KUALA LUMPUR: Many restaurants across the country are on the brink, unsure whether they will be able to survive any longer.
This follows the ban on dinners, applied since the start of phase 1 of the national stimulus plan on June 1, which will continue until cases of Covid-19 fall below 4,000 per day.
This lockdown has been particularly brutal for restaurants, as consumers cautious of the pandemic have been very careful about their spending, resulting in paltry deliveries and take-out for many restaurants.
“During the first MCO, people may have been in a better financial situation, but by the start of the second year, consumers are more careful with their ringgit and certainly spend less on restaurant meals,” said Renyi Chin. , co-founder. of the Malaysian F&B Operators Alliance, which has over 1,200 member restaurants.
Tan San Eu, the co-owner of Pun’s restaurant, said sales have diminished the lockdown so much that he’s decided to shut down his one-year restaurant for good.
“The third week of the lockdown was when things got really bad. My partner and I sat for six straight hours in the restaurant without any orders. That’s when we knew that we had to bite the bullet and go out of business, ”he said. .
Even for the more established restaurants, sales have been mediocre at best. Many restaurants make do with delivery and take-out which represent between 10% and 30% of regular income.
“It’s very, very bad, because there is no restaurant. I don’t know why people think that because restaurants have delivery as a source of income, everything is fine,” says Navin Karu, the owner of popular local restaurants like Vin’s. and Manja KL.
“The truth is that even with the delivery my turnover is down 90%. My overhead for two companies is over RM 100,000 and I only get 10% of the deliveries so the losses accumulate, ”he says.
Joshua Liew, the founder of the Espressolab coffee chain, said things were so terrible for his business that he is now making less than RM100 a day in take-out sales.
Restaurants that rely on food delivery platforms also have the added headache of having to generate more sales to meet the commission charged by these platforms, which can be as high as 30%.
“If you normally break even at 40,000 RM for example, you will need to earn at least 55,000 RM to break even using food delivery platforms, due to the commission charged,” explains Chin.
Restaurateurs say things would be slightly easier if the Socso wage subsidy for staff was increased and hiring was removed or subsidized during this time, as both represent their two biggest fixed costs.
“Hiring is a killer and things are so dire in the industry that we need more than the existing government wage subsidies to help us get through this foreclosure,” Liew said.
As it stands, Chin says things have gotten so bad that many restaurant owners have resorted to borrowing from friends and family as their cash reserves have run dry.
Liew adds that in terms of moratoriums on loan repayments, some foreign banks have not been helpful.
“I’m two months behind on a business loan and threatened with legal action. I asked for a moratorium, but was told I wasn’t entitled to it because F&B is an essential service for this period, ”explains Liew.
This recipe for disaster has led many restaurant owners to choose to call it a day.
Lee Yew Kheong, for example, suffered losses of 100,000 RM at each of his popular restaurants – The Red Beanbag, Yellow Brick Road and Wizards during the first MCO last year.
He’s still trying to get those numbers back and has since decided to shut down one of his restaurants, Wizards, this month.
Now he’s wondering if he should just cut his losses and get out of the restaurant business altogether.
“I actually think this lockdown will be the last nail in the coffin of many restaurants. You will see many restaurants close and the rest barely surviving.
“For now, we’re just hoping that dining will be allowed soon. However, if this lockdown continues for much longer, some people like me will probably think it’s no longer worth running restaurants,” he said. declared.