Restaurants surviving on crumbs, many face closure

Eateries have been trying hard to stay afloat even with the easing of restrictions throughout the Conditional Movement Control Order (CMCO) period.

Some have been forced to reduce their overheads by retaining only local workers while salaries have been delayed for other workers.

Some outlets have been forced to cease operations as they cannot sustain their businesses due to low profit margins since the Movement Control Order was imposed on March 18.

Malaysian F&B Operators Alliance (MyF&B) spokesman Joshua Liew said while many operators have re-started dine-in services since May 4, many still have “one hand tied”.

“When you go into malls, you see some bustling with people but food operators only make much less than what they used to.”

“A restaurant which could previously seat 100 people now only caters for 40 to 50 people and many people won’t queue up just to get in,” said Liew.

He said MyF&B has received feedback from over 1,000 members that more are planning to close for good.

Liew, the co-founder of espressolab, said the government’s RM1,200 wage subsidy scheme has helped him but only enough to retain his Malaysian employees.

“I have been forced to let go of my staff who are foreigners. I have 15 outlets and we are looking at closing down some,” he said.

He added while the government has said it plans to launch a short-term economic recovery plan tomorrow, it remains to be seen how those in the food and beverage sector stand to benefit.

He said rentals even at shopping malls have not been reduced despite reduced revenue, while those who are financially stronger are also finding it tough to hold on.

“If this continues, the loss of jobs is imminent. Even big players in fast food sector are feeling the pinch. They have deep pockets but have suffered great loss of business in a short time. With higher overheads, they are suffering.

“Many have decided against taking loans as they feel it is not worth going on for now and those with many outlets are opting to shut down some,” Liew said.

Malaysian Muslim Restaurant Owners Association (Presma) vice-president Datuk Mohsin Abdul Razak said many eateries under his association have called it a day.

“We don’t have the exact numbers but during the MCO, business dropped by 90 per cent. And even with the CMCO, our income is only between 50 and 60 per cent of what it used to be.

More restaurants have shut down in recent weeks.

“Despite this, our members are retaining their workers and also providing them food and lodging,” said Mohsin, adding that most workers at Indian Muslim restaurants are foreign nationals.

“The staff and employers have a mutual understanding on how salaries are paid and there have been no problems so far,” he said.

Mohsin also said rental is a major problem for Presma’s over 4,000 members.

“Many operate out of corner shop lots. Although landlords can claim tax relief if they slash rentals by up to 30 per cent, not many restaurant operators have enjoyed such rebates.

On April 6, the government announced the economic stimulus package under which landlords who reduce rental by at least 30 per cent from April to June will be eligible for additional tax deductions.

“We are with the government in battling Covid-19 but we are also wondering how we will survive the next six months,” Mohsin said.

He said the association hopes there will be no extension of the CMCO after June 9.

“We can only decide what to do next once the government makes it clear what the norm will be after June 9,” he said.

“Our members are confused with the present SOPs. We have the National Security Council issuing one instruction, then you have the local authorities saying something else.

“There are different rules in different states and we find it tough to advise our members,” he said.

“For example, when the CMCO started, we were told we could place tables on walkways as long as distancing rules were observed, but then local council officers said we couldn’t.”

He added SOPs must be uniform and clear as those running restaurants found it tough complying with the differing rules.