“The restaurant industry is on the verge of collapse”

People buy various food items for Iftar at the Star Hotel and Kabab restaurant in the Banani area of ​​the capital during the month of Ramadan
Mehedi Hasan/Dhaka Tribune

The industry has been reeling from two closures during the peak sales season

Bangladesh’s booming restaurant industry, which employs thousands, is struggling to survive after two closures were imposed during their peak sales season.

Industry insiders said they had almost regained their footing before this lockdown, but the ongoing directive to keep all catering services close by has diminished that gain.

The Bangladesh Restaurant Owners Association (BROA) said restaurants have recovered nearly 60-70% since reopening last July.

But sales plunged more than 50% again, compared to normal times, after Covid infections and deaths spiked in the country.

There are currently around 60,000 restaurants across the country, including more than 8,000 in the capital alone. Nearly 2.8 million people depend on the restaurant industry for their livelihoods, while the number is several times higher if it includes support sectors.

Trouble started after the Covid-19 outbreak last year. A number of restaurants have started laying off staff while many have sold their businesses. Some could not survive and closed up shop altogether.

Syed Mohammad Andalib, organizing secretary of the Bangladesh Restaurant Owners Association (BROA), said the restaurant industry was once booming “but now it is on the brink of collapse. “government support in various ways, such as incentives, low-interest loans and favorable terms amid the pandemic. But no attention has yet been given to the restaurant industry,” which owns Baburchi Restaurant and Tri State Eatery, the largest digital food court.

Imran Hassan, general secretary of BROA, said nearly 25-30% of restaurants closed permanently after the first wave, 50% of properties were transferred because their original owners could not survive.

“Restaurants have suffered another shock after a strict lockdown was declared from April 14, the first day of Ramadan, as Iftar parties and Iftar-based sales plummeted,” Hassan said, adding “Because catering services have been closed, it has been difficult to pay for utilities, store rent, employee payments before Eid-ul-Fitr only through take-out sales.

Ashiqur Rahman Ayat, owner of Platted restaurant in Old Dhaka’s Lalbagh district, said he had to lay off a huge number of his restaurant workers, from 15 to 3, to meet the expenses.

There is hardly any sales, said Ayat, whose restaurant faces Lalbagh Fort, adding that sometimes there are no sales for 3/4 days in a row.

“But even then we have to pay utility bills, rent, salaries, etc. A restaurant like mine costs around Tk 1-1.2 lakh for rent and utility bills per month” , did he declare.

“Although sales are down, Value Added Tax (VAT) has not been removed for us. It’s like pouring salt on a wound. We are asking them to let us open catering services in accordance to the health directive.

Read also – Covid-19: A long road to recovery for restaurants

BROA’s publicity secretary, Ashfaq Rahman Asif, restaurateur and owner of Tarka, a popular Indian restaurant in the Banani region, said: “We survive on a delivery and take-out system, but that doesn’t keep us going. was not beneficial. About 85-90% of restaurant customers dine in and 10-15% order take-out. Food delivery has doubled to 20-25% as there is no on-site dining option, but we have lost 75-80% of our customers. ”

“We don’t understand exactly how we can sustain the business with this 20-25% sales. Although we have lost 80% of sales, our overhead costs such as space rent, utility bills and employee salaries remain the same. Our survival has become a big challenge,” he also said.

Mir Akter Uddin Dulal, owner of Star Kabab, said their business had almost halved due to the ongoing second wave of the pandemic.

A similar scenario was observed in discussions with owners of restaurants in the capital such as Pinewood Café, Tradition BD, Sajna, Steak House, Fakhruddin Biriyani and others.

A worker at Dhaka Fried Chicken in the Dhanmondi area said he was worried about his job even though the restaurant was open.

Seeking anonymity, he also said that although his salary was steady, he was worried about how long it would last, as the number of orders had dropped significantly in recent weeks.

Also Read – Restaurant Owners Demand C10,000 Budget Allocation

“The owner has already laid off staff. They have returned to their villages to sell vegetables and fruits while others are now selling face masks and hand sanitizers in Dhaka,” he said fearfully that too could be his fate.

Syed Mohammad Andalib, Organizing Secretary of BROA also said, “Although we have met all the requirements to be an industry, this sector has not yet been recognized. That’s why we don’t get any bank loans because the central bank has called us a perishable sector,” explaining why they can’t get SME loans.

“We have repeatedly appealed to the government for incentives. I have heard that many of the funds allocated to the SME sector have not been used. We want this booming sector to receive soft loans and incentives for our staff,” Andalib said.

Asking whether or not restaurants are eligible for loans from the SME Foundation, Rashedul Karim Munna, Director of the SME Foundation, said that while restaurants should be part of the SME sector by definition, it does not has not yet been integrated into Bangladesh.

“We are trying to develop this sector. Funding is low here, which could also be a factor. However, the restaurant association and the foundation can make a decision by discussion,” he added.

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Cecil N. Messick