and it ’s still early days covid-19 is crippling indian ... · footfall at its four...

3/17/2020 Coronavirus update: Malls, restaurants face the heat in India — Quartz India

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With more and more Indians avoiding crowded places as aprecaution against the coronavirus outbreak, the retail andrestaurant industries in India may be in for a nightmare.

Shopping malls in several parts of the country are alreadyseeing an up to 20% decline in footfall. In Chennai,Bengaluru, and Mumbai, state authorities have mandatedmalls to close altogether.

The top eight cities of India have 126 malls, according toAnarock Retail, a Gurugram-based real estate servicescompany. “The closure of malls and multiplexes…has

COLLATERAL DAMAGE

Covid-19 is crippling Indian restaurants and retailers—and it’s still early days

March 16, 2020

By Sangeeta TanwarI write about all things retail

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brought organised retail to a grinding halt. Even a short-term closure will have signi�cant �nancial implications onretailers,” Anuj Kejriwal, Anarock’s managing director andCEO, told Quartz.

At eateries, there has been a 40% fall in customers in thelast 15 days, according to the Federation of Hotel &Restaurant Associations of India (FHRAI). “This �gurecould go up to 80% with more coronavirus cases likely tobe reported in India,” said Gurbaxish Singh Kohli, vice-president of FHRAI.

Surviving amid slump

Some of India’s most favoured brands have fallen victim tothe coronavirus-triggered slowdown.

For instance, women’s fashion brand Forever New saidfootfall at its four outlets—SelectCity Walk (Delhi),Ambience Mall (Gurugram), DLF Mall of India (Noida), andDLF Promenade (Vasant Kunj)—has fallen 25% in the pastfour weeks.

Similarly, cricketer Sachin Tendulkar-backed indoorentertainment chain Smaaash’s revenue has fallen 35% inthe past one month. “The coronavirus outbreak has ledboth business and leisure guests to halt their outings andtravel,” said Jaydeep Ray, general manager, marketing,Smaaash.

At fast food chain KFC, sales have dropped 15-20%sequentially over the past couple of weeks, its Indiamanaging director Samir Menon, told the Economic Timeson March 10.

Ditto for 1441 Pizzeria, which runs stores in Mumbai, Pune,Bengaluru, and Ahmedabad. “Sales are falling daily. In the


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�rst two weeks of March, we have taken a hit of 20% ondine-in,” said Krishna Gupta, managing director, of thechain. “Holidays and festivals are traditionally a good time.This Holi, our sales dropped 30% year-on-year,” he added.

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Eateries in tourist cities have taken a hit also because ofthe government’s decision to suspend all visas till April 13.For instance, Beep, a popular rooftop eatery and bar inAgra has witnessed a 40% dip in sales in the �rst week ofMarch, according to Vinayak Gupta, chef and partner, BeepAgra.

“We expect the restaurant segment to take a hit of about25-30% in coming weeks with people working from home,lack of corporate clients, cancellation of banquets, andevents,” said Satish Meena, senior forecast analyst,Forrester.

Containing the damage

Stakeholders in restaurant and retail business are takingmeasures to minimise damage caused by the deadlycoronavirus outbreak.

Forever New is focusing on online sales in a bid to make upfor revenue losses in its brick-and-mortar stores.

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Meanwhile, FHRAI is hoping to get patrons to step out byassuring them of their safety. “We have asked all ourrestaurant members to remain vigilant. Staff acrossrestaurants is being trained to safely handle customers byfollowing hygiene routine being promoted by thegovernment. People in the industry are also being trainedto calm down customers and encourage them not to spreadrumours,” said Kohli.

Also, restaurants individually, too, are �ghting Covid-19threat.

“Each crew member at our place has been designated witha speci�c task to keep all raw materials, cutlery, crockery,furniture etc sanitised,” said Gupta of Beep.

Smaaash is using thermal heat temperature guns tomeasure customers’ body temperature. It is also sanitisingall contact points inside its kitchen and bar area.

Painful recovery

Even so, both the F&B and retail industries will take timeto recover and have to make some tough calls to containlosses, say industry players and analysts.

“With the spread of coronavirus, the sales and footfall willcontinue to see a downward slide for at least eight to 12more weeks. We expect resurgence only in late 2020,” saidDhruv Bogra, country manager of Forever New.

Meanwhile, Mumbai-based Care Ratings says industrystakeholders must make some tough decisions.

“With declining sales, players will have to control their�xed expenditure such as employee cost, power, andrentals. As a �rst step towards this, malls and restaurants





could reconsider their operational hours to minimise theimpact of falling footfall and lower sales,” said DarshiniKansara, deputy manager, industry research, Care Ratings.



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