Getting Through The Pandemic

By keeping food cost and rentals in check, F&B establishments can improve their margins and boost profitability, which is critical in the post-pandemic era

- Mihir Mehta

One of my all-time favorite movies is ‘Sully. If you have seen the movie a 1000 times, like I have, you would have noticed the look of relief that actor Tom Hanks displays on landing the Cactus 1549 on the Hudson River. Though he does not say it out loud, his expression definitely spells, “Phew, we did it”!

2020 has been just the same – with its scares, lockdowns and economic downturn. As we almost complete the anniversary of India’s first lockdown, we have come a long way in surviving this once-in-a-century crisis.

Having said that, the pandemic is not over yet and the talks of a another lockdown in some large states bring back frightful memories from last year. As we navigate through this pandemic, the F&B sector, which was worst-hit in the country and globally, has to display resilience to make it to the finish line.

The economic situation is undoubtedly improving as more people try to get back a semblance of their earlier lives. It is also heartening that the vaccination drive is gaining momentum, leading to increased customer confidence in stepping out.

Nonetheless, F&B companies and operators are facing tremendous pressure following a year of muted activity, fear of a second wave of infections as well as low spending in urban/semi-urban areas etc. Some of the below-stated observations could help them wade through the ongoing pandemic and emerge stronger:

Optimising Food And Real Estate Costs: Two reasonably large, yet non-optimised cost components for any F&B player, are the product/food cost and rentals. These costs, if not checked and worked upon, can drive a major dent into their margins.