With consumers now stepping out of their homes and trusting restaurants, the face of the dine-in and food delivery industries has changed since the lockdown in March affected them severely. While they haven’t fully recovered yet, there is hope and the future looks full of potential.
With industries still scrambling to adjust to the pandemic, we were witness to the brutal battering and subsequent rise of the dine-in and food delivery industries in our country. From March onwards, lockdown brought them face to face with severe problems, like low footfall because of fear amongst the consumers, inability to thus pay rent, and having to fire employees. The National Restaurant Association of India cautioned that even 10%-20% of job losses among its 7.3 million employees in restaurants across India would mean up to 15 lakh unemployed people. With the industry looking at losses of around Rs 1 lakh crore during the lockdown, it became extremely hard for many restaurants to keep their heads above the water.
Restaurants have had to re-strategize their operations to accommodate new social changes like distance seating, paperless menus, constant sanitization, and temperature checks. The coming of October and the festive season saw an increase in dine-in traffic, with consumers struggling to sneak in one moment of solace in their lives. However, this industry is yet to recover from its Covid slump. With only 17% of dine-in restaurants open for business (and at low capacity), the industry is operating at 8-10% of pre-Covid levels. According to a report by Zomato, “Out of the 83% restaurants that are not open for business, 10% restaurants have already shut down permanently and we anticipate an additional 30% restaurants to not reopen at all. Remaining 43% are closed right now but likely to open, as the situation becomes better.” Some Khan Market favorites that have closed permanently include Café Turtle, Smoke House Deli, and Sidewok.
Quick service restaurants like Burger King and McDonald’s have had to convert their dine-in consumers into online consumers. They have had to shift their 20%-30% online revenue models to a whopping 70% by building their own delivery systems while also being dependent on other deliverers like Swiggy and Zomato.
The conditions aren’t as brutal for the food delivery industry that continues to recover steadily. Zomato reported, “We estimate that between other food aggregators and direct restaurant channels, Indians have ordered 20 crore times since the lockdown. The number of restaurants offering food delivery is at 70% of pre-Covid levels. Out of this, about 5% of restaurants did not offer food delivery services pre-Covid. Most of these are dining out centric places which have shown agility to pivot to food delivery.” While cities like Delhi and Mumbai are nearing full recovery, cities like Kolkata and Ranchi have already recovered.
This recovery is credited to an increase in order size and time spent at home by consumers. With consumers spending festivals like Diwali, Teachers’ Day, etc. at home with their families, the order size has increased. Working from home has also created an increased dependency on online food ordering since there is hardly any bifurcation between a workspace and a personal space- this makes the consumers more easily tired. Now, with premium or more expensive restaurants also offering online delivery, consumers’ trust has increased and also attracted better traffic. It was also observed that the ordering rate of customers after their first order during lockdown is the same as pre-Covid. This shows that the first order is the key for consumers to cross the bump of safety perception.
Feature Image Credits: Financial Times
Kashvi Raj Singh