https://arab.news/5f5xa
- Coronavirus lockdown dimmed prospects for food and beverage outlets
DUBAI: With residents’ appetite for eating out in the UAE greatly affected by lockdowns due to the coronavirus pandemic, some restaurants are keeping their windows shuttered – some even permanently – with cashflow to keep them in operation running low.
As much as 50 percent of Dubai’s 11,000 firms registered as food and beverage outlets are unlikely to remain in business during the short term, daily Gulf News reported, while those who have reopened have to deal with strict limitations on seating customers, and barely enough to make rings till and cover overhead costs.
“It’s a situation where for many if they try to open, it would mean more cash bleeding and which they will never recover,” the daily quoted an industry source. “Only government-owned locations have been given rent deferrals or rent-free for up to three months. But the vast majority of landlords have not offered any such break. It will accelerate the destruction of the F&B industry.”
“Rent levels are the single biggest destroyer of F&B prospects now,” said Shanavas Mohammed, Managing Partner at Golden Fork Group. “The way we see it, 60 per cent of restaurants may not able to reopen due to rental issues, where landlords have not offered any rental waivers.
“And the cash the restaurateur was holding would have been spent to sustain staff salaries for three months. Plus, telecom operators have disconnected internet and landline numbers at many outlets. Many restaurants are struggling to buy foodstuff to restart their business – the saddest part of all this is suppliers are only delivering on upfront payment.
“They have stopped all credit facilities for restaurants.”