COVID-19: Eas­ing of dine-in re­stric­tions may bring only lit­tle respite to restau­rants

Business Day (Nigeria) - - NEWS - BUNMI BAI­LEY

Restau­rants in Nige­ria have in the past five months seen up to be­tween 50 per­cent and 60 per­cent drop in sales due to re­stric­tions im­posed by the Fed­eral Govern­ment to com­bat the spread of the coro­n­avirus pan­demic, ac­cord­ing to es­ti­mates by prac­ti­tion­ers who spoke with Busi­ness­day on the mat­ter.

A re­lax­ation of the re­stric­tions by the mid­dle of this month will of­fer lit­tle com­fort to the busi­ness, ex­perts say.

A Busi­ness­day sur­vey of some restau­rants in La­gos and Abuja, Nige­ria’s ma­jor cities, found that they were not gen­er­at­ing enough sales from take- outs ( pre­pared food pack­aged to be con­sumed away from its place of sale) and food de­liv­ery ser­vices they were al­lowed to op­er­ate.

Wale Abioye, a man­ager at Sweet Sen­sa­tion, a Lagos­based fast food restau­rant, says op­er­a­tors gen­er­ate more rev­enue from dine-in ser­vices than take-outs be­cause peo­ple are more likely to make more pur­chases if they stay longer in the restau­rants, un­like one-time pur­chases from take-outs.

“Govern­ment reg­u­la­tions and the fear of COVID-19 are a chal­lenge be­cause there is no con­tin­u­ous pur­chase. A lot of peo­ple that do re­peated pur­chases through de­liv­er­ies which cost money don’t get the full value of their money for what they are spend­ing on, be­cause they pay that part of value for de­liv­er­ies,” Abioye states.

Gboyega Olu­rank­inse, owner, Elevens Restau­rant and Lounge, a La­gos-based restau­rant, notes that gen­er­ally for restau­ra­teurs, take-outs have af­fected their busi­ness be­cause most peo­ple love dine-in ser­vices as they pro­vide an av­enue for peo­ple to gather, re­lax and spend time with their fam­i­lies.

“For me, sales have roughly dropped by 60 per­cent. And with that, we had to cut cost by ra­tioning staff and re­duc­ing some pro­cesses like en­ergy cost,” he says.

In March, when the num­ber of new cases of COVID-19 started to in­crease, restau­rants lim­ited dine-in ta­ble ser­vices to only 20 peo­ple, while other cus­tomers were of­fered take-outs in­stead.

When there was a full lock

down in April, some restau­rants were com­pletely closed while oth­ers that opened only of­fered lim­ited menus. Af­ter the lock­down was par­tially eased, the govern­ment di­rected them to of­fer only take-out ser­vices to their cus­tomers.

“It is a strug­gle for us be­cause sales have dropped be­low 50 per­cent and be­cause of that, we had to send half of our staff home since we don’t re­quire their ser­vices,” Stephine Emeruwa, a man­ager at Ketchup, an Abuja-based restau­rant, says.

Emeka Vin­cent-eloagu, owner and lead chef at Hélène’s Food Co, an Abu­jabased gourmet food com­pany, states that busi­ness has been very slow as they are not get­ting enough walk-ins and dine-ins like be­fore and so a lot of rev­enue is be­ing lost.

“We are func­tion­ing at most at 5 per­cent of our usual ca­pac­ity. This means we are not re­ally mak­ing ends meet,” he says. The hos­pi­tal­ity in­dus­try, which restau­rants are a part of, recorded the worst half-year performanc­e in his­tory as hote­liers, brand and fran­chise own­ers, and des­ti­na­tion man­agers de­cry that the in­dus­try lost over N50 bil­lion in the first half of 2020.

“The pur­pose of Fast Food restau­rants and dine-ins are in two folds, a form of meal tourism and es­sen­tial food ser­vices. With the lock­down and re­stric­tion of pub­lic gath­er­ing, the meal tourism as­pect of their food has died,” Cheng Fuller, a re­tail ex­pert, says.

“This is al­most like 65 per­cent of their ad­dress­able mar­ket taken off the ta­ble, which is peo­ple who just come to re­lax and en­joy the ar­moire. So, imag­ine a busi­ness that caters for 100 cus­tomers but by de­fault, 65 per­cent of cus­tomers have been taken away. So, the

po­ten­tial for rev­enue earn­ing is just from 35 per­cent of cus­tomers do­ing take­aways,” he says. Some re­lief is com­ing for the restau­rants as over the week­end, the La­gos State govern­ment said they can now op­er­ate dine-in ser­vices from Au­gust 14 on the con­di­tion that they main­tain 50 per­cent ca­pac­ity.

But even with the re­open­ing of dine-in ser­vices, ex­perts are of the opinion that it is still nigh-im­pos­si­ble for restau­rants to make a profit at re­duced dine-in ca­pac­ity.

“There is a dif­fer­ence be­tween 100 and 50 per­cent ca­pac­ity. If they op­er­ate at 50 per­cent, they will not have the same client base they used to have be­fore and also, they may not even get the 50 per­cent ca­pac­ity of peo­ple due to lack of con­fi­dence of peo­ple to eat out,” Ay­orinde Akin­loye, a con­sumer an­a­lyst at CSL Stock­bro­kers, says. “So, the best they can do is ra­tioning their cost and boost their on­line de­liv­ery plat­forms.”

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