Impact of Covid-19 on restaurants and food delivery in India
I have not seen a situation like this before in my entire life when each and every restaurant, food joint or hotel was closed in the country for more than 2 months. Some restaurants which never stopped serving their customers since their opening was bound to shut their business for this period. COVID-19 has affected India’s restaurant industry so adversely that many of them have been shut down forever.
According to India’s National Food Services Report of 2019, the country’s catering industry employs around 7.3 million people. Only more than half of them operate the 6,00,000 restaurants and eateries that are part of the sector which was organised. These are structures that offer fixed employment opportunities for the most part. In total, according to the same report, there are about 20,00,000 restaurants in the country. It was estimated that during 2018–2019, their sales amounted to 4,233,865 crores.
The sector has expanded vigorously in recent years, recording a compound annual growth rate of 11% between 2015-16 and 2018-19. In the same period, calculated in the same way, the workforce grew by 8 per cent a year. Over the next few years, it is projected to increase by about six per cent annually to reach 9.2 million in 2022-23. Meanwhile, the size of the industry market, according to the NRAI report, is expected to grow to Rs 5.99,784 crores over the next three years.
All these figures were projected before the pandemic and now since the pandemic has brought the restaurant industry to its knees, it looks impossible for the sector to continue with the same growth rate. According to a survey, almost 60% of the restaurants in India were having chefs and workers that belonged to other cities or regions. This had a great impact on the reopening of the restaurants as there was ease in lockdown by the Indian government as there were many safety norms issued by the government and travelling across the borders was very difficult because of the disease. Therefore these workers were stuck at home and it took them a long time to come back and start their restaurants they were working with.
Due to this impact of a pandemic on restaurants, this impacted food delivery services as well. This impact was more of a positive one if we compare it with dining in a restaurant. As the restaurants were not allowed to open their dining area, they were still permitted to deliver food. This helped food delivery startups to still operate during this hard time and also gave them an opportunity for new market offerings. A lot of opportunities like groceries delivery, packaged food delivery etc opened for them.
If we talk about one of the food delivery giants Swiggy, it partnered with MTR to offer breakfast mixes and ready to eat Indian dishes to the people. The companies them started to offer contactless and safe delivery options which allowed people to rely on these delivery apps and use them, even for those who have never used them before. People who were locked in their houses for months found this as a relief and business continued.
Since COVID happened in India there are many restaurants which were shut down permanently and on the other hand, it boosted cloud kitchen business. There was a two-way impact on the food industry and as soon as a vaccine comes, it will take no time to recover and grow at a good pace.
By- Siddharth Agarwal