“The restaurant industry is on the verge of collapse”
People buy various food items for Iftar at Star Hotel and Kabab restaurant in the capital’s Banani region during the month of Ramadan
Mehedi Hasan / Dhaka Tribune
Industry shocked by two lockdowns during peak sales season
Bangladesh’s booming restaurant industry, which employs thousands of people, is struggling to survive after two closings were imposed during peak sales season.
Industry insiders said they had almost regained their balance before this lockdown, but the ongoing directive to keep all restaurant services closed has diminished that gain.
The Bangladesh Restaurant Owners Association (BROA) said restaurants have recovered nearly 60 to 70 percent since reopening last July.
But sales have plunged again by more than 50%, compared to normal times, after the surge in Covid-related cases of infection and deaths in the country.
There are currently around 60,000 restaurants across the country, including more than 8,000 in the capital alone. Almost 2.8 million people depend on the restaurant industry for their livelihoods, while this number is several times higher if the support sectors are included.
The problems started after the Covid-19 outbreak last year. A number of restaurants have started to lay off staff while many have sold their businesses. Some were unable to survive and closed 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. All sectors are receiving government support in various ways, such as incentives, low-interest loans, and easy terms amid the pandemic. But no attention has yet been paid to the food service industry, ”which owns Baburchi Restaurant and Tri State Eatery, the world’s largest digital food court.
Imran Hassan, general secretary of BROA, said that around 25-30% of the restaurant closed permanently after the first wave, 50% of the properties were transferred because their original owners could not survive.
“Restaurants have suffered yet another shock after a strict lockdown was declared from April 14, the first day of Ramadan, as Iftar celebrations and Iftar-based sales plummeted,” said Hassan, adding: “Because the catering services were closed, it was difficult to pay for utilities, store rent, employee payments before Eid-ul-Fitr only through take-out sales. .
Ashiqur Rahman Ayat, owner of the Platted restaurant in the Lalbagh district of Old Dhaka, said he had to lay off a considerable number of his restaurant workers, from 15 to 3, to meet expenses.
There is almost nothing in the sales, said Ayat, whose restaurant faces Lalbagh Fort, adding that sometimes there are no sales for 3/4 consecutive days.
“But even then we have to pay the utility bills, rent, wages, etc. A restaurant like mine costs around Tk 1 to 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 ask that they allow us to open up services. catering in accordance with the health directive. “
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BROA Advertising Secretary Ashfaq Rahman Asif, restaurateur and owner of Tarka, a popular Indian restaurant in the Banani region, said, “We are surviving on a delivery and take-out system, but that does not help us. was not beneficial. About 85-90% of restaurant patrons dine there and 10-15% order take-out. Food delivery has doubled to 20-25% as there is no option to dine on site, but we have lost 75-80% of our guests. “
“We don’t understand exactly how we can sustain the business with that 20-25% sales. Although we have lost 80% of our 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 his business had almost halved due to the second wave of the ongoing pandemic.
A similar scenario was seen in discussions with owners of restaurants in the capital like Pinewood Café, Tradition BD, Sajna, Steak House, Fakhruddin Biriyani and others.
An employee of 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 is regular, he wondered how long this would last as the number of orders had dropped significantly in recent weeks.
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“The owner has already laid off some staff. They returned to their villages to sell vegetables and fruits while others are now selling masks and hand sanitizers in Dhaka, ”he said with fear, that this could also be his fate.
Syed Mohammad Andalib, Organizing Secretary of BROA also said: “Although we have fulfilled all the conditions to be an industry, this sector has not yet been recognized. This is why we do not get any bank loans, because the central bank has called us a perishable sector, ”explaining why they cannot benefit from loans to SMEs.
“We have repeatedly asked 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 from there and incentives for our staff, ”Andalib said.
Asking whether or not restaurants are eligible for SME Foundation loans, Rashedul Karim Munna, Director of the SME Foundation, said that although restaurants should be part of the SME sector by definition, he did not yet integrated in Bangladesh.
“We are trying to develop this sector. Funding is low here, which could also be a factor. However, the association of restaurateurs and the foundation can make a decision by discussing, ”he added.