Analysis of Covid impact on Restaurant- Pre & Post Lockdown

One of the hardest hit industries due to the Coronavirus pandemic is the restaurants and hospitality sector. Being the industry, which employs the second highest human capital in India after the agricultural sector, it has been completely shut down and has highly affected both its owners and employees.




In this article, following topics would be discuss

  1. What is the impact of Covid-19 lockdown on restaurants & hotels

  2. The post-lockdown effect on food and beverage industry

  3. Larger effect on food supply chain due to Covid

  4. Action to be taken by the restaurant

  5. Measures to be taken by the government to fight against Covid

1.What is the impact of Covid-19 lockdown on restaurants & hotels

As the world is going through a huge economic downfall, hotels and restaurants have remained closed. Restaurant businesses run mostly on cash flow and like other business sectors, there are no set aside cash. This shutdown of bars and restaurants worldwide has been a nightmare to millions of people dependent on it

● Indian food industry employs over 7 million people and many of them are laid off or have to work on pay cuts

● Loss incurred due to fixed cost cannot be recovered even after the lockdown is withdrawn

● Effect on national GDP and entire food supply chain will pertain for a long time

Many restaurants are still running on only delivery but this brings fixed costs like rent and electricity which can't be met by the least sales that they are running on.

2.The post-lockdown effect on food and beverage industry

Currently, as the whole nation is under lockdown, a lot of industries are experiencing loss. But even after the lockdown ends, restaurants would not be able to run normally as they used to.

● Customers will be cautious about the social distancing and safety

● Large dine-in restaurants will face downfall

● Restaurants will not be crowded as they used to, and this may affect its brand image

● Small fast food stalls will be shut down

● Employees will become unemployed or will have to work for lesser pay

The foot traffic in restaurants has reduced drastically. While there are sales in grocery stores and demand for in-home dining has risen, restaurants are working on only takeout systems. Restaurants with large dine-in capacity would not be to operate at full capacity in near initially times.

Amidst these issues some restaurants are having existential crises and are trying to survive in the market. Some businesses have already shut down during the lockdown to cutoff fixed costs.

3. Larger effect on food supply chain due to Covid

Due to the sudden shutdown of restaurants and beverage industries not only the people involved in the food processing sector but the entire food chain is disrupted.

Agriculturists and retailers are generating no revenue and also they have to incur loss of perishable products as the sales have completely declined.

4. Action to be taken by the restaurant against covid

Step 1: Cleanliness and social distancing are to be maintained even after the lockdown to get rid of Covid-19.

Step 2: All the restaurants will have to take proper safety measures before resuming the business so that consumers can be reassured to dine in a restaurant.

Step 3: They will have to introduce new working arrangements. Even though as soon as the lockdown ends, the food industry cannot revert back to ‘normal’, they should get used to the ‘new normal’.

5. Measures to be taken by the government to fight against COVID


Indian government is taking all necessary steps to tackle the Covid 19 pandemic. But for the food and hospitality sector which are incurring zero revenue, there has been no support. Being one of the biggest employment generators, the government needs to provide a stimulus package in support of all the employed in the food industry.

The world is experiencing huge economic downfall and people are suffering from sudden unemployment and no revenue from businesses at all. Even after the period of lockdown ends it will not be easy to go back to normal, especially for restaurant business. For other sectors, the loss incurred can be recovered at least to some level but for the agriculture and food sector an entire year's profit has been wiped out.

Conclusion:

This time is the hardest time for the restaurant due to Covid however there we can see the great future ahead for this industry and again this industry will boom after this covid situation.

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