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COVID-19 impact: Around 40% of restaurants may not reopen again

Presently only around 17 per cent of the dining out restaurants are open for business, while another 43 per cent are likely to begin operating once the situation becomes conducive, according to a survey conducted by Zomato

twitter-logoBusinessToday.In | August 20, 2020 | Updated 11:41 IST
COVID-19 impact: Around 40% of restaurants may not reopen again
Zomato undertook the survey in the past few days after it reached out to thousands of restaurants and customers across several cities in India

Around 40 per cent of restaurants may shut down permanently due to the disruption caused by the COVID-19 pandemic. The dining out eateries, which have been affected the most, may not reopen again even as the food delivery industry has restored order to some extent and would take some more months to return to pre-Covid levels.

Presently, only around 17 per cent of the dining out restaurants are open for business, while another 43 per cent are likely to begin operating once the situation becomes conducive, according to a survey conducted by Zomato.

Also Read: Coronavirus impact: Zomato reinstates salaries; aims to make complete recovery in 3-6 months

The report titled 'Indian Restaurant Industry-Mid COVID-19 report' showed that out of the cities where restaurants have been permitted to open for dining out, Kolkata is ahead of the pack with 29 per cent out of its overall eateries open. Hyderabad follows suit at 21 per cent.

The report further noted that around 60 per cent of restaurants said they presume to "retain less than half of their business volumes for a few months even in the post-Covid phase."

Albeit, the situation looks a lot better for the food delivery segment, which according to the report has "largely recovered" with the overall sector logging nearly 75-80 per cent of the pre-Covid gross merchandise value (GMV).

It further enunciated that "some areas in some cities are clocking higher GMV than before as affluent neighbourhoods no longer fear contagion from food delivery, and are combining home entertainment with outside food."

Also Read: Coronavirus impact: What the future holds for battered restaurant industry

The report also showed that one in every five Zomato users in metros (pre-Covid) opened the app from a smaller town in the wake of mass exodus of people from metros to other cities across the country. Terming the recovery trends in the food delivery space as strong, Zomato estimated the segment to reach pre-Covid levels of business in the next two-three months.

The restaurant aggregator said that it has clocked 70 million food delivery orders since the countrywide lockdown that started on March 25.

Zomato undertook the survey in the past few days after it reached out to thousands of restaurants and customers across several cities in the country to understand the present situation and future prospects of the industry.

The company, however, did not divulge the number of restaurants and customers who participated in the survey.

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