood is on them.

Being ardent foodies, Sair Ali and his wife are among those customers who are ordering in food as regularly as they did in the pre-pandemic days. Ali, a father of three, based in Lahore shares, “I was in Taiwan, Thailand and Singapore during February this year and I noticed that, despite all their preventive measures, there were no restrictions on consumption of food from restaurants,” he says. “Hence, when the pandemic came to Pakistan, we continued to order food regularly, as was our norm.

“During this time, I have used two yardsticks to decide places to order from or to avoid. Firstly, restaurants whose management seems to have a nonchalant attitude towards the pandemic, those are the ones that I feel may not be safe options anymore. Secondly, restaurants where I had noticed an excessive focus on hygiene, even in the past, seem like much safer bets.” But the couple sorely misses the experience of dining out. “Once dine-ins are operational and correct SOPs are in place, my wife and I will definitely be eating out once in a while,” says Ali. He adds, however, “I am not yet comfortable taking my kids out.”

Abeeha Zawar of Karachi also feels the lack of socialising that goes hand in hand with eating out. “My friends and I are ardent restaurant-goers, and this pandemic period has made it very clear that delivery and take-away can never be a replacement for the actual feel of fresh food served on the table, and shared with a group of people we love,” she says.

Zain Jafar, a social-media marketer who has worked with multiple restaurant clients based in Karachi, points out that one can see a major shift in the focus of the restaurants. “Previously, a lot of promotion used to be based on the ambience and the eating experience,” he says. “All of a sudden, we have gone back to the basics — just the main features and functionality of the product. Restaurants want to promote their food, hygiene and ease of ordering and delivery. No fancy spiels.” Despite all the promotion, delivery and takeaways are not making up anywhere near the lost sales of dine-ins, however.

Fast-food chain Howdy uses drones to deliver food to ensure contact-less delivery; Sweet Tooth serves a small table for drive-thru customers to enjoy a ‘dine-in’ experience in the safety of their cars and recyclable food packaging to cut down the amount 
of garbage | Facebook
Fast-food chain Howdy uses drones to deliver food to ensure contact-less delivery; Sweet Tooth serves a small table for drive-thru customers to enjoy a ‘dine-in’ experience in the safety of their cars and recyclable food packaging to cut down the amount of garbage | Facebook

According to Asad Sheikh, a foodie who also runs a popular food group on Facebook, “This is the time when restaurants must get creative [about their businesses]. They should develop more economical menus and create offers that entice the customers.” In fact, various eateries have introduced DIY (Do It Yourself) menus, which include half-cooked food with all the required ingredients and with detailed instructions on how to prepare the meal to serve. This has become popular because it allays the consumers’ fears of potential infection, since the food is cooked in the safety of their own homes. 

For now, many restaurants have had to redo their menus to accommodate the recent developments. Rina’s Kitchenette is one of the popular dining places of Lahore that barely ever used marketing tools during the pre-pandemic days, and still had queues outside every weekend. One of its partners, Ammar Mohsin shares, “We have redesigned our menu to ensure that we are offering foods which travel well and are easily microwaveable. We do not want to compromise on the quality of our product and will only serve those items whose quality can be retained during delivery.”

Turab Abbas, who recently set up an outdoor barbecue joint called Atrium Lounge in Faisalabad says, “We are situated right by the canal, which made for an ideal location for a low-cost social gathering in a casual environment. But with dine-ins off limits now, we have had to make a few changes. For instance, we soon realised that pizzas are one of the most travel-friendly food items and, since we already had a brick oven for our novelty naans, we started brick-oven pizzas in our authentic barbeque flavours, which really picked up with the clientele along with the regular menu.”

Abbas adds: “We recently started operations and this factor worked in our favour, because we were already in experimentation mode and more than open to trying unconventional ideas. Our next phase includes providing frozen half-done versions of our food, so that the clients can just grill the food and have their own barbeques at home.”

It is clear that, to survive this crisis, one needs to be open to the idea of trying ideas beyond the comfort zone, or else prepare for eventual insolvency. Umer Hussain, owner of Sweet Tooth, a restaurant with 16 branches spread across Lahore and the northern areas, points out that he is “operating only a single branch at the moment.” He is also concerned that takeaway food packaging is increasing the amount of garbage. Trying to overcome this environmental concern, he makes reusable packaging: pizza boxes doubling as Ludo boards, complete with pop-out pieces and an origami dice, are an innovative addition. The drive-through service also provides small table sets, that can easily fit in the cup holder between the two front seats of a car; the customers can have the closest possible dining-in experience in the safety of their own cars.

Many people have avoided ordering food for the simple reason of minimising social interaction. Fatima Chaudhry, a mother of two and a food lover, previously used to order in food at least thrice a week. “While my love for food is still very much there, the risk is just too high,” she says. “The packaging could be contaminated, then the exchange of money and all — it is just too overwhelming.”

Bearing in mind such reservations, Howdy, a fast-food joint in Islamabad and a few other cities, even experimented with food deliveries via drones. According to its owner, Saail Khan, “Our aim was to minimise human interaction while making food easily accessible to our customers.”

The sudden closure of all restaurants in March 2020 has shed light on an integral weak link in the restaurant industry. The financial model does not allow for a fallback of even two weeks of low or no operations. Start-up eateries aside, the well-established ones should develop a financial plan which allows them to support their overheads for at least two weeks or more in such times of crisis.

Although most eateries in Punjab were allowed to operate on a delivery and take-away basis throughout without any hitch, Mohsin of Rina’s says, “This mode of business barely accounts for one-fifth of the sales. With much of our cash tied up in restaurant inventory and expansions, it is the regular revenues which restaurants rely on for routine expenditures.”

The fact remains, even when things settle down, they will not be the same as they were in the past.  Even when dining out becomes permissible, people may still be hesitant to eat out, and their disposable income may also be much lower. Additionally, social distancing will require tables to be spread far apart, meaning the same rentals and utilities but capacity for much lesser customers at a time.

If menus, cutlery, crockery, etc., will be made disposable for hygiene reasons, not only will it contribute to higher operational costs, their environmental repercussions can also not be ignored.  Add to that the increased hygiene and disinfection costs, and the general overheads will skyrocket, while revenues are expected to decrease. Another unavoidable factor is the simultaneous shrinking of the economy, causing general income levels to fall. Since eating restaurant food is generally considered luxury expenditure in Pakistan, it may take a sharp hit as people’s consumption priorities focus more towards the essentials rather than luxuries. 

Lest it be considered an issue only for the upper class, a roadside vendor selling chaat and pani puri in Lahore is equally worried. Despite the affordable prices of his food items, his sales have also declined significantly, he says. The silver lining in the situation for him is a naan tandoor that he operates in the evening. “Everyone still needs roti so at least those sales have not gone down drastically,” he says.

Published in Dawn, EOS, July 5th, 2020