By the time you read this, it would have been almost three weeks since the WHO declared the coronavirus outbreak as a pandemic. Today the virus has spread across the globe, not just affecting the health of people, but also disrupting industries, economies and financial markets around the world.
An industry that is especially hit by the coronavirus novel is the food & beverage industry. With strict quarantine enforced in most countries, restaurants have experienced huge losses as there is a drop in customer traffic. Many countries have even ordered direct closures of restaurants and bars to prevent the outbreak from spreading - dealing a further blow to such businesses. And in this backdrop of falling footfalls, and in turn, revenues many restaurant owners are struggling to meet their expenses.
This is not even considering the growing concerns regarding complete border closures, which could drastically impact the availability of ingredients. Another huge impact is on the livelihood of the multitudes who work in the service industry and are now - effectively - unemployed until the scenario improves.
Now obviously there are restaurants and restaurant owners out there who are doing everything in their power to provide for their employees in such uncertain times. However, most restaurants are used to working on cashflow and credit terms that usually extend to days or maybe even weeks.
But as this becomes a sustained problem they are going to have some tough decisions to make. Some restaurants are dealing with the crisis by completely flipping their business model - becoming a strictly drive-through and/or delivery service.
A good work-around? Maybe.
Sustainable? Definitely not.
And it’s not just small restaurants that are facing the very real possibility of having to pull down the shutter for good. Andrew Carmelli’s New York City restaurant empire took 30 years to build. Today the shutter is down. And all but 100 of his 1500 strong workforce has been laid off. Not forever, definitely. But for how long? Now one knows.
In the best of times, running a restaurant anywhere in the world, especially in one of the bigger cities like Dubai, New York or London, is fraught with its own perils. High rents, low margins and an ever-growing pool of competition create a spectre of terror that is always breathing down the necks of restaurant owners. But with the coronavirus pandemic, we are all in uncharted territory.
Right now, there is no telling when the virus will recede and businesses will get back up and running. Some may never.
If you asked me, I would say a possible avenue to help the restaurant industry come out of this bruised, but not battered, is if various governments provide some fiscal support to the industry and its workers. Individuals can also help out their local establishments as well by ordering takeout or delivery wherever such services are offered.
While we are still far from hitting rock bottom, the impact of the coronavirus pandemic has already sent shockwaves through the restaurant industry. It remains to be seen how various governments and people react to the crisis and its effect to the restaurant, and other industries.
Until then, I’m going to practice social distancing, wash my hands regularly and look at the one great positive - I get to spend quality time with family, read a book and have the luxury of staying at home.
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