DESPITE increased orders for takeaways and deliveries, eateries are still struggling with revenues as their profit margins have fallen during the movement-control order period.

Eatery owners told The Malaysian Insight that while some are doing brisk business during the MCO, there are also others who face the risk of shutting down permanently.

Malaysian F&B Operators’ Alliance (MyF&B) said business has fallen up to 80% during the MCO period, and up to 30% of such businesses may close for good due to the extended MCO.

“Operators are worried that consumers won’t go back to restaurants even after the MCO is lifted as that does not necessarily mean the outbreak is over.

“We expect the next six months to be tough for the industry,” said MyF&B spokesman Joshua Liew.

MyF&B includes some 900 operators representing 600 brands.

According to member restaurants, 30% of food and beverage businesses may close as they still have to pay rent and salaries with barely any income.

The government first announced the MCO on March 16, which was supposed to run from March 18 to March 31, to curb the spread of Covid-19. The MCO has since been extended twice, first to April 14 and now to April 28.

Yesterday, Malaysia saw 153 new coronavirus cases, bringing the total to 4,683, said director-general of health Dr Noor Hisham Abdullah.

There were 113 recoveries bringing the total patients discharged to 2,108, or 45% of the infected.

Three patients died, taking the death toll to 76 and a fatality rate to 1.62%.

Liew, who is also Espresso Lab CEO, said his cafe chain is not open for business during the MCO as coffee is not considered an essential beverage.

“In phase two of the MCO, restaurants’ operating hours are restricted to 8am and 8pm, but they have to close around 6pm to start the clean-up process,” Liew said.

MyF&B members are now studying how restaurants in Wuhan are restarting their businesses after their lockdown, he said.

Thriving during MCO

MyBurgerLab co-founder and managing director Chin Renyi said they are now operating exclusively on deliveries, and their profit margin has fallen as a result of delivery companies taking a cut.

Before the MCO, the burger chain’s business consisted of 70% dine-in and 30% deliveries.

“Now, no dine-in is allowed and we can only take delivery orders. We make less money through deliveries, so now our profit margins are lower as a result,” Chin told The Malaysian Insight.

He said myBurgerLab is still doing brisk business as the chain is popular, with its six branches making an estimated RM40,000 to RM50,000 a day compared with RM30,000 daily before the MCO.

Even though there is an increase in business, Chin said there’s no reduction in rent, while food deliverers, such as Grabfood, are not lowering their commission, and the restaurant chain is still paying the salaries of 70 workers.

“We have to sell more to make the same returns. Another option we considered was to temporarily stop the business, tell workers there’s no need to show up and just keep paying rent.

“This will actually lessen our burdens but if we keep it open, then consumers have additional choices for food.”

Another factor adding to restaurants’ burdens is the limited operating hours.

Phase one of the MCO allowed businesses to operate until 10pm, but this was cut to 8pm on April 1.

They have to stop accepting orders about 6.45pm to complete clean up works before 8pm, said Chin.

“On April 1, we took our last order at 7.30pm, and after cleaning up, we only closed at 9pm and we were warned by the police. So, we are now considering between making the cut-off time earlier or close temporarily.

“People typically have their dinners after 6.30pm but we have to stop taking orders and start cleaning up around the same time.

“And since the start of phase two MCO on April 1, our business has fallen again, so we are back to making RM30,000 daily.”

Government aid

The cost of operating restaurants is typically 20% for rent, salaries (20%-25%), ingredients (40%) and miscellaneous (10%), he said.

“We generally only make about 10% profit, we have requested Grab to lower its 30% commission for deliveries by 5% but we have not gotten a response. We understand that Grab has its own commitments to bear but that’s a shame.”

MyF&B recently met with Finance Minister Tengku Zafrul Tengku Abdul Aziz to request for assistance, such as offering a 50% wage subsidy for workers and reducing rent for operators during the MCO period.

They have also asked for a 50% rent discount for the six months after the MCO is lifted.

Liew said the finance minister told them during the meeting that he understands their plight and will bring up their predicament to the cabinet. – April 14, 2020.