Indian restaurant industry functioning at 8-10% of pre-Covid levels

Sangeetha Chengappa Bengaluru | Updated on August 19, 2020

10% of restaurants have shut down permanently, another 30% unlikely to reopen

The dining out industry in India is yet to bounce back and is operating at 8-10 per cent of pre-Covid levels. The slump in the industry is largely driven by markets being in lockdown, consumers not stepping out due to fear of transmission and restaurants not opening up, even if the city is not in lockdown.

Even in cities where restrictions have been lifted, only 17 per cent dining out restaurants are open for business at the moment which are also running at low capacity. Out of the 83 per cent restaurants that are not open for business, 10 per cent have already shut down permanently with an additional 30 per cent restaurants unlikely to reopen at all. The remaining 43 per cent are closed right now but are likely to open, as the situation gets better.

According to Zomato’s mid Covid-19 report, only 19 per cent of restaurants in Bengaluru are open for business, 12 per cent in Delhi NCR, 21 per cent in Hyderabad, 29 per cent in Kolkata and 9 per cent in Chennai.

Most of the customers plan to decrease spending on dining out in the near future and some of this spend will shift to food delivery. Sixty per cent of restaurateurs said they estimate to retain less than half of their original business volumes for a few months even post-COVID.

Safety and hygiene have become a permanent addition to the customer’s decision making while dining out. In markets with low Covid incidence (e.g. New Zealand), safety and hygiene still figure as the top factors but other factors like price and location have already started commanding a higher significance in a consumer’s decision making process compared to two months ago.

The report says, strong recovery in international markets paints an optimistic picture as Zomato’s dining out transactions in markets like New Zealand, UAE and Portugal are already back to pre-Covid levels. However, recovery in India will be slow and would largely be driven by the industry’s ability to build back consumer confidence.

Published on August 19, 2020

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