Coronavirus: more than half of HK’s small and independent restaurants face closure amid social-distancing rules, survey finds

13-Aug-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

More than half of Hong Kong’s small and independent restaurants are facing closure as the third wave of Covid-19 continues to ravage the catering industry, according to a survey released on Wednesday.

The poll, conducted by online food delivery platform Deliveroo on 2,000 small restaurant partners over the past three months, showed more than 50 per cent were facing the prospect of immediate business suspension. Deliveroo has partnered with close to 8,000 restaurants in Hong Kong for food delivery services, representing around half of the city’s 16,000 licensed outlets.

Many eateries predicted that if the pandemic continued to batter the economy, within the next three months they would be forced to permanently close their shops or might even be pushed to bankruptcy, according to the survey.

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The findings came as Hong Kong’s food and drink sector continued to take a severe beating amid the pandemic. Since February, the health crisis has brought the city to a near standstill for long periods of time.

Since last week, we saw close to 1,000 restaurants on our platform alone temporarily shutting their doors

Brian Lo, general manager, Deliveroo Hong Kong

In July, the government imposed unprecedented social-distancing measures to curb the spread of the coronavirus, including extending a ban on nighttime dining at restaurants and outlawing gatherings of more than two people. Restaurant takings in the second quarter of 2020 dropped 26 per cent year-on-year, and receipts shrank from HK$28.6 billion (US$3.7 billion) to HK$21.2 billion between April and June compared with the same period last year.

Brian Lo, general manager of Deliveroo Hong Kong and board director of the Hong Kong Federation of Restaurants and Related Trades, said he had written to Chief Executive Carrie Lam Cheng Yuet-ngor calling for the government’s urgent help for the sector which had seen its revenue plunging by more than half over the past few months.

The proposed measures included providing incremental HK$200,000, HK$80,000 or HK$5,000 payments per licensed outlet for every three months of continued enforcement of social-distancing measures; waiving rental fees for four months; and extending the current wage subsidy scheme for another six months.

The government has already rolled out HK$290 billion in relief measures as part of an anti-epidemic fund. It has also adopted measures in the budget to help the city weather the crisis, including offering wage subsidies of up to HK$9,000 per month to each worker to save their jobs, and one-off cash handouts for restaurants.

But Lo warned that without further aid from the authorities to rescue the sector, more than 5,000 restaurants might be forced to shut down for good, putting at risk over 80,000 jobs in the industry.

“Restaurants have seen significant revenue losses during the lockdown even if they are able to remain open for delivery business… the precipitous drop in dine-in sales means restaurants are finding it close to impossible to operate and cover their day-to-day costs,” he said.

“Since last week, we saw close to 1,000 restaurants on our platform alone temporarily shutting their doors. Many of these are small and medium sized businesses with no foreseeable date to reopen.”

Lo said the current relief measures were not enough to rescue the devastated sector. The firm has already forked out more than HK$30 million in support of the industry, by means of offering commission reduction, allowing payment delay, funding promotions and giving away Covid-19 testing kits.

“Restaurants continue to see significant revenue losses amid the current dine-in ban and 50 per cent reduced capacity. While these measures are critical for public safety, urgent action is needed to protect the sector,” he said.

Mark Lam, Owner of Mini Bangkok, a Thai restaurant in Kowloon City, agreed, saying: “It’s tough not knowing from day to day whether we will be able to maintain our operations.”

“We hope further action will be taken to help us and others in the industry to weather the ongoing storm,” he said.

Tracy Wong, Owner of Chilli Fagara, a Sichuan restaurant in Lan Kwai Fong, urged the government to further bolster support for the industry to ride out the adversity.

“Our business has suffered heavy losses as a result of the fall in foot traffic, especially as a restaurant located in Lan Kwai Fong when selling alcohol and dine-in are prohibited,” she said.

Wong said even if restaurants suspended business temporarily to cut costs, they still needed to pay rent.

“It has become a desperate situation for our restaurant and from what I understand, for many others.”


Category: Hong Kong

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