Author’s Blurb: After seeing a whole lot of articles surrounding the impact of the lockdown and its adverse effects on the tourism industry, I got to thinking about the F&B industry as well.
News of the lockdown came down hard on restaurants and eateries across the country, with strict regulations against patrons dining in.
According to the National Security Council, such locations are still allowed to operate, but only to fulfil takeaway orders or deliveries.
All of this is expected to be reinforced until the end of the month. But then again, are we honestly confident about the partial lockdown only lasting until then?
We can’t say for sure that we’ll be able to contain COVID-19’s spread in only 2 weeks.
So, what does this spell for restaurants and eateries everywhere?
To see what’s going on behind the scenes, I talked to the founders of MyeongDong Topokki (Vincent Lua), Madhatter Desserts (Marcus Low), Strangers at 47 (Sean Ooi), myBurgerLab (RenYi) and EPIC Food Hall (Wick Kee).
The Situation Is Different For Each Business
Yes, there’s no denying that physical footfall will suffer. But Vincent Lua, CEO of MyeongDong Topokki isn’t concerned that the consequences will be drastically negative.
“Since then we are a fast-casual concept restaurant that is more likely to be focused on the delivery format, (unlike BBQ or casual dining), our delivery orders still remain strong.”
Sean of Strangers at 47 had hoped that help will come from the government, but to no avail so far.
“We were hoping that the stimulus packages by the government were also directed to F&B businesses like ours but sadly, there are no current measures to assist F&B businesses.”
On the other hand, Wick Kee, who founded EPIC Food Hall (previously known as EPIC Fit Meals Co.) shed light on a different side of the story.
“Frankly speaking, we are experiencing the opposite. We face the problem of managing the heavy surge in orders and ensuring prompt deliveries,” he explained.
Wick Kee also mentioned that over these few weeks, he’s noticed an increase in adoption of food delivery by customers—some who’ve never even ordered before.
Dealing With Reduced Incomes And Other Woes
As dine-in operations come to a halt, I still had one burning question in mind.
Would this in any way affect the wages of waiters, waitresses and other members of service staff considering they might be seeing less foot traffic for the next 2 weeks?
RenYi told us that myBurgerLab (mBL) is looking to cushion the potential nasty effects by reducing and spreading out their work hours over the coming weeks.
“We have made a commitment to take care of the ground level team first and not have their pay affected in any way unless necessary.”
He also told us that he and his other heads of departments will be amongst the first people to take a 10-30% pay cut. “Our frontlines work the hardest and without them, we at HQ are nothing.”
While Sean echoed these sentiments, Wick Kee told us that EPIC Food Hall adopted a whole other approach altogether.
“To be completely honest, we are actively recruiting. We’re not undertaking any changes in managing employees besides enforcing stricter controls on personal hygiene and food handling.”
They are, however, looking to renegotiate rental terms with their landlords, mainly to offset their loss from stopping the dine-in part of their business.
As of last month, more and more Malaysian retailers have undergone similar discussions in an effort to get shophouse owners and landlords to give tenants a six-month rental rebate of up to 30-50%.
All of this came after countries like Hong Kong and Singapore announced that they were doing so to help retailers ride out the effects of the outbreak.
Both mBL and Strangers at 47 told us that they’re also in the midst of that conversation with their landlords.
The hit has been hard for restaurants like MadHatter though, who has seen a lot of their catering gigs reduced due to the postponement of a lot of major events.
“We have reduced hours now. But there will be no pay cuts at the moment. It is implemented until however we see fit based on the current situation,” Marcus said.
The Contingency Plan For 2 Weeks (Or More)
As there’s no way of knowing whether or not the situation will be extended beyond these 2 weeks, Vincent isn’t taking any chances.
“Having a strong presence online is key. MyeongDong Topokki’s current plan is to launch cloud kitchens nationwide aggressively to reach out to the market to the maximum,” he continued.
At this period persistency is key as many will choose to give up.Vincent Lua, CEO of MyeongDong Topokki
Their venture into cloud kitchens is just one of the many ways they plan to keep operations alive and bustling.
Vincent is also ramping up delivery efforts through third-party services and partners, but also considering other options when the time is right.
“We are ready for alternative delivery which is hiring our own delivery team to cater to the needs of the public,” he said.
RenYi of mBL told us that they’re focusing on ‘a thousand and one contingency plans’ at once—so they’re not caught off guard by anything.
“From considering how we keep on going providing service, managing inventory in the event of a total lockdown, how to pay the bills and salaries, getting bank loans to weather the storm and to continue marketing without sounding desperate—it’s been a battle every day for the past 3 weeks,” he said.
They’ve also planned ahead so much so that they’ve planned on the next step to take in case there’s a confirmed COVID-19 infection within the team.
This is done with temperature checks for their Geeks (members of staff) and even respective delivery riders.
“Sales has been on a decline, but not to a level where we are in the red, so that’s okay,” Ren Yi added.
To be totally transparent, he also explained that if push comes to shove and they needed to close the business, it is a step they are willing to take.
“We are in the midst of securing a bank loan to tie us over this period. We do have other ideas in the pipeline but it all depends on the situational condition.”
EPIC Food Hall has also implemented such temperature checks, as well as other SOPs (sanitisation of all human touchpoints, contactless pick-up, delivery, etc.).
Strangers at 47 told us that they’re also in the midst of ideating for other ways of promotion during these times.
“We also may develop new food items specifically for take away. This depends on the development of the COVID-19 spread,” he said, adding that the business was still exploring more permanent strategies as we speak.
According to Marcus, even with all the precautions taken, there is the uncertainty of whether or not these steps are enough.
“At the moment we are just making small adjustments. The current situation is so volatile that we have to stay on our toes,” said Marcus, founder of the Damansara Utama cafe.
Bottom Line: It’s not an ideal situation, but with the fact that food deliveries are so widespread and widely used—I don’t think the situation has reached a scary boiling point as of yet. Only time will tell whether or not this momentum is able to last, but I do have faith that if marketed appropriately, these businesses would be able to pull through.
- You can read more about other F&B related pieces we’ve written about here.
Featured Image Credit: EPIC Food Hall