No cheers for restaurant owners, staff this Eid

Restaurants usually face a dearth of customers during Ramadan but coupled with the fallout from the Bailey Road fire, such establishments have been dealt a double whammy from which they are struggling to recover.

At least 46 people were killed in a fire that enveloped the Green Cozy Cottage Shopping Mall in Bailey Road on February 29 this year, with reports stating that the seven-storey building, which housed eight eating joints, had no fire safety measures.

As a result, people began avoiding dining out, and sales of restaurants had already slumped.

This has been further exacerbated by the fact that mostly Iftar items are sold during Ramadan as people are fasting during breakfast and lunch and prefer to have relaxed dinners at home. So, the income is much lower compared to regular days during the holy month.

As a consequence of the slump in sales, some eateries have been forced to sack their employees before Eid-ul-Fitr, one of the biggest religious festivals in Bangladesh, while others have taken bank loans to pay staff salaries and fund renovations, including safety measures and decor.

As sales are lower during Ramadan, some employees have also been sent on temporary leave for the month. However, the number of workers sent on temporary leave this year is much higher than that in previous years.

Bipu Chowdhury, chief executive officer of Nawabi Voj, which operates four outlets in the capital, said that sales during the current Ramadan had halved compared to last Ramadan.

"We are going through a very difficult time. It can't be explained," he said. "Now we make sales of Tk 100,000 to Tk 150,000 per day, but it was Tk 200,000 to Tk 250,000 last year."

Chowdhury said the lingering impacts of the Bailey Road fire and subsequent drives by law enforcement agencies continued to weigh on the business and struggled to see a way out of this pattern of negative growth.

However, he hoped the situation would improve after Eid.

After the Baily Road incident, it was found that among the 25,000 Dhaka restaurants, only 134 had secured the government licence to run a restaurant business.

When that information was made public, there was a huge outcry and many people began avoiding restaurants, said industry people.

Many small and large restaurants have sprouted up in Dhaka over the past decade to cater to the growing demand for hygienic food while also serving the middle and higher-income segments with options for dining out.

However, restaurants have been struggling to ward off the impacts of persistent inflation, which has hovered over 9 percent since March last year.

Amid record inflationary pressures, the profit margin in the restaurant business has also narrowed considerably. At the same time, the rise in prices of essential commodities had led to increased prices for items, which was another reason behind the decline in sales.

"The profit margin decreased last year due to various reasons. Meanwhile, sales have decreased by 20 percent this Ramadan compared to last Ramadan. All in all, I'm very uncomfortable," said Mizan of Bangla Restaurant in the capital's Motijheel.

Currently, there are 4.81 lakh restaurants in Bangladesh, employing 30 lakh people. Overall, two crore people are dependent on the sector, directly and indirectly, according to the Bangladesh Restaurant Owners' Association (BROA).

Firoz Alam Sumon, chief executive officer of Al Kaderia Restaurant at Rampura Bazar in Dhaka, said people were still anxious following the Bailey Road incident.

Consequently, 30 percent fewer customers are dining out this Ramadan compared to last Ramadan, he said.

He added that 20 percent of their staff was laid off on the first day of Ramadan.

"It is not possible to run the business normally only by selling Iftar. So, this decision was taken out of compulsion," he added.

Nurul Afsar, a managing partner of Broccoli Restaurant at Sonargaon Janapath Road in the capital's Uttara, said sales decreased by 30 percent this Ramadan compared to last Ramadan.

"Eid is ahead, so even if sales are low, the staff will have to be paid salaries and bonuses. If a staff member leaves the job, it is very difficult to find a capable new hand. That also has to be kept in mind," he added.

In this situation, the restaurant has taken a bank loan of Tk 50 lakh recently to pay salaries and begin renovation works.

"After the Bailey Road incident, customers have become much more aware about fire safety measures. That's why we need investment now," he added.

Imran Hassan, secretary general of the BROA, said restaurant owners had sent workers on temporary leave at a higher rate at the beginning of Ramadan given the current situation.

"Some members are taking loans to overcome this situation and meet their expenses," he added.

Some owners have laid off nearly 20 percent of their workforce, he said, adding that they were desperately looking for a way out of the mire.