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Many eateries shut during COVID lockdown, 24 lakh jobs lost: Report

Location-wise, Delhi and Mumbai were the worst-hit while Bengaluru and Kerala also witnessed closure of several eateries, including popular ones.

Published: 27th October 2021 03:04 AM  |   Last Updated: 27th October 2021 08:19 AM   |  A+A-

Restaurants

For representational purposes (Photo | EPS)

By Express News Service

NEW DELHI:  Stringent Covid curbs, exacerbated by protracted lockdowns, broke the backbone of India’s food services industry in FY21 with a quarter of the restaurants closing down which in turn rendered an estimated 24 lakh people jobless, says a new report.

The impact was such that the industry size shrank by more than half in one year flat, says the National Restaurant Association of India (NRAI), which represents the interests of five lakh restaurants. 

In FY21, the size of the food services industry in India shrank by 53% to Rs 2 lakh crore from Rs 4.23 lakh crore a year ago, says NRAI’s latest report titled Covid impact on the food services industry 2021. 

Location-wise, Delhi and Mumbai were the worst-hit while Bengaluru and Kerala also witnessed closure of several eateries, including popular ones.

“Food business outlets in the country’s top two cities have been the most affected with Covid-19 affecting these two cities in a severe manner because of the population density and economic activity,” says the report.

According to NRAI, food service has been one of the worst-hit businesses worldwide and India is no exception. Within the industry, the worst affected were small operators in the unorganised sector.

“Due to hygiene and safety issues as well as lack of working capital, small businesses suffered,” notes the report. 

While dine-in services took a hit, the share of deliveries and takeaways for restaurant players increased on an average from 13% during the pre-Covid times to 33% now.

The average order value, too, rose by 43%. 

NRAI is hopeful that the industry, one of the major job creators employing around 73 lakh people, will recover as most Covid restrictions have been eased.

It pegs the market size to touch Rs 4.72 lakh crore in FY22, adding that in a normal fiscal, the size would be Rs 5.5 lakh crore.

The road ahead, however, is likely to be bumpy as the average revenue after the second Covid wave is just 72% and profitability at 54% of pre-Covid times. 

FOOD FOR THOUGHT

  • Food services industry shrank 53% in FY21 to Rs 2 lakh crore from Rs 4.2 lakh crore in FY20.
  • 25% of India’s restaurants permanently closed down owing to Covid distress.
  • 24 lakh people lost jobs in FY21.
  • Expensens shot up in post-Covid era due to higher spending on hygiene and safety measures.


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