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Dhaka Tribune

‘The restaurant industry is on the brink of collapse’

The industry has been reeling from two lockdowns during peak sales season

Update : 04 May 2021, 08:53 PM

Bangladesh's burgeoning restaurant industry that employs thousands is struggling to survive after two lockdowns were imposed during their peak sales season.

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

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

But sales once again plunged down to more than 50%, compared to normal times, after the surge of infection cases and Covid-related deaths in the country.

There are currently about 60,000 restaurants across the country, with more than 8,000 in the capital alone. Close to 2.8 million people are dependent on the restaurant industry for their livelihoods, while the number is several times higher if it includes the supportive sectors.

Trouble began after the outbreak of Covid-19 last year. A number of restaurants began letting go of staff while many sold off their business. Some were unable to survive and closed shop entirely.

Syed Mohammad Andalib, organizing secretary of Bangladesh Restaurant Owners Association (BROA), said that the restaurant sector was once a booming “but it is now on the brink of collapse. All sectors are getting support from the government in various ways like incentives, loans on low interest, and easy terms amid the pandemic. But no attention has been paid to the restaurant sector yet,” who owns Baburchi Restaurant and Tri State Eatery, the biggest digital food court.

Imran Hassan, general secretary of BROA, said that nearly 25-30% of the restaurant have closed permanently after the first wave, 50% ownerships were transferred as their original owners could not survive.

“Restaurants suffered a fresh shock after the declaration of strict lockdown from April 14, the first day of Ramadan as Iftar parties and Iftar-based sales plummeted,” said Hassan, adding: “Because dine-in services have been closed, it has been difficult to pay for utilities, shop rent, payments of the employees ahead of Eid-ul-Fitr only through sales from takeouts.”

Ashiqur Rahman Ayat, owner of Platted restaurant at Old Dhaka's Lalbagh area, said that he had to let go of a considerable number of his employees from his restaurant, from 15 to 3, to meet the expenses.

There is next to nothing in 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, wages, etc. A restaurant like mine costs around Tk1-1.2 lakh for rent and utility bills per month,” he said.

"Although sales are down, value-added tax (VAT) has not waived for us. Its like pouring salt to a wound. We ask they let us open dine-in services in compliance with the health directive.”

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

Publicity secretary of BROA, Ashfaq Rahman Asif, restaurateur and owner of Tarka, a popular Indian restaurant at Banani area, said: “We are surviving on a delivery and takeaway system, but it is not been beneficial for us. About 85-90% of the guests of a restaurant dine-in and 10-15% order takeaway. Food delivery doubled to 20-25% as there is no opportunity for dining in, but we have lost 75-80% of our guests. ”

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

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

A similar scenario was seen while talking with owners of the restaurants across the capital like Pinewood Café, Tradition BD, Sajna, Steak House, Fakhruddin Biriyani and others.

An employee of Dhaka Fried Chicken, in Dhanmondi area, said that he was worried about his job even though the restaurant was open.

Seeking anonymity, he also said that although his wages were regular, he was anxious how long it would last as the number of orders had significantly reduced in the past few weeks.

Also Read -  Restaurants owners demand 10,000C in budget allocation

“The owner already let go of some staff. They went back to their villages to sell vegetables and fruits while others now sell masks and hand sanitizers in Dhaka,” he said fearfully, that this too might be his fate.

Syed Mohammad Andalib, organizing secretary BROA also said: “Although we have fulfilled all the conditions of being an industry, this sector has not yet been recognized. That is why we do not get any bank loan, as the central bank labeled us as a perishable sector,” explaining why they cannot avail SME loans.

“We have repeatedly appealed to the government for incentives. I have heard that many of the funds allocated in the SME sector have been unused. We want this booming sector to be given soft loans from there, and incentives for our staff,” said Andalib.

Asking about whether restaurants are eligible to get loans from SME Foundation or not, Rashedul Karim Munna, director of SME Foundation, said that although restaurants should be part of the SME sector by definition, it has not been integrated in Bangladesh yet.

“We are trying to expand this sector. Funding is low here, which could also be a factor. However, restaurant owners’ association and the foundation can reach a decision by discussing,” he added.

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