How India's restaurant industry can bounce back after the Covid crash

Parul Kaul
Parul KaulJan 12, 2021 | 17:03

How India's restaurant industry can bounce back after the Covid crash

It looks like we are on the right track to revive and reclaim to return to activities that enrich our lives in 2021.

India's the third-largest service industry — almost wiped out during the initial phase of the pandemic — that is all set to make a comeback in 2021. Nearly 40 per cent of restaurants had to shut shop due to the Covid-19 outbreak last year. 2020 was harsher on some businesses but restaurateurs persisted and survived. 

The worst is over and with the advent of the vaccine drive from January 16, or the flattening of the curve, the customer sentiment also seems to be coming back. Revenge purchases have been visible in many industries and with the new work-from-home scenario, a lot of young jobbers have moved back to their hometowns, making Tier-B towns the upcoming favourite for opening new restaurants and for the existing ones to up their safety and food standards.

main_restaurant-sing_011221031926.jpgNearly 40 per cent of restaurants had to shut shop due to the Covid-19 outbreak last year. (Photo: Reuters)

Restaurants are now running at almost 100 per cent capacity and the business is back to around 70 per cent of pre-Covid levels as per aggregators. It’s clear that people are feeling the loss of socialising and hence are willing to trust their favourite restaurants to meet their friends and family. With the easing of travel restrictions, the hospitality industry is also investing heavily in digital-first initiatives to reach out to consumers and build trust and confidence with innovative offerings like staycations, all-inclusive packages, contactless dining, sustainable and local meals to get sales back to pre-Covid levels. There is also a surge in the number of restaurants adopting contactless menus and accepting digital payments.

2020 saw the advent of cloud kitchens, delivery, and home chefs taking the market by storm, and this year will be around restaurants learning from these trends and looking to build niche experiences to drive customer loyalty. The discount-first approach of the Indian consumer might also shift to a consumer-first push as the unpredictability of the lockdown has taught us to value finer things and create memorable experiences. 

Overall, business is not going to bounce back immediately, and not for all restaurants at the same time. Those that were doing average numbers before the pandemic should re-evaluate their business model and ask themselves whether it makes sense to prolong the agony hoping that things might turn around. 

Restaurants are working on reduced seating capacities, are spending a lot more on cleaning materials, and employing extra staff to take care of the enhanced hygiene needs of customers. The additional cost will come on the diners to help them sustain their business. 

Needless to say, the Indian consumer will have to shift their behaviour of trying new experiences at a discounted rate to driving brand advocacy and to help their favourite hangout places survive.

Restaurateurs are even trying to innovate in their menu offerings by curating experiences on a plate. ‘Immunity elixir’ is another rage that the new age mixologists are banking upon and not leaving any stone unturned to curate healthy cocktails using fresh raw turmeric, ginger, or even chefs creating a new menu to provide nourishing food based on seasonal local produce to induce the consumer. 

‘Farm to table’ which was mostly a fad in the industry is now being taken seriously by young entrepreneurs who are supporting locally grown produce at better prices, which is good both for the environment and the end consumer. 

The new year surely looks like we are on the right track to revive and reclaim and to return to activities that enrich our lives. 

I am very hopeful that 2021 will be about embracing the new normal, learning from our past with mindful consumption, supporting local brands, and investing in sustainable and responsible dining practices to create fonder food memories and a brighter future. 

Last updated: January 13, 2021 | 16:40
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