A day after writing to Prime Minister Narendra Modi, the National Restaurant Association of India (NRAI) has written to mall owners and landlords seeking support in the wake of disruptions due to the third wave of COVID.
The restaurant association, representing over 5 lakh restaurants across the country, has written individually to all prominent mall owners and an open letter to other landlords suggesting certain immediate measures in case of any disruption. “Uncertainties around the virus and signs of low consumer sentiments are very visible and that doesn’t augur well for anyone, be it property owners or business operators,” NRAI said in a statement.
In its letter to mall owners, NRAI wrote that with high fixed overheads, expected restrictions on operating hours, revised social distancing norms and reduced capacity utilisation, any drop in consumer sentiments can be catastrophic for the sector.
Reiterating the support it sought from mall owners during the first lockdown in 2020, NRAI has sought a revenue-sharing model to tide through COVID restrictions, a waiver on fixed expenses in case of lockdown.
“The whole model of engagement needs to move towards a totally variable model till the time we are able to see through the period of COVID induced restrictions (occupancy/timing restrictions, curfew) being imposed by various state/central authorities. Such a revenue-share model will ensure that the fortunes of both parties, i.e., the restaurants and the malls are firmly inter-linked,” NRAI wrote.
In its open letter to other landlords, NRAI has asked for a complete waiver of rentals and Common Area Maintenance (CAM) should restaurants be shut for dine-in completely.
In cases where there are restrictions imposed on operations such as limiting hours of operations, limited capacity or allowing only delivery, restaurants want a pure revenue-sharing model to be adopted for that period.
Post that, NRAI has also sought for no minimum guaranteed rents for three months that they work on a pure revenue share model instead. “For stores with longer past occupancy record, this revenue share may alternatively be linked to their sale as a percentage to their past period sale,” NRAI added.
Lastly, it has also sought for CAM to be maintained at 50 percent of the agreed rate during the period of restrictions
NRAI has said that discussions on this subject should start now as volumes are bound to drop and restaurants may need to do fresh budgeting of incomes and expenses and make them commensurate to reduced business volumes.
NRAI’s letter to mall owners and landlords comes a day after the association wrote to the Prime Minister recommending that suitable directions be passed to states to consider hospitalisation data to determine imposition of further restrictions.
“Experience over the last two waves shows that the pandemic graph in fact continued to decline after restaurants were opened up for operations – albeit with attendant seating/timing restrictions. The industry has continued to operate at 50 percent capacity since then – despite other activities like public transportation/metros/airlines being permitted to operate at full capacity,” NRAI wrote.
The association also recommended permitting longer operating hours for the industry, since it will reduce over-crowding, and prevent further job losses for workers in the restaurant industry.
It has also sought for directions to be issued to states to classify food delivery from restaurants as essential services.
In the wake of COVID cases surging across the country, states have begun imposing restrictions such as weekend curfews and in some states, malls, cinema halls, schools and colleges have been shut down.
On January 7, India reported 1.17 lakh cases being added in the last 24 hours, while the recovery rate remained at 98.38 percent and a death rate of 1.37 percent. Cities such as Mumbai and Delhi continued to report the highest number of cases.
