RESTAURANTS have decided to shut down for the duration of the third movement-control order to mitigate losses stemming the lack of customers dining in, said industry players.

A nationwide MCO 3.0 came into effect on May 12 and is expected to end on June 7. Under this third lockdown, dining in restaurants is prohibited and outlets are only allowed to provide food for consumption off the premises.

Industry experts told The Malaysian Insight that 5-10% of restaurants across the country have been temporarily closed, most of which are in Kuala Lumpur and Johor.

Pan Malaysia Koo Soo Restaurants and Chefs Association president Wong Teu Hoon said that since the rents in Kuala Lumpur and Johor are 40% higher than other places, many businesses find it difficult to continue operating and bear the additional expenses.

“For the same amount of space, rent in Kuala Lumpur and Johor is 40% higher compared to Malacca and Ipoh,” Wong said.

He said, since the first lockdown in March last year, the industry is well aware that takeaway services only account for 10% of business and this was not enough to cover employees’ salaries or meals.

“Restaurants have to bear a lot of expenses. Instead of continuing to reluctantly operate, it is better to suspend operations to reduce expenses and losses.”

Lum Tuck Loy, the president of the Selangor and Federal Territory Ku Su Shin Choong Hung Restaurant Association, agreed that takeaways do not contribute much to business and, depending on the area, not all restaurants have that option.

“If the restaurants are far from the city centre, it is difficult to provide takeaway services,” he said.

Lum said most restaurants have decided to close shop until the end of the MCO 3.0 and wait for the announcement from the government before deciding on their next step.

Hee Lai Ton Restaurant in Shaw Parade in Kuala Lumpur is one of the restaurants that has closed.

The restaurant, which also has branches in Selangor, initially suspended business for two weeks after the MCO came into force.

Managing director Too Han Kwong said that a nationwide lockdown for a month was unexpected.

“Since our restaurant is on the third floor of the building, it is difficult to attract customers to come in for takeaway, so we decided to suspend business.

“With the extension of the MCO till next month, we may have to discuss with our employees to reopen so they can get paid. Their salaries depend on our profits.

“If we continue to remain closed, our employees will only receive a small basic salary, and it will be difficult for them to make ends meet. So, if they start working, they will have a little more income,” Too said.

Too estimated that the restaurant had lost hundreds of thousands of ringgit in profits due to the MCO.

“We were booked for Mother’s Day, for group dinners and birthday parties. There were also bookings for Father’s Day next month, but we had to stop taking bookings.”

S Cuisine, a restaurant in Bentong, Pahang, which was operating normally during the second MCO in January this year, could not make enough profit to pay its employees.

Manager Lee Zi Yi said that the restaurant tried the takeaway model during the first and second lockdown but decided against it this time round.

“The response is not good, the profits are not high, and we couldn’t even pay our employees. This time around we decided to temporarily close the business to avoid incurring greater expenses.”

He said that Chinese restaurants such as S Cuisine cater to family dinners and wedding banquets, making takeaway difficult.

“Since MCO 3.0, the number of customers from out of state has halved. Coupled with the dining restrictions, it has become harder for restaurants to operate and fewer people are also willing to come out.”

Wong Teu Hoon, a restaurant owner in Malacca, said the travel restrictions and the no-dining rule had dealt a heavy blow to the restaurant industry.

Wong, who owns a restaurant with five banquet halls said after the third MCO, more operators may not be able to support their business.

He said restaurants which had received bookings for Father’s Day prior to the MCO announcement saw their business gradually recover to about 65% but now they are back to square one.

“Another wave of restrictions has brought us back to right where we started. Now we have to see whether the MCO will be extended before we know if the industry can recover in July and August.”

On May 11, Prime Minister Muhyiddin Yassin announced a new nationwide lockdown following the increase in the number of Covid-19 infections nationwide.

During the MCO 3.0, all social activities and dining in restaurants have been prohibited.

Yesterday, Malaysia recorded 6,806 new Covid-19 cases, the highest daily count since the start of the pandemic.

Selangor continued to record the highest number of daily cases – at 2,277 – followed by Sarawak with 608 cases and Kelantan with 426 cases.

The previous all-time high was on Wednesday when 6,075 cases were recorded. – May 21, 2021.