Covid-19 in Pakistan: Eateries continue to see sales dip

Many food businesses resort to workers’ layoff as profits dive


Afreen Mirza May 14, 2020
DESIGN : IBRAHIM YAHYA

KARACHI: It happened so quickly, on Tuesday (March 17), we were ordered to install hand sanitisers at our restaurants, by Wednesday (March 18), we were only allowed to entertain takeaway and delivery orders.

By mid-Friday (March 20), we were informed about the new standard operating procedures (SOPs) and within an hour, we were asked to cease operations for an indefinite period of time, Ameen Shaikh, the owner of Spice restaurant narrated to The Express Tribune.

Restaurant operators and food service workers are reeling from the fallout of the coronavirus pandemic, which has forced the closure of dine-in services at thousands of restaurants, bakeries and other public hotspots across the country. Apart from catering to the food cravings of people, the food industry employs hundreds of thousands of people in diverse roles.

As the Sindh government announced the closure of restaurants and cafes, numerous employees were left devastated with many of them being forcefully asked to resign while some were fired. A few workers received only half their salary for the full month and some were not paid any salary at all.

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Waiters, who worked on daily wages and earned a massive chunk of their income from tips, were left bewildered with no means of earning. While a few of them left for their hometowns, other were left to grieve in Karachi.

“I was asked to wait. I used to call my owner every day and he would request me to wait more while my family suffered,” said Ilyaas, a delivery boy in one of the fast-food eateries located in the vicinity of Gulistan-e-Jauhar.

“We did not even have money to eat and my landlord was demanding rent. I had nothing in my pockets.”

After keeping a complete lockdown in place for over a month, the Sindh government permitted restaurants, cafes and delivery services to resume operations with instructions to stick to delivery and takeaway only. Dine-in is still prohibited in the province to contain the spread of the Covid-19 virus.

“Despite the relaxation in lockdown, I have still not received my full salary,” he said. “My owner tells me that he has endured a hefty loss and he can only pay half the salary.”

Restaurants

Mohammad Omais, partner at Pay se Pizza, told The Express Tribune that the economy is contracting already and small businesses and restaurants have suffered a lot. “They have to pay rent, bills, salaries, pending installments and bear other expenses.”

Echoing his views, Shaikh added that restaurants located in low-end areas or those having just one or two branches could not survive the unexpected financial crisis.

In a bid to recoup the hefty losses borne on account of the lockdown, a handful of renowned eateries are offering a range of discounts to grab attention of the consumers. However, small restaurant owners disagree with this marketing strategy.

“There is no need to offer discounts because people already have fewer options,” Omais commented.

He saw no need for prominent restaurants to offer deals because their brands were already famous. Furthermore, the restaurant owners held the view that it would take at least six months after the eradication of the virus to recover the losses.

Khan Haleem owner Faraz Khan said it was just here (in Pakistan) that the food businesses were facing major hurdles. “I heard that in Saudi Arabia, the UK, USA and all other places, food deliveries were operational despite the closure of industries.”

Bakeries and confectionaries

“Our restaurant and bakery remained closed for more than 30 days and ever since we have reopened, limited timings and rising cases of Covid-19 have made it difficult for us to financially sustain ourselves,” remarked Lals Patisserie Chief Executive Officer (CEO) Madiha Sultan.

Speaking on the resumption of delivery services, she said that sales were sluggish. She highlighted that other food outlets were also experiencing a drop in sales with some encountering 15-30% contraction in the number of orders.

Keeping in view the discounts offered by other bakeries, Sultan refused to follow the strategy claiming “at this point, we cannot afford to offer discounts. Instead, we need to increase prices.”

Talking about the future, the CEO remained uncertain as to how long the recovery could take. However, she added that unless things became normal and people were able to roam the streets freely, the food industry could not thrive.

She felt the need to bring other brands onboard to share the retail space in a bid to cover costs or shift premises as it was becoming highly infeasible for her to operate alone like she did in the past.

Another renowned bakery owner, on condition of anonymity, said he was operating with limited staff.

“We had to ask people to accept voluntarily pay cuts because there have been many layoffs and most of those, who we retained, are on unpaid leave,” he lamented.

He added that once the virus subsides, his business may not be the same and he might have to transform the business model completely. In many developed countries, the government is paying businesses to retain staff but here in Pakistan, the government is offering a loan, he pointed out.

He voiced fear that he may not be able to repay the loan if he availed it and stressed that unless the government extended grants to retain staff, businesses would be left with no option but to lay off workers because revenue had fallen drastically.

Roadside cafes

While restaurants managed to deliver food when the restrictions were eased, roadside cafes (Dhabas) had to change their entire menus.

Speaking to The Express Tribune, Social Hub partner Zeshan Ansari said despite the resumption of deliveries, sales of the business had dipped substantially.

“The response is not good, particularly because it is a Dhaba and people mostly enjoy our food with the environment we offer,” he added.

Talking about how long his cafe will take to recover the losses, he emphasised that it depended on the reaction of public after the pandemic is over.

Home-based food business

While restaurants are suffering the aftermath of the lockdown, home-based food businesses are also bearing the brunt of Covid-19.

“There is a drastic difference in the number of orders we receive now versus what we used to receive before the spread of the virus,” said Kitchen 212 owner Najma Israr. People are becoming increasingly cautious and most of them are preferring homemade food over delivered items, she said.

Speaking about the five-hour duration allowed for the delivery services to operate, she said the narrow window of time had definitely brought a difference in the number of orders. “Before the lockdown, we were available for 10 hours a day but now it is just five hours. If time is increased, we may have a few more orders.”

Industry response

Keeping in view the problems faced by the restaurants and bakeries, the All Pakistan Restaurant Association (APRA) appealed to the government to allow takeaways and deliveries from 4pm to 5am because the current five-hour window is insufficient.

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Talking to The Express Tribune, APRA Convener Athar Chawla said it was a misconception that Ramazan was the prime time for food business. “Instead, it is the period marked by lowest sales every year.”

With dine-ins closed and just delivery services functioning for limited hours, it has become tough for restaurant owners to earn because in Ramazan deliveries usually took place during the period between Taraweeh prayers and Sehri, he added. Shedding light on the crisis which has engulfed the food industry, the representative said restaurant sales have dropped 90%. If they were receiving 100 orders previously, they are now receiving only 10 orders.

“The most affected ones are the waiters who worked on daily wages and a major chunk of their income came from tips,” Chawla highlighted. “We support the Sindh government’s decision and we request that delivery services should be allowed to operate at least till Sehri.” 

Published in The Express Tribune, May 14th, 2020.

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