Bearing heavy financial losses and anticipating a long recovery time for the economy, Noida’s standalone fine-dine restaurants decided to remain shut despite permission to operate under strict restrictions.
High rentals, operation costs and investments, the curfew time that clashes with their peak sale hours, downsized seating capacity and a sense of fear among the customers in wake of rising numbers of Covid-19 positive cases are issues that discouraged them, restaurant owners and their associations said.
On Tuesday, restaurants remained shut in the sector 18 market and other markets in Noida. Those in shopping malls too were are waiting for the right time to reopen. Some of them were hoping to renegotiate rent agreements with the landlords.
According to the Noida Chapter of National Restaurant Association of India (NRAI), a few restaurants in the city have already decided to close down.
“Operation cost includes salaries, rentals, electricity and gas, and food cost. As a restaurant owner I don’t see even partial recovery in these times. People are scared to come out, and given the current curfew timings of 9pm, we will have to start winding up from 8pm taking last order at 7pm. So there is no use,” said Varun Khera, head NRAI, Noida chapter who owns Desi Vibes restaurant in sector 18. “Three restaurants have already closed down and one is thinking of ending the business. We cannot share the names, but we at association are trying to convince them otherwise. These are tough times for this industry,”
According to the restaurant owners, a restaurant in sector-18 pays a rent between ₹5 lakh to ₹6.5 lakh a month, and bears an operation cost of ₹40,000 to ₹50,000 (excluding rentals) per day, something they don’t see they can meet in the present scenario.
“Every restaurant that I know of had to incur a loss of stock worth ₹2.5 to 3 lakh when they shut on March 20, five days before the nationwide lockdown. All food stock, beverages were wasted. Now to operate again, we will have to invest at least ₹3 lakh, something we don’t see returning at all. Customers are scared and even if they come, the peak hours are already compromised,” said Rishabh Proothi, owner of Garam Dharam, Noida.
He said that he will wait till July to observe the market and resume operations only after his landlord comes to an understanding on the rent. “In some cities like Meerut, restaurant owners have asked the landlords to share their profits till the market stabilises instead of charging rent,” he said. “Being a franchisee based restaurant, I also have to pay royalty. Even if I start operations, I won’t be able to pay proper salaries to the staff. In my opinion, till a cure doesn’t come out, I don’t think restaurants will get back to normal. Families would want to take any risk.”
A few restaurant owners even fear closing down if the business went as usual.
“Main revenue comes from liquor, parties and dinner, and none of these are possible in the current scenario. So far, we had no meeting with our landlords yet. We did not pay rent for the month of April and May, and it was decided that once the business restarts we will talk about the rentals, we hope that some compromise is reached. I fear, if it continues like this for another two months, we may have to close the business,” said Ashish Sakhuja, Patiala Kitchen, sector 18.
“Currently the future of restaurant business in Noida depends on landlords. If they give us some rebate, we might just kickback in coming months,” adds Desi Vibes’s Khera.
According to Naresh Madan, director of restaurant chain Imperfecto that has two branches in Noida and elsewhere in Delhi and Gurugam, they expect only 10 percent return to their daily operation cost.
“Right now we have lot of things to settle with the landlords. We don’t know what exactly they want from us, and we are hoping to come up for a mutually benefiting agreement, We have apprised them that the customers are not coming so let’s see. We are really hopeful of some intervention from the government in terms of rebate in taxes, the future of restaurant industry is in perils right now,” said Naresh Madan. “If we operate now, we expect not to get anything more than 10% of the operation cost, which we cannot afford. So till a vaccine doesn’t come, we may take at least 12 to 18 months to get back to pre-covid era and that’s us being optimistic.”
