Many restaurants in the UAE have been reportedly shutting down as Covid-19 impact takes effect in their businesses. ‘For sale’ signs are placed outside the restaurants and even equipment and furniture are being sold in discounts.
“It’s a situation where for many of they try to open, it would mean cash bleeding and which they will never recover. 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,” an industry source was quoted as saying by Gulf News.
Citing ‘multiple industry sources’, the report added that of 11,000 outlets registered in Dubai, anywhere between 40 to 50 percent are predicted to remain in business over the next few months.
As of this moment, only 3% of F&B outlets in the UAE have reopened since the lockdown with majority of them being at the malls. However, a strict preventive measure is being taken – 30 percent of seating capacity.
Another problem of business owners is the rent being not waived and mandating them to pay the full rent although footfall has gone down more than 95 percent.
Consultancy KPMG recently said that the impact of Covid-19 on F&B segment is more severe with sales down to 30 to 80 percent across concepts.
“Operators expected food delivery to compensate to some extent. However, people cooking at home and concerns around hygiene appear to have dampened its promise,” the report noted.