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Chinese restaurants starved for cash as virus hits industry

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Restaurants are taking a huge hit as many people across the country of 1.4 billion have been either under some form of quarantine or are reluctant to venture outside since late last month over fears of contagion. AFP

Chinese restaurants starved for cash as virus hits industry

It is lunch time in Beijing, but the only diner at Cindy’s Cafe is an employee having a staff meal – it has been closed for more than three weeks as China battles a deadly virus epidemic.

Restaurants are taking a huge hit as many people across the country of 1.4 billion have been either under some form of quarantine or are reluctant to venture outside since late last month over fears of contagion.

At Cindy’s Cafe in Beijing’s Roosevelt Plaza, dine-in revenue has fallen to zero, and relying on deliveries hardly makes up the shortfall, said manager Cai Yaoyang.

“On a good day in the past, we could earn over 1,000 yuan [$140] a day from deliveries.

“Now, it’s just around 200 to 300 yuan a day. The impact is especially big,” Cai told AFP.

He estimates losses to the company, which has more than 10 outlets in China, could be “at least a few million [yuan]” given rent and unused stock from the unexpected Lunar New Year closures.

“If there is no business, staff may be asked to take more days off,” said Cai.

Many restaurants have suspended dine-ins to help curb the spread of the virus, but eateries that have resumed operations remain largely empty, with people still encouraged to stay home to avoid infections.

The new coronavirus has killed more than 2,400 in China and infected nearly 77,000.

At an outlet of Bellagio Cafe, another restaurant chain, employee Zhu Xiangying told AFP that it had only made 30,000 yuan in around 10 days, compared with the usual 200,000 yuan.

The China Cuisine Association said in a report this month that the country’s restaurant industry saw 4.67 trillion yuan in catering revenue last year, with earnings over the Lunar New Year break accounting for more than 15 per cent.

With millions of people staying indoors during the festival this year, those holiday earnings have evaporated.

Some, including hotpot chain Haidilao – which has temporarily closed its mainland China outlets – have turned to selling fresh and frozen products directly to communities.

In Yunhaiyao, a chain specialising in Yunnan cuisine, restaurant tables are piled with fresh vegetables instead of cooked dishes – ready to be packed and delivered to housing compounds.

Yunhaiyao, which has more than 100 outlets in China, now bulk-buys groceries for residents near its stores as a new income stream.

It has also rolled out a fresh line of prepared ingredients so customers can quickly whip up Yunnan specialities while cooped up at home.

Zhao Yebule, store manager at Yunhaiyao’s Tongzhou branch in Beijing, said deliveries can rake in up to 6,000 yuan daily.

But the company is still in a pinch.

Li Jianying, a regional manager overseeing 10 outlets, said only around half of his staff were ready to resume work.

Others cannot leave their residential compounds freely or face a 14-day quarantine when they return to Beijing.

“Our sales are just about 10 per cent that of regular times before the epidemic,” with delivery sales falling by half, he added.

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