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Impact of COVID-19 Pandemic on Indian Restaurant Industry

The problems faced by the hospitality and gastronomy industries as a whole are unlike anything we've seen since the inception of fine dining or the modern restaurant industry.

Chindu Chandran, Research Scholar, University School of Environment Management, Guru Gobind Singh Indraprastha University, India.


COVID- 19 pandemic has hit various industrial sectors such as tourism and hospitality, food processing, education, fashion and apparel, leather, and other retail industries. This pandemic has wreaked havoc on the restaurant business across the country. This industry relies on human connection and gatherings, thus vulnerable to pandemic emergencies. The problems faced by the hospitality and gastronomy industries as a whole are unlike anything we've seen since the inception of fine dining or the modern restaurant industry. Almost every country, state, and local government has enacted physical distancing regulations, prohibiting restaurants from offering dine-in services and instead permitting only takeout and delivery orders. While these intervention measures have reduced personal touch and slowed the transmission of the virus, they have put the restaurant industry's sustainability in jeopardy. Due to financial hardship caused by the loss of dine-in customers, many small restaurant businesses were forced to close. Cost-cutting strategies appear to be insufficient to keep the industry afloat. To mitigate the effects, restaurant corporations and owners used off-premise methods such as drive-thru and food delivery. However, these service methods gave fast-food businesses an advantage because they already had the digital infrastructure and drive-thru windows; full-service restaurants, on the other hand, were unable to adjust to the change swiftly and, as a result, took the worst financial blow.


The restaurant industry in India is one of the top three service industries globally (after retail and insurance). There are two segments of the Indian foodservice market, i.e., organized and unorganized segment. The unorganized segment accounts for 86% of all firms, whereas the organized restaurant segment accounts for only 14%. According to the National Restaurant Association of India (NRAI), the restaurant industry is one of the main aspects of the Indian service sector, accounting for around 3% of India's GDP and employing 7.3 million people. India's $50 billion restaurant industry is expected to lose $9 billion in 2020, with over 2 million people risking job losses and one out of every four businesses unlikely to reopen. (NRAI, 2020).

The second wave of the pandemic impacted India considerably severely than the first, which disrupted this slow recovery in early 2021. Most fine dining establishments have changed their focus from in-restaurant dining to delivery services. In the long run, this will radically change the landscape of the country's delivery industries. Curating a superior experience across the board, from sanitation and safety to packing and customer-centric content, will usher in a new age of food delivery. The sheer diversity of varieties and flavors at inexpensive rates has made India and its people famous for their love of street cuisine. However, after the pandemic, when hygiene has been a top priority, street food has quickly fallen to the bottom of the list of most disliked dining options. Even when the pandemic will be over, this pattern is likely to influence the sector for months. In the organized sectors, the market is expected to increase gourmet street food companies to meet customer standards for flavor, hygiene, and delivery convenience. In recent years, the food delivery industry has accelerated, transformed, and modernized across the country. Each year, the sector employs millions of people, with the workforce shifting from waiters at sit-down restaurants to delivery drivers. More restaurants are joining food delivery services, opening delivery-only ghost kitchens, or adjusting their menus to meet the needs of their home-cooking-tired clients. Despite this, high operating costs posed a significant hurdle for eateries, preventing many from launching.

Survival strategy in the new normal

"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."  According to a famous quote by Charles Darwin, adaptability is required, and the restaurant sector is attempting to adapt with new inventions and methods. Some businesses are ready to reopen the outlet with Covid 19 protocols to overcome hurdles and achieve profitability. In order to earn client confidence and increase income, the industry introduced new service offerings keeping in mind Covid hygiene measures. These strategies will pose a significant financial burden for restaurant operators, such as rent, loan interest, staff salaries, etc. have to be covered. Some of the covid protocols adopted by them are social distancing by creating more aisle space, reduced seats per table, contactless doors, self-parking by guests, body temperature checks, use of personal protection kits by staff and guests, and use of QR coded menu for contactless ordering and payment of bills through digital payment platforms. Despite their reservations about packaged meals and doorstep delivery in the past, Fine dining restaurants have embraced takeaway and sales through aggregators for doorstep delivery. However, with customers feeling safer within the four walls of their homes and, at best, in their cars to avoid social contact, the fine dining restaurant management has adapted and marketed this feature. Restaurant owners have also encouraged outdoor catering so that clients can dine in the safety of their establishments, with chefs providing the same dining experience at the customer's preferred location. The Coronavirus strain, responsible for the pandemic, is highly virulent, spreads through contact points. As a result, sanitization of the kitchen and pantry, which includes the food collection and dishwashing areas, is a top priority to protect the clients' safety. The back areas are sanitized at the end of each shift. This is a time-consuming and costly operation. Interest in home cooking has soared as people spend more time at home and are discouraged from going out to eat. Restaurants are even attempting to innovate by putting experiences on a plate as part of their new menu offerings. Another craze that new age mixologists are banking on is the term "immunity elixir," and they're not leaving any stone unturned to create healthy cocktails using fresh raw turmeric, ginger, etc. Even chefs are trying to create a new menu to provide nourishing food based on seasonal local produce to entice customers. 'Farm to table,' which mainly was a craze in the industry to attract customers, is now taken seriously by young entrepreneurs supporting locally grown fresh produce at better prices, which is good for both environment and consumer. These measures being assumed as an adaptation to provide a hygienic and worthwhile dining experience are sure to continue in the future, paving the way for a new normal.

Copyright images: Chindu Chandran.


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