We have plans to shift on a revenue-sharing model in future: Anjan Chatterjee, CMD, Speciality Restaurants Limited

Anjan Chatterjee, CMD, Speciality Restaurants Limited talks about the lockdown and its impact on his business, revenue through delivery and consolidation plans of the business among others during a candid chat with Swati Khandelwal, Zee Business. 

Edited Excerpts: 

Q: Your business has suffered a lot due to the lockdown. What is your view on this and how will you mitigate the losses as the lockdown continues?

A: It is not necessary to say that the restaurant industry, hospitality industry and airlines are the most affected segments. Restaurants will open at the last, whenever lockdown comes to an end, because people will practice social distancing and preferably not come to the restaurants, malls and cinemas. It has impacted a lot in March-April and even in May, which may exist till June. However, new businesses or startups will shut down completely even if it reopens in July or August, as expected. But would like to say that we may score some points at a time when safety and health are the biggest points of concern in the mind of customers because of our brands, like Mainland China, Oh! Calcutta, and Sigree, among others. We have been into the business for the last 26 years, and we have maintained the highest standards of hygiene and health. More deliveries are happening these days because people are sitting at the home despite the factor that an incident has occurred with Zomoto in which a COVID positive person was delivering food in a particular area. It has had an impact but we have developed our systems and put our vehicles. We are also putting temperature tags on the delivery packet to reassure that we are taking care of the hygiene and health of our customers as we always do. We are providing a ‘Proof of the Pudding’, which has greatly increased our delivery. So, it will impact heavily and people will not come out and the norms of social distancing will be followed as it is happening in Dubai and London, where we have our restaurants. Restaurants in Dubai are open and they have allowed 30% occupancy, which means if you have 100 seats at a place then you will be allowed to use only 25 seats. So, it will have an impact as fixed costs are in place. So, we are right-sizing and balancing things. We don’t have the support of governments like everywhere in the world, then it will be very difficult for us to maintain and pay salaries to our employees, we have 4,800 people. 

Q: You are seeing a little business through home delivery. So, what part of the business or revenue is expected from home delivery and what is the pace at which the process is increasing?

A: Right now people are in lockdown, so they are taking little more food comparatively. After the Zomato incident, it has gone down, but I will say that it is ignorable to what we do. Eventually, people will like to eat food cooked at the restaurants and will ask for home delivery. Following what is happening I will say that 0.50-0.75% of our turnover is going as delivery, which will turn into a reality in time to come as we are practising cloud kitchens. Our turnover stands around Rs 35-38 crore including seasons and it can’t be mitigated through deliveries, although people say that they are willing to deliver. It may be fruitful for start-ups but it is going to be challenging for people like us. Fortunately, we are a debt-free company with funds around Rs 70 crore and I am thankful to God for the same. I personally and our company strongly believe in keeping ourselves debt-free, we are debt-free. Certain reserves are available at our end and we will try our best to balance things. Besides, a turnaround is expected within a year. I feel that we are a strong brand and the goodwill of 26 years will help us in maintaining a strong bounce back. 

Q: You were saying that government support is needed. So, let us know about the kind of support the government should offer for food & beverage (F&B) industry? 

A: Crore of people are employed in the domain including organized and unorganized sectors. And, I would like to talk about a restaurant that we have in London, where furlough, i.e. leave without pay, has been offered to people and they are being offered with 2,500 pounds till the lockdown continues. Same has happened in Dubai as well. We also have our restaurants in Bangladesh where people who have been offered leave without pay have been told that they will be paid the entire salary of the lockdown but they will have to repay it in the next 2 years in EMIs and they will not have to pay the interest. So, if something like this happens, I know each sector was asking for something, but this is an unorganized sector where you need a person to get a glass of water, which means it is a zero automation industry. Undoubtedly, we can do something technologically like hands-free ordering and delivery but will require people. So, jobs of these many people are in a danger and that’s why I feel the government of India will consider what National Restaurant Association of India (NRAI) is talking with it. They will also learn about the things that are happening across the world and we are very hopeful that the government will support us. 

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Q: Are you engaging with your people at places like rent waiver or reworking because the cost can be brought down on that front as well? Secondly, you have numerous brands and do you think that there is a need to consolidate them and focus on few brands and a different way of operation will be needed when lockdown will be lifted and things will return to its normal?

A: Let’s consider that I am carrying a surgical knife in my hand at this moment, I am talking dramatically, and there is a need to save the body and you have gangrene in your hand then there is a need to cut the hand. So, if you don’t sit ruthlessly and decide to cut your brands rationalize where the rates are high. We are revitalizing our people and entering into cloud kitchen. We are renegotiating and nobody will ask for money during the lockdown as we haven’t done any business in this period. We want to move on a revenue-sharing model soon and have asked for the same at NRAI and said that we will provide X percentage in accordance with the business instead of a fixed rental. So, things are being discussed but I would like to say that this is a time when you have to survive and breathe even if there is a need to cut one or two fingers to do so. We will use the surgical knife to cut it and rationalize the things and our strategy is ready.