The Indian F&B industry, which employs 7.30 million people, has taken a massive hit during the pandemic and a large number of people’s livelihoods are at stake. With no clients for the last four months, restaurants are struggling to retain their businesses.
In May 2020, the National Restaurant Association of India launched the Rise for Restaurants platform to urge consumers to help their favourite restaurants tide over these tough times.
The platform is offering ₹1000 virtual cash vouchers at a discounted rate of ₹750 for restaurants in metros as well as tier-I and tier-II cities. These cash vouchers can be redeemed within six months from the date of purchase.
The campaign is still on and the association is intensifying its promotion to get patrons to support the F&B industry.
Anurag Katriar, President, National Restaurant Association of India (NRAI) and Executive Director & CEO, deGustibus Hospitality talks to LuxeBook on the campaign’s progress and how the country can drive consumption in order to survive.
Tell us about the Rise for Restaurants initiative.
The industry is suffering from massive cash flow concerns. We are not seeing an immediate reopening and we are definitely not seeing the business picking up any time soon. How do we survive?
Rise for Restaurants has two fundamental ideas. One idea is to leverage some part of cash from our customers so that we can ensure that our employees have enough food on the table. What this also does is helps us build and strengthen our relationship with our existing customers. It will also ensure that once the lockdown is over, these people will come back to my restaurant as they have paid 25% of the value they are consuming upfront.
What is the response to the campaign?
It is a very mixed response. Some brands are seeing a very good offtake, some are not. Based on limited data, we have realised that the brands that are not sending the message to the consumers are the ones that are selling fewer vouchers. NRAI has created a platform. At the end of the day, it is the responsibility of the brands to reach out to the consumers and say, “Hey! here is a chance for you to get something at a discount.” We have been communicating with our members on how they can convey the message to their consumers.
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How are restaurants using this cash inflow?
We are only using it for people; whether it is to pay our own employees or a small supplier. We are taking care of only two costs concerns right now. We don’t just deal with big-ticket suppliers, but also small farmers, and have to take care of their needs as well. And that’s what we are looking to do with whatever resources we have. This has been the focus right since the beginning.
Will the Rise for Restaurant vouchers help outlets stay afloat?
I wouldn’t say that the volumes are such that it will allow brands not to die, but it gives them a chance to live. Most of us can’t pay full salaries to our people right now. We don’t have the means. We are just making sure that they get enough money so that they don’t have a problem with food on their plates.
The money is very helpful. You can only take care of certain requirements with zero money coming in for four months. It is not easy.
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What support has the sector received from the government?
The hon. Finance Minister Nirmala Sitharaman promised that MSME loans would be extended to us and they changed the definition of MSME (Micro, Small and Medium Enterprises), which is helping us. She also said that IT refunds will be expedited. I know many companies are getting their refunds. I, too, have gotten mine for the last two years.
Though we had asked for license renewals to be waived off, for the moment they have been deferred. The moratorium on loans is also helping.
Talking about trade-specific requirements, the F&B industry has sought support from the government on two policies. One is to bring back input tax credit on GST and the second is to form a more detailed e-commerce policy, which protects the interests of small restaurateurs and food service business owners and not only the interest of the aggregators. I am told that these two are under consideration and are being worked on.
Restaurants that have opened are not seeing the volumes they expected…
We have to accept a very harsh reality, which is that the business in the post-pandemic world will not be at par with the business done in pre-Covid times. This is true for all sectors. Any commercial agreement of the past cannot remain the benchmark for doing business in the future. They all need to be renegotiated. Whether it is between an employer and an employee, a landlord and a tenant; with an aggregator or even between you and your customers. Everything needs to change, including menus and operations. This is taking time, which is the reason why we are seeing massive failure rates wherever people are opening their restaurants. Business is sub 20 per cent across the board and at those numbers, you can’t even survive.
On a larger level, giving permission to open restaurants is not going to help. We need to start consuming. There is no way we will see any change in our volumes.
The industry is standing strong together to come out of this situation along with the support of its patrons. We are grateful to our patrons for the response and support. We will be back stronger and are eagerly looking forward to serving our patrons across the globe.
— Zorawar Kalra, Founder & MD, Massive Restaurants
Are there any other countries that India can learn from?
Look at what Rishi Sunak has done in the UK. In the month of August, anyone who is going to eat out from Monday to Wednesday will get a 50% discount up to 10 pounds. This is a very unconventional, but sharp move. Rather than giving money to the businesses to keep surviving, they are giving money in the hands of the people so that they consume.
With consumption, even ancillary businesses will reopen and there will be more jobs in the market. The farmer who is growing vegetables or grains gets a job, transporters start their business… It is a cycle. I would like to believe that in a developed nation, hospitality is that fuel that will propel the engine of growth.
We can’t expect the same in India, but whatever we can do to accelerate consumption is very important to examine and implement because that is the only way fortunes are going to change.
How is deGustibus Hospitality dealing with the crisis?
We have kept everything shut. We have not even started home deliveries so far. We believe that it is unfair to expect our people to come to work when we ourselves are not going out. It is not safe. And in retrospect, we can say that even business is not worthwhile.
We are reimagining our business, we are resizing our teams. We are putting people on furlough, but at the same time making sure that there is enough food on their plate. Nothing beyond that. We are holding on patiently. We don’t have enough resources so we have to spread it out for the longest possible period.
What are the other initiatives that NRAI is working on?
I will quickly list out some of them:
We started the Rise for Bars initiative and have made cash transfers to about 3300 people, many more will follow in the coming days.
Very soon, we will be sending out one-month ration kits to about 6000 families of our F&B employees.
We have created a full SOP for COVID-proofing our restaurants, which is available free to our members.
We are helping them in advocacy with the government. We are also helping them negotiate with landlords, especially malls and cluster owners.
We have been conducting webinars.
Now we are going to create an industry-wide loyalty programme, and we will hopefully have solutions to our delivery aggregator problems soon.